<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY , 1999
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-4
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
FLORIDA PANTHERS HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 7990 65-0676005
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification Number)
</TABLE>
(FOR CO-REGISTRANTS, PLEASE SEE "TABLE OF CO-REGISTRANTS"
ON THE FOLLOWING PAGE)
450 EAST LAS OLAS BOULEVARD
FORT LAUDERDALE, FL 33301
(954) 712-1300
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
RICHARD L. HANDLEY, ESQ.
SENIOR VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
FLORIDA PANTHERS HOLDINGS, INC.
450 EAST LAS OLAS BOULEVARD
FORT LAUDERDALE, FL 33301
(954) 712-1300
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
COPIES TO:
STEPHEN K. RODDENBERRY, ESQ.
AKERMAN, SENTERFITT & EIDSON, P.A.
ONE S.E. THIRD AVENUE, 28TH FLOOR
MIAMI, FL 33131-1704
(305) 374-5600
---------------------
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 being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
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 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 number of the earlier effective registration statement for the same
offering. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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PROPOSED
AMOUNT MAXIMUM PROPOSED AMOUNT OF
TITLE OF EACH CLASS TO BE OFFERING PRICE MAXIMUM REGISTRATION
OF SECURITIES TO BE REGISTERED REGISTERED PER NOTE(1) OFFERING PRICE FEE
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<S> <C> <C> <C> <C>
9 7/8% Senior Subordinated
Notes due 2009.............. $340,000,000 100% $340,000,000 $94,520
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Guarantees(2)................. (3) (3) (3) (3)
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</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(f) under the Securities Act of 1933, as amended.
(2) The Company's domestic subsidiaries, listed in the table on the following
page (the "Guarantors"), have guaranteed on a senior subordinated unsecured
basis, jointly and severally, the payment of the principal of, premium, if
any, and interest on the 9 7/8% Senior Subordinated Notes due 2009 being
registered hereby (the "Guarantees"). The Guarantors are registering the
Guarantees. Pursuant to Rule 457(n) under the Securities Act of 1933, as
amended, no registration fee is required with respect to the Guarantees.
(3) Not applicable.
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<PAGE> 2
TABLE OF CO-REGISTRANTS
<TABLE>
<CAPTION>
PRIMARY STANDARD
STATE OF INDUSTRIAL I.R.S. EMPLOYER
INCORPORATION/ CLASSIFICATION IDENTIFICATION
NAME OF ADDITIONAL REGISTRANT FORMATION CODE CODE
----------------------------- -------------- ---------------- ---------------
<S> <C> <C> <C>
2301 Mgt., Ltd.............................. Florida 7990 65-0430545
2301 SE 17th St, Inc........................ Florida 7990 65-0396845
2301 SE 17th St., Ltd....................... Florida 7990 65-0407836
Arena Development Company, Inc.............. Florida 7990 65-0679602
Arena Development Company, Ltd.............. Florida 7990 65-0683997
Arena Operating Company, Inc................ Florida 7990 65-0679603
Arena Operating Company, Ltd................ Florida 7990 65-0683996
Biltmore Hotel Partners, L.L.L.P............ Arizona 7990 86-0704894
Boca By Design, Inc......................... Florida 7990 --
Boca Raton Caterers, Inc.................... Florida 7990 --
Boca Raton Resort and Club, Inc............. Florida 7990 --
Coyote Holdings, Inc........................ Delaware 7990 65-0812749
Decoma Investment, Inc. I................... Texas 7990 76-0154871
Decoma Investment, Inc. II.................. Texas 7990 76-0156358
Desert Jewel Destinations LLC............... Arizona 7990 --
Florida Golf Management, Inc................ Florida 7990 65-0793088
Florida Hospitality Services, Inc........... Florida 7990 65-0301371
Florida Panthers Hockey Club, Inc........... Florida 7990 65-0379490
Florida Panthers Hockey Club, Ltd........... Florida 7990 65-0401302
Florida Panthers Hotel Corporation.......... Delaware 7990 65-0909990
Florida Panthers Ice Ventures, Inc.......... Florida 7990 65-0722833
Florida Panthers Naples, Inc................ Florida 7990 65-0792647
FPH Management, Inc......................... Florida 7990 65-0792649
FPH/RHI Merger Corp......................... Florida 7990 65-0911243
LeHill Partners L.P......................... Delaware 7990 36-4005255
Mizner Center, Inc.......................... Florida 7990 --
Panthers AHL Hockey Corp.................... Florida 7990 65-0815101
Panthers Boca General Partner, Inc.......... Florida 7990 65-0762243
Panthers Boca Limited Partner, Inc.......... Florida 7990 65-0762244
Panthers BRGP Corporation................... Florida 7990 65-0762241
Panthers BRHC Limited....................... Florida 7990 65-0762249
Panthers BRHC Management Corporation........ Florida 7990 65-0762234
Panthers BRLP Corporation................... Florida 7990 65-0762238
Panthers Edgewater Resort, Inc.............. Delaware 7990 65-0811827
Panthers Grey Oaks, Inc..................... Florida 7990 65-0851608
Panthers Planation Golf, Inc................ Florida 7990 65-0863399
Panthers RPN Limited........................ Florida 7990 65-0826143
Pelican Hill Associates, L.P................ Delaware 7990 36-4005258
PER, L.L.C.................................. Delaware 7990 --
Rahn Bahia, Inc............................. Florida 7990 65-0498957
Rahn Bahia Mar, G.P......................... Florida 7990 65-0498953
Rahn Bahia Mar, Inc......................... Florida 7990 65-0498959
Rahn Bahia Mar, Ltd......................... Florida 7990 65-0485440
Rahn Bahia Mar Mgmt., Inc................... Florida 7990 65-0500488
Rahn Pier, Inc.............................. Florida 7990 65-0418131
Rahn Pier Mgt., Inc......................... Florida 7990 65-0093227
ResortHill, Inc............................. Illinois 7990 36-4005260
Wright-Bilt Corp............................ Delaware 7990 65-0811829
</TABLE>
<PAGE> 3
OFFER TO EXCHANGE
9 7/8% SENIOR SUBORDINATED NOTES DUE 2009, WHICH HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT, FOR ANY AND ALL
OUTSTANDING 9 7/8% SENIOR SUBORDINATED NOTES DUE 2009
WHICH HAVE NOT BEEN SO REGISTERED
OF
FLORIDA PANTHERS HOLDINGS, INC.
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON JUNE , 1999, UNLESS EXTENDED
---------------------
Florida Panthers Holdings, Inc., a Delaware corporation (the "Company"),
hereby offers, upon the terms and subject to the conditions set forth in this
Prospectus and the accompanying Letter of Transmittal (which together constitute
the "Exchange Offer"), to exchange up to $340,000,000 aggregate principal amount
of 9 7/8% Senior Subordinated Notes due 2009 (the "New Notes"), which have been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
for a like principal amount at maturity of the issued and outstanding 9 7/8%
Senior Subordinated Notes due 2009 (the "Old Notes," and, together with the New
Notes, the "Notes") from the holders (the "Holders") thereof. The terms of the
New Notes are substantially identical in all material respects to the Old Notes,
except for certain transfer restrictions and registration rights relating to the
Old Notes. We issued $340,000,000 aggregate principal amount of Old Notes on
April 15, 1999, pursuant to exemptions from, or transactions not subject to, the
registration requirements of the Securities Act and applicable state securities
laws (the "Private Debt Offering"). The New Notes will be issued pursuant to an
indenture dated as of April 21, 1999 between the Company and The Bank of New
York (the "Trustee"). Set forth below is a summary of the terms of the Notes
offered by this Prospectus. For more detail see "Description of Notes."
o INTEREST
The Notes have a fixed annual rate of 9 7/8% which will be paid every six
months on April 15 and October 15, commencing October 15, 1999.
o MATURITY
The Notes will mature on April 15, 2009.
o GUARANTEES
If we cannot make payments on the Notes when they are due, our existing
subsidiaries have guaranteed the Notes and must make payments instead. Certain
of our future subsidiaries will also guarantee the Notes.
The Notes are unsecured obligations of our Company and the Guarantees are
unsecured obligations of the guarantor subsidiaries.
o MANDATORY OFFER TO REPURCHASE
If we sell certain assets or experience specific kinds of changes in control,
we must offer to repurchase the Notes.
o RANKING
The Notes and the Guarantees are subordinated to our current and future senior
debt.
If we or any guarantor subsidiary goes into bankruptcy, payments on the Notes
will only be made after our senior debt or the senior debt of such guarantor
subsidiary has been paid in full.
o REDEMPTION
At any time on or after April 15, 2004, we may, at our option, redeem the
Notes at the prices set forth in this Prospectus.
At any time on or prior to April 15, 2002, we may redeem up to 35% of the
principal amount of the Notes with the proceeds of certain equity offerings by
us.
THIS INVESTMENT INVOLVES RISKS. SEE THE RISK FACTORS SECTION BEGINNING ON PAGE
17.
NEITHER THE U.S. SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER FEDERAL OR
STATE AGENCY HAS PASSED ON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS OR THE
INVESTMENT MERITS OF THE NEW NOTES OFFERED HEREBY. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is May , 1999
<PAGE> 4
The New Notes are general unsecured obligations of the Company and are
subordinated in right of payment to all existing and future senior debt of the
Company. The New Notes rank equal to any future senior subordinated indebtedness
of the Company and rank senior in right of payment to all other subordinated
obligations of the Company. The New Notes are unconditionally guaranteed (the
"Guarantees") on a senior subordinated basis by all of our existing and certain
future subsidiaries (the "Guarantors"). The Guarantees are general unsecured
obligations of the Guarantors and are subordinated in right of payment to all
existing and future senior debt of the Guarantors. The Guarantees rank equal to
any future senior subordinated indebtedness of the Guarantors and rank senior in
right of payment to all other subordinated obligations of the Guarantors. The
Indenture permits us to incur additional indebtedness, including senior debt
under our senior credit facilities. See "Description of the Notes."
For each Old Note accepted for exchange, the Holder thereof will receive a
New Note having a principal amount equal to that of the surrendered Old Note.
The New Notes will bear interest from the date of initial issuance of the New
Notes, plus an amount equal to the accrued interest on the Old Notes from the
most recent date to which interest has been paid to the date of exchange thereof
for New Notes. Old Notes accepted for exchange will cease to accrue interest
upon issuance of the New Notes. Holders of Old Notes accepted for exchange will
not receive any payment in respect of accrued interest on such Old Notes.
The New Notes are being offered hereunder in order to satisfy certain
obligations of ours contained in a Registration Rights Agreement between us and
the initial purchasers of the Old Notes. We are making the Exchange Offer
pursuant to the Registration Statement of which this Prospectus is a part in
reliance upon the position of the staff of the Securities and Exchange
Commission (the "Commission") set forth in certain no-action letters addressed
to other parties in other transactions. However, we have not sought our own
no-action letter and there can be no assurance that the staff of the Commission
would make a similar determination with respect to the Exchange Offer. Based on
the interpretations by the staff of the Commission set forth in these no-action
letters, we believe that the New Notes issued pursuant to the Exchange Offer may
be offered for resale, resold and otherwise transferred by the Holders thereof
without further compliance with the registration and prospectus delivery
requirements of the Securities Act subject to certain conditions. Such
conditions include that the New Notes may not be offered for resale, resold or
otherwise transferred by the Holders thereof to (1) any such Holder that is an
"affiliate" of the Company or the Guarantors within the meaning of Rule 405
under the Securities Act; (2) an initial purchaser or Holder of Old Notes who
acquired the Old Notes directly from the Company solely in order to resell
pursuant to Rule 144A of the Securities Act or any other available exemption
under the Securities Act; or (3) a broker-dealer who acquired the Old Notes as a
result of market making or other trading activities. Furthermore, such New Notes
may only be acquired in the ordinary course of such Holder's business and such
Holder may not be participating in and has no arrangement or understanding with
any person to participate in a distribution (within the meaning of the
Securities Act) of such New Notes. Each broker-dealer that receives New Notes
for its own account pursuant to the Exchange Offer must acknowledge that it will
deliver a prospectus in connection with any resale of such New Notes. The Letter
of Transmittal states that by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act. This Prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of New Notes received in exchange for Old Notes where such Old
Notes were acquired by such broker-dealer as a result of market-making
activities or other trading activities. See "Plan of Distribution."
We will not receive any proceeds from the Exchange Offer. We will pay
numerous expenses in connection with the Exchange Offer. Tenders of Old Notes
pursuant to the Exchange Offer may be withdrawn at any time prior to 5:00 p.m.,
New York City time, on June , 1999, (the "Expiration Date"), unless extended
in our sole discretion. The Registration Statement of which this Prospectus
constitutes a part will remain in effect until the consummation of the Exchange
Offer, which will occur promptly after the Expiration Date. If we terminate the
Exchange Offer and do not accept for exchange any Old Notes, we will promptly
return the Old Notes to the Holders thereof. See "The Exchange Offer."
There is no existing trading market for the New Notes and we cannot assure
you that a market for the New Notes will develop in the future. Bear, Stearns &
Co. Inc., BT Alex. Brown Incorporated, Allen &
(ii)
<PAGE> 5
Company Incorporated, Jefferies & Company, Inc. and Raymond James & Associates,
Inc. (collectively, the "Initial Purchasers") have advised us that they
currently intend to make a market in the New Notes. The Initial Purchasers are
not obligated to do so, however, and any market-making with respect to the New
Notes may be discontinued at any time without notice. To the extent that a
market for the New Notes does develop, the market value of the New Notes will
depend on market conditions (such as yields on alternative investments), general
economic conditions, our financial condition and other conditions. Such
conditions might cause the New Notes, to the extent that they are actively
traded, to trade at a significant discount from face value. See "Risk
Factors -- "There is no public market for the New Notes and the New Notes are
not freely transferable." We do not intend to apply for listing or quotation of
the New Notes on any securities exchange or stock market or register or qualify
the New Notes for offer and sale in any jurisdiction (other than the
registration of the New Notes under the Securities Act).
THE EXCHANGE OFFER IS NOT BEING MADE TO, NOR WILL THE COMPANY ACCEPT
TENDERS FOR EXCHANGE FROM, HOLDERS OF THE OLD NOTES IN ANY JURISDICTION IN WHICH
THE EXCHANGE OFFER OR THE ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE WITH THE
SECURITIES OR BLUE SKY LAWS OF SUCH JURISDICTION.
WHERE YOU CAN FIND MORE INFORMATION
This Prospectus constitutes a part of a Registration Statement on Form S-4
that we filed with the Commission under the Securities Act. This Prospectus does
not contain all of the information set forth in the Registration Statement and
the exhibits thereto, certain parts of which are omitted in accordance with the
rules and regulations of the Commission. For further information with respect to
our company and the New Notes offered by this Prospectus, please refer to the
Registration Statement. Any statements made in this Prospectus concerning the
provisions of certain documents are not necessarily complete and, in each
instance, we urge you to refer to the copy of such document filed as an exhibit
to the Registration Statement otherwise filed with the Commission. All of our
statements concerning such documents are qualified in their entirety by such
reference.
We file annual, quarterly and current reports, proxy statements and other
information with the Commission. You may read and copy any document we file at
the Commission's public reference rooms in Washington, D.C., New York, New York
and Chicago, Illinois. Please call the Commission at 1-800-SEC-0330 for further
information on the public reference rooms. Our Commission filings are also
available to the public from the Commission's web site at http;//www.sec.gov.
The Commission allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to our filed Commission documents. The information incorporated by
reference is part of this Prospectus. Information we file with the Commission
after we file this document will update and supersede this information. We
incorporate by reference the documents listed below and any future filings made
with the Commission under Section 13(a), 13(c), 14, or 15(d) of the Securities
Exchange Act of 1934 until the Exchange Offer is completed.
(a) Our Annual Report on Form 10-K for the year ended June 30, 1998;
(b) Our Quarterly Report on Form 10-Q for the quarter ended September 30,
1998;
(c) Our Quarterly Report on Form 10-Q for the quarter ended December 31,
1998;
(d) Our Current Report on Form 8-K filed February 16, 1999;
(e) Our Current Report on Form 8-K filed April 7, 1999; and
(f) Our Current Report on Form 8-K filed April 26, 1999.
(iii)
<PAGE> 6
You may request a copy of these filings, at no cost, by writing or
telephoning Richard L. Handley, Senior Vice President, Secretary and General
Counsel at:
Florida Panthers Holdings, Inc.
450 East Las Olas Boulevard
Fort Lauderdale, Florida 33301
(954) 712-1300
We have agreed that, whether or not we are required to do so by the rules
and regulations of the Commission, for so long as any of the Notes remain
outstanding, we will furnish to the Holders and file with the Commission (unless
the Commission will not accept such a filing) (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 as if we 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 our certified independent accountants, and (ii) all reports
that would be required to be filed with the Commission on Form 8-K if we were
required to file such reports in each case within the time periods set forth in
the Commission's rules and regulations.
We have not authorized any dealer, salesperson or other individual to give
any information or to make any representations other than those contained in
this Prospectus. You may not rely on any such information or representations
other than those set forth in this Prospectus.
THIS PROSPECTUS IS NOT AN OFFER TO SELL THE NEW NOTES AND IT IS NOT
SOLICITING AN OFFER TO BUY THE NEW NOTES IN ANY JURISDICTION WHERE THE OFFER OR
SALE IS PROHIBITED. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
UNDER THE TERMS DESCRIBED HEREIN SHALL IMPLY THAT THE INFORMATION HEREIN IS
CORRECT AS OF ANY DATE AFTER THE DATE HEREOF.
CAUTIONARY NOTICE REGARDING FORWARD LOOKING STATEMENTS
Certain statements contained in this Prospectus are forward-looking in
nature. Such statements can be identified by the use of forward-looking
terminology such as "believes," "expects," "may," "will," "should," or
"anticipates" or the negative thereof or comparable terminology, or by
discussions of strategy. Prospective purchasers of New Notes are cautioned that
the Company's business and operations are subject to a variety of risks and
uncertainties and, consequently, the Company's actual results may materially
differ from those projected by the forward-looking statements contained in this
Prospectus. Certain of such risks and uncertainties are discussed under "Risk
Factors," beginning on page 17 of this Prospectus, and prospective purchasers of
New Notes are urged to carefully consider such factors.
(iv)
<PAGE> 7
SUMMARY
The following summary contains basic information about the Exchange Offer.
It does not contain all the information that is important to you in making a
decision to invest in our company. For a more complete understanding of the
Exchange Offer, we encourage you to read this entire document and other
documents to which we refer. Unless the context otherwise requires, all
references to "we," "us" and "our" include Florida Panthers Holdings, Inc. and
its subsidiaries and references to the "Company" mean Florida Panthers Holdings,
Inc. only.
OUR BUSINESS
Florida Panthers Holdings, Inc. is a leading owner and operator of leisure
and entertainment/sports businesses. Our company is comprised of two business
segments: (1) leisure and recreation, which primarily consists of the ownership
of six luxury resorts, including the operation of hotels, conference facilities,
golf courses, spas, marinas and private clubs; and (2) entertainment and sports,
which includes the operations of the Florida Panthers Hockey Club, the National
Car Rental Center, a multi-purpose entertainment complex where the Panthers play
their home games, and related arena management operations. We believe each of
our businesses operates premier assets which, due to their market positions,
attract a large base of loyal customers with high disposable income, thereby
allowing us to maximize revenues and cash flows. For the twelve months ended
December 31, 1998, pro forma for acquisitions made in 1998, we generated revenue
of $362.8 million, of which $311.9 million, or 86% of total revenue, was
generated by our leisure and recreation operations and $50.9 million, or 14% of
total revenue, was generated by our entertainment and sports operations.
Adjusted EBITDA (as defined) for the twelve months ended December 31, 1998,
which includes pro forma adjustments for acquisitions made in 1998, amounted to
$91.3 million.
LEISURE AND RECREATION
Our leisure and recreation operations include the ownership of six
well-known, luxury resorts with a combined 2,863 rooms. Our resorts include:
- the Boca Raton Resort and Club (Boca Raton, Florida);
- the Arizona Biltmore Hotel (Phoenix, Arizona);
- the Registry Hotel at Pelican Bay (Naples, Florida);
- the Edgewater Beach Hotel (Naples, Florida);
- the Hyatt Regency Pier 66 Hotel and Marina (Fort Lauderdale, Florida);
and
- the Radisson Bahia Mar Resort and Yachting Center (Fort Lauderdale,
Florida).
Each of our resorts shares the following competitive and operational
strengths:
- Unique, irreplaceable assets with high recognition and strong
positioning in its target markets;
- Facilities and amenities which provide multiple and diverse revenue
streams and attract upscale business and leisure customers;
- Opportunities to significantly increase revenue and cash flow through
the development of additional guest rooms and/or resort amenities and
facilities; and
- Established, or ability to initiate, club membership programs.
Our resorts have received numerous distinctions commensurate with their
leading positions within their respective markets. For example, the Boca Raton
Resort and Club received the Readers' Award as one of the "Top 25 Hotels in
North America" by Travel & Leisure magazine in 1998 and was named to Conde Nast
Traveler's Gold List in 1998. The Arizona Biltmore was also named to Conde Nast
Traveler's Gold List in 1998 and was featured in Architectural Digest in 1996.
Amenities and services at our resorts include conference facilities, golf
courses, tennis facilities, spas, fitness centers, marinas, restaurants, retail
outlets, swimming pools, and other activities and services. The diversity and
number of amenities and services at our facilities provides us with substantial
non-room revenues. For the twelve months ended December 31, 1998, approximately
57% of revenues from our leisure
1
<PAGE> 8
and recreation operations were generated from non-room sources. In addition, our
luxury amenities and services allow us to maintain premium pricing for our
rooms. For the year ended December 31, 1998, our average daily room rate was
$191.65, compared to the average daily room rate of the luxury resort industry
for this period which, according to Smith Travel Research, was $166.05.
Our resorts' conference facilities and other amenities make them attractive
locations for group functions. Our conference facilities include over 330,000
square feet of combined conference space and we maintain our own in-house
planning and logistics capabilities. In addition, we believe the geographic
diversity of our resorts in eastern and western Florida and Arizona will allow
our sales people to market multiple resort locations to corporate and
association groups that prefer to rotate conference locations from year to year.
We believe that there are growth opportunities at many of our resorts
because a significant portion of the land at these locations is either
undeveloped or is capable of being reconfigured for alternative uses. We expect
that the addition of new rooms and amenities will attract additional customers
as well as enable us to realize incremental revenues from our existing
customers.
We also believe that our focus on upscale business and leisure customers
and corporate group customers allows us to maximize our total revenue per
available room. It has been our experience that these customers are more likely
to use the additional amenities and facilities available at our resorts, thereby
increasing revenue. In addition, we believe that by targeting upscale customers
we are well positioned to take advantage of demographic trends (which include an
aging "baby-boom" population with increasing disposable income) creating
increased demand for luxury resorts and related amenities. We believe our
resorts will be able to capitalize on these trends given their unique nature and
locations. Our ability to capitalize on these trends will be enhanced by the
high barriers to entry associated with new luxury hotel and resort development
that we expect will limit new luxury room supply.
We continue to expand and develop our Premier Club concept which was first
introduced in 1991 at the Boca Raton Resort and Club. Membership in the Boca
Raton Resort Premier Club allows Premier Club members access to the Boca Raton
Resort and Club grounds, restaurants, recreational facilities and other private
social functions, which are otherwise restricted to resort guests. The Boca
Raton Resort Premier Club currently requires an initial membership fee of
$45,000 and annual social dues starting at $2,300. Additional dues are required
for members to have access to the resort's golf and tennis facilities. Annual
cash flow from Premier Club membership fees and dues has grown from $9.8 million
in 1996 to $14.9 million in 1998. In addition, Premier Club members generate
additional revenues through the use of existing resort facilities and services,
which are available on a fee-for-use basis. We expect to expand the Premier Club
concept to our other resorts through the development of additional amenities and
membership programs.
ENTERTAINMENT AND SPORTS
Our entertainment and sports operations primarily consist of:
- Ownership and management of the Florida Panthers Hockey Club, a
National Hockey League franchise; and
- Management of the National Car Rental Center, a multi-purpose
entertainment complex where the Panthers play their home games.
The Panthers began play during the 1993-1994 NHL season. The Panthers have
been a highly successful franchise, reaching the playoffs in two out of the last
three seasons and competing in the 1996 Stanley Cup Championship. The Panthers
have developed a strong fan base in South Florida, selling out all of their home
games for the 1996-1997 and 1997-1998 NHL seasons (14,700 seats per game), with
attendance for the 1998-1999 season to date averaging approximately 18,000 per
game or 92% of capacity. Since moving to the National Car Rental Center, the
Panthers' average gate receipts have ranked in the top six among NHL franchises.
The Panthers generate revenue through the sale of tickets to Panthers' home
games, the licensing of local market television, cable network, and radio
rights, from distributions under revenue-sharing arrangements with
2
<PAGE> 9
the NHL covering national broadcasting contracts, as well as other ancillary
sources including franchise fees. In addition, we generate revenue through our
participation in the net operating income of the National Car Rental Center,
where the Panthers began playing their home games with the opening of the
1998-1999 NHL season.
From the Panthers' inception through the end of the 1997-1998 season, the
Panthers played all of their home games at the 14,700 seat Miami Arena. The size
of the Miami Arena limited the Panthers' ability to generate revenue from
additional ticket sales, concessions and merchandise sales, and unfavorable
lease terms precluded the Panthers from sharing in suite, building advertising
and parking revenue.
In June 1996, we entered into an agreement with Broward County (the owner
of the National Car Rental Center) to develop the National Car Rental Center.
The National Car Rental Center is a state-of-the-art multi-purpose entertainment
complex strategically located in the center of South Florida's tri-county area,
which encompasses a population of approximately 4.5 million. The National Car
Rental Center has a seating capacity of 19,500 for hockey games, over 30% more
than the Miami Arena, including 72 luxury suites and 2,400 premium club seats.
For the 1998-1999 season, the Panthers have sold season tickets for 15,500 of
the arena's 19,500 seats. In addition, all of the luxury suites have been
pre-sold under multi-year contracts.
The National Car Rental Center provides a variety of revenue streams to us,
including suite and premium club seat sales, building advertising, parking,
concessions, and net revenues generated from other entertainment events held at
the arena. Many of these revenue streams are committed to on a multi-year basis.
We have entered into a 30-year operating agreement with Broward County regarding
the National Car Rental Center pursuant to which we are entitled to retain (1)
95% of all revenue derived from the sale of general seating tickets to the
Panthers' home games and 100% of certain other hockey-related advertising and
merchandising revenue and (2) the first $14.0 million of net operating income
generated by the National Car Rental Center, on an annual basis, and 80% of all
net operating income in excess of $14.0 million generated by the National Car
Rental Center, with Broward County receiving the remaining 20%. Due to its
central location, state-of-the-art facilities and large seating capacity, we
have already booked over 140 events for the National Car Rental Center,
including performances by Celine Dion, Elton John, Billy Joel and The Rolling
Stones.
BUSINESS STRATEGY
Our objective is to maximize our cash flow from and the value of our
businesses by:
- CONTINUING INTERNAL GROWTH THROUGH CAPITAL IMPROVEMENTS AT OUR
RESORTS. We believe that our resorts have the opportunity for continued
internal growth. At the time we acquired our resorts, each resort had
on-going or recently completed expansion and/or improvement programs. In
addition, we have continued to make capital improvements at the resorts
after we acquired them. We believe these capital improvements have and
will continue to improve our revenue and cash flow per available room. In
addition to normal recurring maintenance capital expenditures, over the
past four years, $139.2 million has been invested in our resorts to:
-- Construct a new conference center, as well as replace one of the
existing golf courses with a championship course and add a
state-of-the-art tennis and fitness center at the Boca Raton Resort
and Club (completed in 1998);
-- Undertake a property-wide renovation (completed in 1996), add a spa
complex (completed in 1997) and add 122 additional rooms and an
Olympic size swimming pool (expected completion June 1999) at the
Arizona Biltmore Hotel;
-- Renovate all of the guest rooms at the Hyatt Regency Pier 66 Hotel
and Marina (completed in 1998);
-- Complete an extensive renovation project primarily relating to guest
rooms and the relocation of meeting space and restaurants at the
Radisson Bahia Mar Resort and Yachting Center (completed in 1995);
and
3
<PAGE> 10
-- Redesign the Grande Oaks Golf Club (formerly known as Rolling Hills
Golf Club), a private golf club and important component of our Fort
Lauderdale private club program, which will also serve as an
additional amenity for our Hyatt Regency Pier 66 Hotel and Marina and
Radisson Bahia Mar Resort and Yachting Center resorts in Fort
Lauderdale (completed in March 1999).
We believe that these capital expenditures have resulted in increases to
our average daily room rates and have attracted higher spending
corporate and group guests resulting in increased total revenue per
available room. For the year ended December 31, 1998, our average daily
room rate was $191.65, our room revenue per available room was $131.06
and our total revenue per available room was $299.37. For the year ended
December 31, 1997, our average daily room rate was $179.63, our room
revenue per available room was $123.59 and our total revenue per
available room was $270.88. These statistics compare favorably to the
luxury resort industry which, according to Smith Travel Research,
achieved an average daily room rate of $166.05 and room revenue per
available room of $120.69 in 1998.
In addition, most of our resorts possess substantial available land for
additional development. We expect to undertake additional capital
improvements at our resorts which, subject to the availability of
capital on terms suitable to us, may include:
-- Development of a new championship golf course in Naples, Florida;
-- The addition of 114 luxury guest rooms, the renovation of 100 guest
rooms, as well as the addition of a spa complex and 30,000 square
feet of retail space at the Boca Raton Resort and Club;
-- A new pool complex at the Registry Hotel at Pelican Bay; and
-- Development of a new pool, cabana club and a private club restaurant,
as well as a spa expansion at the Hyatt Regency Pier 66 Hotel and
Marina.
- EXPANDING PREMIER CLUB CONCEPT TO OTHER LOCATIONS. We expect to extend
the Premier Club concept to our other resorts, which we believe will
allow us to generate substantial incremental revenues from existing or
planned facilities and services. We anticipate that the Premier Club will
allow us to market resort properties, restaurants, pools, and where
available, tennis, golf, spas and other leisure and recreational
amenities to residents in local communities in a country club/social club
setting.
- SEEKING CROSS-MARKETING OPPORTUNITIES. We believe our current portfolio
of luxury resorts provides us with cross-marketing opportunities. For
example, corporate and other group customers that hold conferences on a
regular basis often rotate their conference locations among various
regions of the U.S. By offering a significant number of affiliated luxury
resort alternatives to our corporate and group customers, we believe that
we will be able to encourage them to use our resorts on a regular basis.
- CAPITALIZING ON INTEGRATION OF RESORT ACQUISITIONS. We believe the
integration of certain aspects of our resort operations will allow us to
capitalize on our experienced management team, as well as to realize
significant operating efficiencies. Each member of our leisure and
recreation senior management team has over 20 years of experience in the
resort and real estate industries. We believe our management team's
ability to develop incremental revenue streams and generate cash flow
growth has been demonstrated by the success of the Boca Raton Resort and
Club. In addition, we believe the management of all of our resorts by a
single management team, with established practices and systems, will
improve the efficiency of our resort operations. We are focusing on
integrating the operations of all of our resorts, including reservations,
purchasing, training, information systems, insurance and marketing, in
order to achieve greater operating efficiencies and improved profit
margins.
- MAXIMIZING OPPORTUNITIES AT THE NATIONAL CAR RENTAL CENTER. We believe
the National Car Rental Center, which was completed in October 1998, will
significantly increase our ability to market and profit from the
Panthers. In addition, we believe our ability to participate in the
revenues from non-hockey events held at the National Car Rental Center
will increase the cash flow from our
4
<PAGE> 11
entertainment and sports operations. We participate in all of the
revenues from the National Car Rental Center, including revenues from the
sale of Panthers tickets, the leasing of luxury suites and premium club
seats, arena advertising and sponsorships, food and beverage concessions
and parking, as well as revenue from other entertainment events.
- EVALUATING OPPORTUNISTIC ACQUISITIONS/DIVESTITURES. We continuously
evaluate ownership, acquisition and divestiture alternatives relating to
our two business segments with the intention of maximizing value.
RESORT INDUSTRY OVERVIEW
We believe our luxury resorts compete most directly with "luxury resort"
hotels, which are defined by Smith Travel Research as resorts whose average
daily room rate is in the top 15% of their resort markets. According to Smith
Travel Research, as of December 31, 1998 there are approximately 334 luxury
resorts in the United States, consisting of approximately 131,715 rooms. The
room supply in the luxury resort segment of the hotel and lodging industry has
been characterized by low growth from 1994 to 1998, having increased at a
compounded annual rate of 1.7%. However, room revenue for this luxury resort
segment grew at a compounded annual rate of approximately 8.4% between 1994 and
1998, which we believe reflects increased demand.
We believe that demand in the luxury resort sector will continue to
increase in the future as a result of the following key demographic trends:
- Growth in the population over 40 years old which is expected to increase
22% from 113 million presently to 138 million in the year 2010;
- Increases in leisure time and disposable income that are expected to
occur as the "baby-boom" generation matures;
- Increasing popularity of golf, spas, boating and restaurant dining; and
- Increasing corporate demand for quality, full-service facilities which
combine both group meeting facilities and recreational amenities.
PROFESSIONAL HOCKEY INDUSTRY OVERVIEW
The National Hockey League was established in 1917 and comprises 27
professional hockey teams based in major cities in the U.S. and Canada. The NHL
has continued to grow in popularity, as evidenced by attendance of approximately
18.8 million and record revenues from ticket sales of approximately $613.0
million during the 1997-1998 season, compared to attendance of approximately
13.2 million and ticket sales of approximately $300.0 million during the
1987-1988 season, and an increase in gross retail sales of NHL licensed
merchandise in the United States from approximately $45.0 million in 1988 to
approximately $1.0 billion in 1997-1998. The growing popularity of hockey is
further evidenced by the $80.0 million franchise fee for the new NHL expansion
teams to enter the league between 1998 and 2000, a 60% increase from the $50.0
million the Panthers paid in 1993. In addition, the NHL recently agreed to a
five-year $600.0 million national television contract with ABC and ESPN, which
will be shared equally among the NHL teams. The new contract will begin with the
1999-2000 season and will be approximately three times the dollar amount of the
NHL's existing television contract.
5
<PAGE> 12
RECENT DEVELOPMENTS
FINANCINGS
On February 18, 1999, we completed a private placement of 4,022,561 shares
of our Class A common stock at $10.25 per share. The Private Placement resulted
in net proceeds to us of approximately $40.2 million.
On April 6, 1999, we consummated the sale of 1,575,621 shares of our Class
A common stock at a price of $10.25 per share, pursuant to our rights offering
which expired on March 31, 1999. The rights offering resulted in net proceeds to
us of approximately $16.0 million.
We entered into a new revolving credit facility in the amount of $146.0
million at the same time as the closing of the Private Debt Offering. This
facility was provided by a syndicate of banks and other financial institutions
led by Bear, Stearns & Co. Inc., as syndication agent, and Bankers Trust
Company, as administrative agent. Borrowings under this facility bear interest
at a variable rate. The facility will mature approximately three years after the
date of the closing of the Private Debt Offering. We will refer to this facility
as the "New Credit Facility" elsewhere in this Prospectus.
INTERIM OPERATING RESULTS
On April 9, 1999, we announced our unaudited consolidated operating results
for the three months and nine months ended March 31, 1999. These operating
results, which are presented below and compared to our operating results for the
same periods in 1998, are not necessarily indicative of our operating results
which may be expected for the twelve months ending June 30, 1999.
FLORIDA PANTHERS HOLDINGS INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED MARCH 31
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS NINE MONTHS
------------------- -------------------
1998 1999 1998 1999
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenue:
Leisure and recreation.............................. $ 92,281 $113,426 $180,661 $242,298
Entertainment and sports............................ 13,471 28,862 34,620 57,317
-------- -------- -------- --------
Total revenue............................... 105,752 142,288 215,281 299,615
Operating Expenses:
Cost of leisure and recreation services............. 32,831 40,720 76,299 103,762
Cost of entertainment and sports services........... 18,218 22,133 39,795 44,294
Selling, general and administrative expenses........ 25,859 28,024 66,223 74,250
Amortization and depreciation expense............... 6,538 8,156 15,453 23,187
-------- -------- -------- --------
Total operating expenses.................... 83,446 99,033 197,770 245,493
-------- -------- -------- --------
Operating income...................................... 22,306 43,255 17,511 54,122
Interest and other income............................. 366 286 1,683 1,756
Interest and other expense............................ (7,865) (17,399) (14,528) (40,616)
Minority interest..................................... (887) (114) (1,743) (294)
-------- -------- -------- --------
Net income (1)........................................ $ 13,920 $ 26,028 $ 2,923 $ 14,968
======== ======== ======== ========
Net income per share -- basic......................... $ 0.40 $ 0.70 $ 0.09 $ 0.42
======== ======== ======== ========
Net income per share -- diluted....................... $ 0.39 $ 0.70 $ 0.08 $ 0.42
======== ======== ======== ========
Shares used in computing net income per
share -- basic...................................... 35,118 37,022 34,067 35,762
======== ======== ======== ========
Shares used in computing net income per
share -- diluted.................................... 35,788 37,061 34,474 35,924
======== ======== ======== ========
</TABLE>
- ---------------
(1) A provision for income taxes has been excluded from the three- and
nine-month presentation because the company has adequate net operating loss
carryforwards to offset taxes.
6
<PAGE> 13
ENTERTAINMENT AND SPORTS OPERATIONS
Since the opening of the National Car Rental Center in October 1998, the
Florida Panthers Hockey Club's financial performance has reflected the benefits
of the new arena and the related operating agreement. The new 30-year operating
agreement allows the Panthers to realize significant hockey and non-hockey
related cash flows, many of which are under multi-year contracts. During the
fiscal quarter ended December 31, 1998, our entertainment and sports business
generated EBITDA of $3.6 million versus a loss of $2.5 million for the
comparable period in 1997. During the three months ended March 31, 1999, our
entertainment and sports business generated EBITDA of $4.1 million versus a loss
of $7.5 million for the comparable period in 1998. Due primarily to these
improvements, our total consolidated pro forma Adjusted EBITDA increased from
$91.3 million for the twelve months ended December 31, 1998 to $105.9 million
for the twelve months ended March 31, 1999.
-------------------------
Our principal executive offices are located at 450 East Las Olas Boulevard,
Suite 1400, Fort Lauderdale, Florida 33301 and our telephone number is
(954)712-1300. We are located on the World Wide Web at www.pawinvestor.com and
our E-mail address is [email protected].
7
<PAGE> 14
THE INITIAL OFFERING
Pursuant to a Purchase Agreement dated as of April 15, 1999 (the "Purchase
Agreement"), we completed the sale of the Old Notes in an aggregate principal
amount of $340.0 million to the Initial Purchasers on April 21, 1999. The
Initial Purchasers subsequently resold the Old Notes to qualified institutional
buyers pursuant to Rule 144A under the Securities Act. The net proceeds from the
Private Debt Offering, of approximately $329.2 million after deducting discounts
to the Initial Purchasers and estimated offering expenses, were used to repay
our short-term indebtedness and part of our long-term indebtedness.
The Old Notes were sold pursuant to exemptions from, or in transactions not
subject to, the registration requirements of the Securities Act and applicable
state securities laws. As a condition to their purchase of the Old Notes, the
Initial Purchasers requested that we agree to commence the Exchange Offer
following the Private Debt Offering.
THE EXCHANGE OFFER
NOTES OFFERED................... We are offering for exchange up to
$340,000,000 aggregate principal amount of
9 7/8% Senior Subordinated Notes due 2009,
which we have registered under the Securities
Act. We refer to the Notes being offered
hereby as the New Notes. The terms of the New
Notes are substantially identical to the Old
Notes in all material respects, except that:
o the New Notes have been registered
under the Securities Act;
o the Old Notes have certain transfer
restrictions and registration rights;
and
o the New Notes will not contain certain
provisions relating to additional
interest to be paid to the Holders of
Old Notes under certain circumstances
relating to the timing of the Exchange
Offer.
EXCHANGE OFFER.................. We are offering to exchange the New Notes for
the Old Notes that are properly tendered and
accepted for exchange. We will issue the New
Notes promptly after the Expiration Date. If
you were not prohibited from participating in
the Exchange Offer and you did not tender
your Old Notes, you will have no further
exchange rights under the Registration Rights
Agreement with respect to such non-tendered
Old Notes once the Exchange Offer is
consummated. Accordingly, such Old Notes will
continue to be subject to the restrictions on
transfer contained in the legend thereon.
TENDERS, EXPIRATION DATE;
WITHDRAWAL; EXCHANGE DATE....... The Exchange Offer will expire at 5:00 p.m.,
New York City time, on June , 1999, which
is 20 business days from the date of this
Prospectus, unless extended by us in our sole
discretion. You may withdraw and retender any
Old Notes tendered pursuant to the Exchange
Offer at any time prior to the expiration
date of the Exchange Offer. We will return to
you any of your tendered Old Notes not
accepted for exchange for any reason without
expense as promptly as practicable after the
expiration or termination of the Exchange
Offer. The date of acceptance for exchange of
all Old Notes properly tendered and not
withdrawn for New Notes (the "Exchange Date")
will be
8
<PAGE> 15
the first business day following the
expiration date of the Exchange Offer or as
soon as practicable thereafter.
SHELF REGISTRATION STATEMENT.... If the Exchange Offer is not permitted by
applicable law or Commission policy or you
notify us in a timely manner of the
occurrence of certain events set forth in the
Registration Rights Agreement, we have agreed
to register the Old Notes with a shelf
registration statement and use our best
efforts to cause such registration statement
to be declared effective by the Commission
within certain time periods after the
consummation of the Exchange Offer. We have
agreed to maintain the effectiveness of the
shelf registration statement for, under
certain circumstances, a maximum of two years
to cover resales of the Old Notes held by
such holders.
ACCRUED INTEREST ON THE NEW
NOTES........................... Each New Note will bear interest from the
most recent date to which interest has been
paid on the Old Note or, if no such payment
has been made, from April 15, 1999. Interest
on the Old Notes accepted for exchange will
cease to accrue upon issuance of the New
Notes.
PROCEDURES FOR TENDERING OLD
NOTES........................... If you want to accept the Exchange Offer, you
must complete, sign and date the Letter of
Transmittal, or a facsimile thereof, in
accordance with the instructions contained
herein and therein, and mail or otherwise
deliver such Letter of Transmittal, or such
facsimile, together with either certificates
for the Old Notes or a book-entry
confirmation of such Old Notes into the
book-entry transfer facility, if such
procedure is available, and any other
required documentation, to The Bank of New
York, as Exchange Agent (the "Exchange
Agent"), at the address set forth herein and
in the Letter of Transmittal.
SPECIAL PROCEDURES FOR
BENEFICIAL OWNERS............... Any beneficial owner of Old Notes whose Old
Notes are registered in the name of a broker,
dealer, commercial bank, trust company or
other nominee and who wishes to tender such
Old Notes for exchange should contact the
registered Holder and instruct such
registered Holder to tender such Old Notes on
the beneficial owner's behalf. If such
beneficial owner wishes to tender its Old
Notes on such owner's own behalf, such owner
must, prior to completing and executing the
Letter of Transmittal and delivering its Old
Notes, either make appropriate arrangements
to register ownership of the Old Notes in
such owner's name or obtain a properly
completed bond power from the registered
Holder. The transfer of registered ownership
may take considerable time and may not be
able to be completed prior to the Expiration
Date.
GUARANTEED DELIVERY
PROCEDURES...................... If you want to tender your Old Notes for
exchange and your Old Notes are not
immediately available or you cannot deliver
the Old Notes or any other documents required
by the Letter of Transmittal to the Exchange
Agent in a timely manner, you must tender
your Old Notes according to the delivery
procedures set forth in "The Exchange
Offer -- Guaranteed Delivery Procedures"
section of this Prospectus.
9
<PAGE> 16
CERTAIN FEDERAL INCOME TAX
CONSIDERATIONS................ The exchange pursuant to the Exchange Offer
will not result in the recognition of income,
gain or loss to you or our Company for
federal income tax purposes.
USE OF PROCEEDS................. We will not receive any proceeds from the
Exchange Offer.
EXCHANGE AGENT.................. The Bank of New York, the trustee under the
Indenture, is serving as Exchange Agent in
connection with the Exchange Offer.
CONSEQUENCES OF NOT EXCHANGING OLD NOTES
If you do not exchange your Old Notes for New Notes pursuant to the
Exchange Offer, you will continue to be subject to the restrictions on transfer
of such Old Notes as set forth in the legend on such notes as a consequence of
the issuance of the Old Notes pursuant to exemptions from, or in transactions
not subject to, the registration requirements of the Securities Act and
applicable state securities laws. In general, you may not offer or sell your Old
Notes unless registered under the Securities Act, except pursuant to an
exemption from, or in a transaction not subject to, the Securities Act and
applicable state securities laws. We do not currently anticipate that we will
register the Old Notes under the Securities Act.
SUMMARY DESCRIPTION OF THE NEW NOTES
The terms of the New Notes and the Old Notes are substantially identical in
all material respects, except for certain transfer restrictions and registration
rights relating to the Old Notes and except for certain provisions relating to
additional interest to be paid to the Holders of Old Notes under certain
circumstances relating to the timing of the Exchange Offer. The New Notes will
evidence the same debt as the Old Notes and will be entitled to the benefits of
the Indenture. See "Description of the Notes."
SECURITIES....................... $340,000,000 in principal amount of 9 7/8%
Senior Subordinated Notes, which we have
registered under the Securities Act.
MATURITY......................... April 15, 2009.
INTEREST......................... Semi-annually in cash in arrears on April
15 and October 15 of each year, starting
October 15, 1999.
GUARANTEES....................... All of our domestic subsidiaries other than
those treated as unrestricted subsidiaries
will guarantee the New Notes on a senior
subordinated basis. Future domestic
subsidiaries which are deemed restricted
subsidiaries will also be required to
guarantee the New Notes. As of the date of
issuance of the New Notes, our existing
subsidiaries will guarantee the New Notes.
See "Description of Notes -- Subsidiary
Guarantees."
RANKING.......................... The New Notes will be our general unsecured
senior subordinated obligations and will be
subordinated to all of our senior
indebtedness. The New Notes will rank
equally with any of our unsecured senior
subordinated indebtedness and will rank
senior to any of our subordinated
indebtedness. Our subsidiaries' guarantees
with respect to the New Notes will be
general unsecured senior subordinated
obligations of such guarantors and will be
subordinated to all of such guarantors'
senior indebtedness. The guarantees will
rank equally with any senior subordinated
indebtedness of the guarantors and
10
<PAGE> 17
will rank senior to such guarantors'
subordinated indebtedness.
Because the New Notes are subordinated, in
the event of bankruptcy, liquidation or
dissolution, holders of the New Notes will
not receive any payment until holders of
senior debt have been paid in full. The
term "senior debt" is defined in the
"Description of Notes -- Subordination"
section of this Prospectus.
As of December 31, 1998, on a pro forma
basis after giving effect to our private
placement of Class A common stock which
closed on February 18, 1999, our rights
offering of Class A common stock which
closed on April 6, 1999, the initial
borrowings under our New Credit Facility,
the Private Debt Offering and the
application of the net proceeds from these
financings, the aggregate amount of our
consolidated senior debt would be $224.6
million, of which only $24.9 million is a
direct obligation of our Company. In
addition, approximately $156.1 million
would have been available for additional
borrowing under our credit facilities and
the guarantors' credit facilities, all of
which would have been senior debt, if
borrowed.
OPTIONAL REDEMPTION.............. On or after April 15, 2004, we may redeem
some or all of the New Notes at any time at
the redemption prices described in the
section "Description of Notes" under the
heading "Optional Redemption."
Prior to April 15, 2002, we may redeem up
to 35% of the New Notes with the net
proceeds of certain sales of equity at the
price listed in the section "Description of
Notes" under the heading "Optional
Redemption."
MANDATORY OFFER TO REPURCHASE.... If we experience a change of control or
sell assets, in certain circumstances we
must offer to repurchase the New Notes at
the prices listed in the section
"Description of Notes" under the heading
"Repurchase at the Option of Holders."
BASIC COVENANTS OF THE
INDENTURE........................ We will issue the New Notes under an
indenture with The Bank of New York, as
trustee. The indenture, among other things,
restricts our ability and the ability of
our restricted subsidiaries to:
- borrow money;
- pay dividends on stock or purchase our
stock;
- make investments and other restricted
payments;
- use assets as security in other
transactions;
- sell certain assets or merge with or into
other companies;
- enter into certain transactions with
affiliates;
- sell stock in our restricted
subsidiaries; and
- restrict dividends or other payments to
us.
11
<PAGE> 18
These covenants are subject to important
exceptions and qualifications, which are
described in the section "Description of
Notes" under the heading "Certain
Covenants" in this Prospectus.
EXCHANGE OFFER; REGISTRATION
RIGHTS........................... Holders of New Notes (other than as set
forth below) are not entitled to any
registration rights with respect to the New
Notes. Pursuant to the Registration Rights
Agreement among the Company, the Guarantors
and the Initial Purchasers, the Company
agreed to file an exchange offer
registration statement with respect to an
offer to exchange the Old Notes for the New
Notes. The Registration Statement of which
this Prospectus is a part constitutes such
exchange offer registration statement.
Under certain circumstances, certain
holders of Notes (including holders of Old
Notes who may not participate in the
Exchange Offer) may require us to file, and
cause to become effective, a shelf
registration statement under the Securities
Act which would cover resales of Notes by
such holders.
USE OF PROCEEDS.................. We will receive no proceeds from the
Exchange Offer.
You should refer to the section entitled "Risk Factors" beginning on page
17 for an explanation of certain risks of investing in the New Notes.
12
<PAGE> 19
SUMMARY UNAUDITED CONSOLIDATED PRO FORMA FINANCIAL DATA
(IN THOUSANDS, EXCEPT OPERATING PERCENTAGE DATA AND RATIOS)
The following table presents summary pro forma consolidated statement of
operations, other operating data and balance sheet data of our company for the
periods and dates indicated. The pro forma statement of operations, other
operating data and balance sheet data give effect to the acquisition and
financing transactions described under the caption headed "Unaudited Condensed
Consolidated Pro Forma Financial Statements" elsewhere in this Prospectus. The
summary pro forma financial information set forth below is presented for
illustrative purposes only and is not necessarily indicative of what the actual
financial condition or results of operations of our company would have been had
those transactions and events been consummated on the dates presented. This
summary pro forma financial information does not purport to be indicative of our
financial condition or results of operations for any future period.
The following summary unaudited consolidated pro forma financial data
should be read in conjunction with the section headed "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and the
historical financial statements included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED
FISCAL YEAR SIX MONTHS -----------------------------
ENDED ENDED DECEMBER 31,
JUNE 30, ------------------- DECEMBER 31, FEBRUARY 28,
1998 1997 1998 1998 1999
----------- -------- -------- ------------- -------------
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS(1):
Revenue:
Leisure and recreation........................... $303,361 $120,369 $128,872 $311,864 $315,435
Entertainment and sports......................... 43,586 21,149 28,455 50,892 60,477
-------- -------- -------- -------- --------
Total revenue.............................. 346,947 141,518 157,327 362,756 375,912
Operating expenses:
Cost of leisure and recreation services.......... 130,072 57,023 63,042 136,091 136,804
Cost of entertainment and sports services........ 45,919 21,577 22,161 46,503 48,725
Selling, general and administrative expenses..... 105,205 50,614 46,226 100,817 103,450
Depreciation and amortization.................... 28,693 12,976 15,031 30,748 31,166
-------- -------- -------- -------- --------
Total operating expenses................... 309,889 142,190 146,460 314,159 320,145
Operating income (loss)............................ 37,058 (672) 10,867 48,597 55,767
Interest and other income.......................... 2,505 1,516 1,470 2,459 2,525
Interest and other expense......................... (49,474) (25,654) (24,572) (48,392) (48,720)
Minority interest.................................. (1,813) (856) (180) (1,137) (361)
-------- -------- -------- -------- --------
Net income (loss)(2)............................... $(11,724) $(25,666) $(12,415) $ 1,527 $ 9,211
======== ======== ======== ======== ========
OTHER DATA(1):
EBITDA:
Leisure and recreation........................... $ 89,820 $ 22,566 $ 29,922 $ 97,176 $ 98,544
Entertainment and sports......................... (12,092) (5,161) 1,471 (5,460) 1,308
Corporate........................................ (9,472) (3,585) (4,025) (9,912) (10,394)
-------- -------- -------- -------- --------
Total EBITDA(3)............................ 68,256 13,820 27,368 81,804 89,458
Net membership fees deferred during the
period(4)........................................ 5,814 -- 3,723 9,537 9,317
-------- -------- -------- -------- --------
Adjusted EBITDA(5)................................. $ 74,070 $ 13,820 $ 31,091 $ 91,341 $ 98,775
======== ======== ======== ======== ========
EBITDA margin(6)................................... 20% 10% 17% 23% 24%
Adjusted EBITDA margin(7).......................... 21% 10% 19% 25% 26%
Cash interest expense(8)........................... $ 46,147 $ 23,326 $ 24,233 $ 47,054 $ 47,515
-------- -------- -------- -------- --------
Adjusted EBITDA/Cash interest expense.............. 1.9x 2.1x
Net debt/Adjusted EBITDA(9)(10).................... 6.0x 5.6x
</TABLE>
<TABLE>
<CAPTION>
AT DECEMBER 31, 1998
-----------------------------
HISTORICAL AS ADJUSTED
---------- -----------
<S> <C> <C>
BALANCE SHEET DATA(1):
Cash and cash equivalents................................... $ 12,884 $ 12,884
Restricted cash............................................. 24,790 24,790
Total current assets........................................ 96,053 96,053
Total assets................................................ 1,214,627 1,228,394
Total debt.................................................. 607,026 564,568
Total shareholders' equity.................................. 419,471 475,696
</TABLE>
13
<PAGE> 20
- ---------------
(1) Pro forma and as adjusted figures reflect the acquisition of the Registry
Hotel at Pelican Bay, the Arizona Biltmore Hotel and the Edgewater Beach
Hotel, as applicable, as well as the consummation of the private placement
of our Class A common stock which closed February 18, 1999, the rights
offering of our Class A common stock which closed on April 6, 1999, the
initial borrowings under our New Credit Facility and the Private Debt
Offering and the application of the net proceeds from these financings. See
"Unaudited Condensed Consolidated Pro Forma Financial Statements."
(2) A pro forma tax provision has been excluded from the presentation based on
the fact that we have adequate net operating loss carryforwards to offset
pro forma earnings presented.
(3) EBITDA represents earnings before interest expense, income taxes,
depreciation, amortization and minority interest. Our management and
certain investors use EBITDA and Adjusted EBITDA (see below) as indicators
of our historical ability to service debt, to sustain potential future
increases in debt and to satisfy capital requirements. However, neither
EBITDA nor Adjusted EBITDA is intended to represent cash flows for the
period. In addition, they have not been presented as alternatives to either
(a) operating income (as determined by generally accepted accounting
principles, or GAAP) as an indicator of operating performance or (b) cash
flows from operating, investing and financing activities (as determined by
GAAP) and is thus susceptible to varying calculations. EBITDA and Adjusted
EBITDA as presented may not be comparable to other similarly titled
measures of other companies.
(4) Represents the annual change in deferred revenue from the Premier Club at
the Boca Raton Resort and Club net of expenses related to the Premier Club.
The Premier Club currently requires a non-refundable initial membership fee
of $45,000 and annual social dues starting at $2,300. We offer internal
financing of the initial membership fee to our customers. Accordingly, the
net membership fees deferred during the period include cash as well as
financed membership sales. Members of the Premier Club have access to the
Boca Raton Resort and Club grounds and recreational facilities, which are
otherwise restricted to resort guests. Initial membership fees are recorded
as revenues over the estimated life of the membership. Unrecognized
portions of the initial membership fees are reflected as deferred revenue
on the Consolidated Balance Sheets.
(5) Adjusted EBITDA represents EBITDA plus the amount of net membership fees
deferred during the period.
(6) EBITDA margin is defined as EBITDA divided by total revenue.
(7) Adjusted EBITDA margin is defined as Adjusted EBITDA divided by the sum of
total revenue plus net membership fees deferred during the period.
(8) Cash interest expense is defined as interest expense less amortization of
financing costs and imputed interest expense on certain obligations with no
stated interest rate plus capitalized interest expense.
(9) Net debt is defined as our combined indebtedness, less cash and cash
equivalents.
(10) For the twelve-month period ended December 31, 1998, represents net debt as
of December 31, 1998 divided by Adjusted EBITDA for the twelve-month period
ended December 31, 1998. For the twelve-month period ended February 28,
1999, represents net debt as of February 28, 1999, which was materially
unchanged from December 31, 1998, divided by Adjusted EBITDA for the
twelve-month period ended February 28, 1999.
14
<PAGE> 21
SUMMARY CONSOLIDATED HISTORICAL FINANCIAL DATA
(IN THOUSANDS, EXCEPT OPERATING MARGINS AND RATIOS)
The following table presents summary consolidated statement of operations,
other operating data and balance sheet data of our company for the periods and
the dates indicated. The summary statement of operations and other operating
data for each of the fiscal years 1996, 1997 and 1998 presented below were
derived from our consolidated financial statements and notes thereto, which have
been audited by Arthur Andersen LLP, independent certified public accountants.
The summary statement of operations and other operating data for the six months
ended December 31, 1997 and 1998 and the summary balance sheet data at December
31, 1998 were derived from unaudited interim condensed consolidated financial
statements and notes thereto included elsewhere in this Prospectus. The
unaudited interim condensed consolidated financial statements of our company
include all adjustments (consisting only of normal recurring adjustments) which
in the opinion of our management are necessary for a fair presentation of our
financial position and results of operations for these periods. Historical
operating results for the six months ended December 31, 1997 and 1998 are not
necessarily indicative of the results that may be expected for a full year.
<TABLE>
<CAPTION>
SIX MONTHS ENDED
FISCAL YEAR ENDED JUNE 30, DECEMBER 31,
------------------------------ --------------------
1996 1997 1998 1997 1998
-------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS:
Revenue:
Leisure and recreation.................................... $ -- $ 17,567 $252,603 $ 88,380 $128,872
Entertainment and sports.................................. 34,087 36,695 43,586 21,149 28,455
-------- -------- -------- -------- --------
Total revenue....................................... 34,087 54,262 296,189 109,529 157,327
Operating expenses:
Cost of leisure and recreation services................... -- 6,658 110,084 43,468 63,042
Cost of entertainment and sports services................. 35,958 35,135 45,919 21,577 22,161
Selling, general and administrative expenses.............. 8,371 15,150 91,579 40,364 46,226
Depreciation and amortization............................. 9,815 5,698 23,155 8,915 15,031
-------- -------- -------- -------- --------
Total operating expenses............................ 54,144 62,641 270,737 114,324 146,460
Operating income (loss)..................................... (20,057) (8,379) 25,452 (4,795) 10,867
Interest and other income................................... 122 1,923 2,307 1,318 1,470
Interest and other expense.................................. (5,030) (3,364) (24,673) (6,663) (23,217)
Minority interest........................................... (174) (440) (1,813) (856) (180)
-------- -------- -------- -------- --------
Net income (loss)........................................... $(25,139) $(10,260) $ 1,273 $(10,996) $(11,060)
======== ======== ======== ======== ========
OTHER DATA:
Net cash flow from operating, investing and financing
activities(1)............................................. $ (772) $ 13,244 $ 23,519 $ (842) $(24,344)
EBITDA:
Leisure and recreation.................................... -- 5,512 72,478 14,184 29,922
Entertainment and sports.................................. (10,120) (6,040) (12,092) (5,161) 1,471
Corporate................................................. -- (230) (9,472) (3,585) (4,025)
-------- -------- -------- -------- --------
Total EBITDA(2)..................................... (10,120) (758) 50,914 5,438 27,368
Net membership fees deferred during the period(3)........... -- -- 5,814 -- 3,723
-------- -------- -------- -------- --------
Adjusted EBITDA(4).......................................... $(10,120) $ (758) $ 56,728 $ 5,438 $ 31,091
======== ======== ======== ======== ========
EBITDA margin(5)............................................ -- -- 17% 5% 17%
Adjusted EBITDA margin(6)................................... -- -- 19% 5% 19%
Capital expenditures........................................ $ 140 $ 1,494 $ 47,806 $ 30,518 $ 61,781
Cash interest expense(7).................................... 5,030 3,364 23,660 6,663 22,968
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31,
1998
------------
<S> <C>
BALANCE SHEET DATA:
Cash and cash equivalents................................... $ 12,884
Restricted cash............................................. 24,790
Total current assets........................................ 96,053
Total assets................................................ 1,214,627
Total debt.................................................. 607,026
Total shareholders' equity.................................. 419,471
</TABLE>
15
<PAGE> 22
- ---------------
(1) The details of the cash flows from these items are presented in the
Consolidated Statements of Cash Flows included elsewhere in this Prospectus.
(2) EBITDA represents earnings before interest expense, income taxes,
depreciation, amortization and minority interest. Our management and certain
investors use EBITDA and Adjusted EBITDA (see below) as indicators of our
historical ability to service debt, to sustain potential future increases in
debt and to satisfy capital requirements. However, neither EBITDA nor
Adjusted EBITDA is intended to represent cash flows for the period. In
addition, they have not been presented as alternatives to either (i)
operating income (as determined by generally accepted accounting principles,
or GAAP) as an indicator of operating performance or (ii) cash flows from
operating, investing and financing activities (as determined by GAAP) and is
thus susceptible to varying calculations. EBITDA and Adjusted EBITDA as
presented may not be comparable to other similarly titled measures of other
companies.
(3) Represents the annual change in deferred revenue from the Premier Club at
the Boca Raton Resort and Club net of expenses related to the Premier Club.
The Premier Club currently requires a non-refundable initial membership fee
of $45,000 and annual social dues starting at $2,300. We offer internal
financing of the initial membership fee to our customers. Accordingly, the
net membership fees deferred during the period include cash as well as
financed membership sales. Members of the Premier Club have access to the
Boca Raton Resort and Club grounds and recreational facilities, which are
otherwise restricted to resort guests. Initial membership fees are recorded
as revenues over the estimated life of the membership. Unrecognized portions
of the initial membership fees are reflected as deferred revenue on the
Consolidated Balance Sheets.
(4) Adjusted EBITDA represents EBITDA plus the amount of net membership fees
deferred during the period.
(5) EBITDA margin is defined as EBITDA divided by total revenue.
(6) Adjusted EBITDA margin is defined as Adjusted EBITDA divided by the sum of
total revenue plus net membership fees deferred during the period.
(7) Cash interest expense is defined as interest expense less amortization of
financing costs and imputed interest on certain obligations with no stated
interest rate plus capitalized interest expense.
16
<PAGE> 23
RISK FACTORS
An investment in the New Notes involves a high degree of risk. You should
carefully consider the risk factors set forth below, as well as the other
information appearing elsewhere in this Prospectus, before making an investment
in the New Notes.
RISKS RELATING TO THE NEW NOTES
HOLDERS RESPONSIBLE FOR COMPLIANCE WITH EXCHANGE OFFER PROCEDURES; CONSEQUENCES
OF FAILURE TO
EXCHANGE
We will issue the New Notes in exchange for the Old Notes pursuant to this
Exchange Offer only after we have received such Old Notes, along with a properly
completed and duly executed Letter of Transmittal and all other required
documents, in a timely manner. Therefore, if you want to tender your Old Notes
in exchange for New Notes, you should allow sufficient time to ensure timely
delivery. Neither the Exchange Agent nor the Company is under any duty to give
notification of defects or irregularities with respect to the tender of Old
Notes for exchange. The Exchange Offer will expire at 5:00 p.m. New York City
time on June , 1999 (the "Expiration Date"). Old Notes that are not tendered
or are tendered but not accepted for exchange will, following the Expiration
Date and the consummation of this Exchange Offer, continue to be subject to the
existing restrictions upon transfer thereof. In general, the Old Notes may not
be offered or sold, unless registered under the Securities Act or except
pursuant to an exemption from or in a transaction not subject to, the Securities
Act. In addition, if you are still holding an Old Note after the Expiration Date
and the Exchange Offer has been consummated, subject to certain exceptions, you
will not be entitled to any rights to have such Old Notes registered under the
Securities Act or to any similar rights under the Registration Rights Agreement
(subject to limited exceptions, if applicable). We do not currently anticipate
that we will register the Old Notes under the Securities Act.
The New Notes and any Old Notes which remain outstanding after consummation
of the Exchange Offer will vote together as a single class for purposes of
determining whether Holders of the requisite percentage thereof have taken
certain actions or exercised certain rights under the Indenture.
REQUIREMENTS FOR TRANSFER OF NEW NOTES
Based on interpretations by the staff of the Commission, as set forth in
no-action letters issued to third parties, we believe that you may offer for
resale, resell and otherwise transfer the New Notes without compliance with the
registration and prospectus delivery provisions of the Securities Act, subject
to certain limitations. These limitations include that you are not an
"affiliate" of ours within the meaning of Rule 405 under the Securities Act and,
provided that such New Notes are acquired in the ordinary course of your
business and that you have no arrangement with any person to participate in the
distribution of such New Notes. However, we have not submitted a no-action
letter to the Commission regarding this Exchange Offer and we cannot assure you
that the Commission would make a similar determination with respect to the
Exchange Offer as in such other circumstances. If you are an affiliate of the
Company, are engaged in or intend to engage in or have any arrangement or
understanding with respect to a distribution of the New Notes to be acquired
pursuant to the Exchange Offer, you (i) may not rely on the applicable
interpretations of the staff of the Commission and (ii) must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any resale transaction. Each broker-dealer that receives New
Notes for its own account pursuant to the Exchange Offer must acknowledge that
it will deliver a prospectus meeting the requirements under the Securities Act
in connection with any resale of such New Notes. The Letter of Transmittal
states that by so acknowledging and delivering a prospectus, a broker-dealer
will not be deemed to admit that it is an "underwriter" within the meaning of
the Securities Act. This Prospectus, as it may be amended or supplemented from
time to time, may be used by a broker-dealer in connection with resales of New
Notes where the Old Notes exchanged for such New Notes were acquired by such
broker-dealer as a result of market-making activities or other trading
activities. To comply with the securities laws of certain jurisdictions, if
applicable, the New Notes may not be offered or sold unless they have been
registered or qualified for sale in such jurisdictions or an exemption from
registration or qualification is available.
17
<PAGE> 24
OUR SUBSTANTIAL DEBT COULD INTERFERE WITH OUR ABILITY TO PAY INTEREST AND
PRINCIPAL ON THE NEW NOTES.
We have, and will continue to have after the Exchange Offer, a significant
amount of debt. After giving pro forma effect to our private placement of Class
A common stock which closed on February 18, 1999, our rights offering of Class A
common stock which closed on April 6, 1999, the initial borrowings under our New
Credit Facility, the Private Debt Offering and the application of the net
proceeds from these financings, we would have had total debt and stockholders'
equity at December 31, 1998 as set forth in the table below:
<TABLE>
<CAPTION>
AT DECEMBER 31,
1998
----------------------
(DOLLARS IN THOUSANDS)
<S> <C>
Total debt.................................................. $564,568
Stockholders' equity........................................ 475,696
</TABLE>
Under the indenture governing the New Notes (the "Indenture"), we and our
subsidiaries will be permitted to incur substantial additional debt in the
future. See "Capitalization," "Selected Consolidated Historical Financial Data,"
"Selected Unaudited Consolidated Pro Forma Financial Data" and "Description of
Notes."
The amount of our indebtedness could have important consequences to you,
including the following:
- making it more difficult for us to satisfy our obligations with
respect to the New Notes;
- increasing our vulnerability to adverse general economic and industry
conditions;
- requiring us to dedicate a substantial portion of our cash flow from
operations to payments of principal and interest on our debt, thereby
reducing the availability of our cash flow to fund working capital,
capital expenditures, acquisitions or other general corporate
purposes;
- limiting our ability to obtain additional financing to fund future
working capital, capital expenditures, acquisitions and other general
corporate requirements;
- limiting our flexibility in planning for, or reacting to, changes in
our business and the industry in which we operate; and
- placing us at a competitive disadvantage compared to our less
leveraged competitors.
THE NEW NOTES AND GUARANTEES WILL BE SUBORDINATED TO OUR AND OUR SUBSIDIARY
GUARANTORS' SENIOR DEBT.
The New Notes and the Guarantees will be subordinated in right of payment
to all of our and the subsidiary guarantors' existing and future senior debt. As
of December 31, 1998, on a pro forma basis after giving effect to our private
placement of Class A common stock which closed on February 18, 1999, our rights
offering of Class A common stock which closed on April 6, 1999, the initial
borrowings under our New Credit Facility, the Private Debt Offering and the
application of the net proceeds from these financings, the aggregate amount of
our consolidated senior debt would be $224.6 million, of which only $24.9
million is a direct obligation of our Company. In addition, approximately $156.1
million would have been available for additional borrowings under our and the
subsidiary guarantors' credit facilities, all of which would have been senior
debt, if borrowed. The Indenture and our other debt instruments will permit us
and the subsidiary guarantors to incur substantial additional debt, including
senior debt.
As a result of the subordination provisions in the Indenture, upon certain
liquidation, dissolution or bankruptcy events, senior debt will be entitled to
be paid in full in cash before any payment may be made with respect to the New
Notes or Guarantees. In addition, the subordination provisions of the Indenture
will provide that payments with respect to the New Notes and the Guarantees will
be prohibited in the event of a payment default on senior debt. Further, in the
event of certain non-payment defaults on senior debt, payments with respect to
the New Notes and the Guarantees will be prohibited for up to 179 days from the
date written notice of the default is received. Accordingly, in the event of a
bankruptcy, liquidation or reorganization, holders of the New Notes may recover
less, ratably, than our or our subsidiary guarantors'
18
<PAGE> 25
creditors who are holders of senior debt. In any of the foregoing events, we
cannot assure you that we would have sufficient assets to pay amounts due on the
New Notes.
THE NEW NOTES ARE UNSECURED. THE CLAIMS OF HOLDERS OF SECURED DEBT WILL HAVE
PRIORITY OVER YOUR CLAIMS.
The New Notes will not be secured by any of our assets. Our obligations and
those of our subsidiary guarantors, which directly or indirectly are the
borrowers under our New Credit Facility and our other debt instruments, are
secured by security interests in our resorts, the Panthers and substantially all
of our assets and the other assets of our subsidiary guarantors. If we become
insolvent or are liquidated, or if payment under these credit facilities is
accelerated, the lenders under these debt instruments would be entitled to
exercise the remedies available to a secured lender. Accordingly, these lenders
will have a claim on substantially all of our assets that will have priority
over any claim you may have for payment under the New Notes or the Guarantees.
Accordingly, it is possible that there would be no assets remaining from which
claims of the holders of the New Notes could be satisfied or, if any assets
remained, they might be insufficient to satisfy these claims fully. See
"Capitalization," "Management's Discussion and Analysis of Financial Condition
and Results of Operations -- Liquidity and Capital Resources," "Description of
Certain Indebtedness," "Description of Notes" and the Consolidated Financial
Statements and the notes thereto included elsewhere in this Prospectus.
WE ARE A HOLDING COMPANY AND NEARLY ALL OF OUR CASH FLOW COMES FROM OUR
SUBSIDIARIES.
We are a holding company with no direct operations and no significant
assets other than the stock of our subsidiaries. Although our subsidiary
guarantors are guaranteeing the New Notes, we depend on the cash flows of our
subsidiaries and the payment of funds to us from such subsidiary as loans,
dividends and advances to meet our obligations, including our obligation to pay
interest and principal on the New Notes. The ability of our subsidiaries to make
such funds available to us will be restricted by the terms of their existing and
future indebtedness, including the existing credit facilities and other debt at
our subsidiaries which own our resorts, and at our subsidiary which owns the
Florida Panthers Hockey Club (the "Panthers"). See "Description of Certain
Indebtedness."
OUR FINANCING AGREEMENTS LIMIT OUR OPERATING FLEXIBILITY.
The Indenture restricts, among other things, our ability to:
- borrow money;
- pay dividends on stock or make certain other restricted payments;
- use assets as security in other transactions;
- make investments;
- enter into certain transactions with our affiliates; and
- sell certain assets or merge with other companies.
If we fail to comply with these covenants, we would be in default under the
Indenture, and the principal and accrued interest on the New Notes would become
due and payable. See "Description of Notes -- Certain Covenants."
In addition, our New Credit Facility and the other debt instruments of our
subsidiary guarantors contain restrictive covenants which are generally more
restrictive than those contained in the Indenture. These debt instruments also
require us to maintain specified consolidated financial ratios and satisfy
certain consolidated financial tests. Our ability to meet those financial ratios
and financial tests may be affected by events beyond our control, and we cannot
assure you that we will meet those tests. If we fail to meet those tests or
breach any of the covenants, the lenders under these debt instruments could
declare all amounts outstanding thereunder, together with accrued interest, to
be immediately due and payable. If we are unable to repay those amounts, the
lenders could proceed against the collateral granted to them to secure that
indebtedness. We cannot assure
19
<PAGE> 26
you that our assets would be sufficient to repay in full such indebtedness or
any other indebtedness, including the Notes.
In addition, if we are in default under the Indenture, our credit
facilities or certain instruments governing our other indebtedness, that default
could constitute a cross-default under the Indenture, such credit facilities or
the instruments governing our other indebtedness, as applicable. See
"Description of Notes" and "Description of Certain Indebtedness."
FEDERAL AND STATE STATUTES ALLOW COURTS, UNDER SPECIFIC CIRCUMSTANCES, TO VOID
GUARANTEES AND REQUIRE NOTEHOLDERS TO RETURN PAYMENTS RECEIVED FROM GUARANTORS.
Under the federal bankruptcy laws and comparable provisions of state
fraudulent transfer laws, a Guarantee could be voided, or claims in respect of a
Guarantee could be subordinated to all other debts of the guarantor if, among
other things, the guarantor, at the time it incurred the debt evidenced by its
Guarantee, received less than reasonably equivalent value or fair consideration
for the incurrence of such debt and:
- was insolvent or rendered insolvent by reason of such incurrence;
- was engaged in a business or transaction for which that guarantor's
remaining assets constituted unreasonably small capital; or
- intended to incur, or believed that it would incur, debts beyond its
ability to pay such debts as they mature.
In addition, any payment by that guarantor pursuant to its Guarantee could
be required to be returned to that guarantor, or to a fund for the benefit of
the creditors of that guarantor.
The measures of insolvency for purposes of these fraudulent transfer laws
will vary depending upon the law applied in any proceeding to determine whether
a fraudulent transfer has occurred. Generally, however, a guarantor would be
considered insolvent if:
- the sum of its debts, including contingent liabilities, was greater
than the fair salable value of all of its assets;
- the present fair salable value of its assets was less than the amount
that would be required to pay its probable liability on its existing
debts, including contingent liabilities, as they become absolute and
mature; or
- it could not pay its debts as they become due.
On the basis of historical financial information, recent operating history
and other factors, we believe that each guarantor, after giving effect to its
Guarantee of the New Notes, will not be insolvent, will not have unreasonably
small capital for the business in which it is engaged and will not have incurred
debts beyond its ability to pay such debts as they mature. However, we cannot
assure you as to what standard a court would apply in making such determinations
or that a court would agree with our conclusions in this regard.
THERE IS NO PUBLIC MARKET FOR THE NEW NOTES, AND THE NEW NOTES ARE NOT FREELY
TRANSFERABLE.
Prior to the Exchange Offer, there has been no trading market for the New
Notes. We have been advised by the Initial Purchasers that they currently intend
to make a market in the New Notes; however, the Initial Purchasers are not
obligated to do so. Any market-making may be discontinued at any time, and we
cannot assure you that an active trading market for the New Notes will develop
or, if a trading market develops, that it will continue. Further, the liquidity
of, and trading market for, the New Notes may be adversely affected by declines
and volatility in the market for high yield securities generally. The liquidity
of and trading market for the New Notes also may be adversely affected by any
changes in our financial performance or prospects or in the prospects for the
other companies in our industry. We do not intend to list the New Notes on any
national securities exchange or to seek the admission thereof to trading in the
National Association of Securities Dealers Automated Quotation System.
20
<PAGE> 27
RISKS RELATED TO US
WE HAVE A HISTORY OF LOSSES.
We did not generate any operating income or net income for any year prior
to our fiscal year ended June 30, 1998. These losses were due primarily to the
operations of the Panthers. However, for the year ended June 30, 1998 and the
six months ended December 31, 1998, we had operating income of $25.5 million and
$10.9 million, respectively. For the year ended June 30, 1998, we also had net
income of $1.3 million, although higher interest expense in the six months ended
December 31, 1998 resulted in a net loss of $11.0 million. This increase in
operating income is due in part to our move into the high-end luxury resort
business, which is generally more profitable than professional sports
franchises. Operating income for our entertainment and sports business has also
improved recently due in significant part to the fact that we have been sharing
in the net profits of the newly-constructed National Car Rental Center. Despite
our recent increase in operating income, we cannot assure you that we will have
operating income or net income in the future.
WE MAY NEED ADDITIONAL FINANCING.
We believe that the cash flow from operations, together with borrowings
under our New Credit Facility, will be sufficient to finance our business
operations, meet our debt obligations and fund our short-term growth strategy.
However, we cannot assure you that our business will generate the level of cash
flow from operations that we expect or that future borrowings under our New
Credit Facility will be available to us. If our plans or assumptions change, if
our assumptions prove to be inaccurate or if we experience unanticipated costs
or competitive pressures, we may need to seek additional capital. We believe we
can obtain additional capital by selling debt or equity securities and/or by
borrowing money, although we cannot provide any assurances that we will be able
to do so. If we cannot obtain additional capital when it is needed, this may
have a material adverse effect on us.
WE MAY NEED TO MAKE SIGNIFICANT CAPITAL EXPENDITURES TO FURTHER DEVELOP OUR
RESORTS AND THESE EXPENDITURES MAY INVOLVE RISKS.
Our growth strategy contemplates expanding the infrastructure at certain of
our resorts or expanding within the respective geographic markets of certain of
the resorts. The resorts may also need renovations or other capital
improvements. Unexpected excessive costs of any expansion or needed renovation
or capital improvements could have a material adverse effect on our financial
condition or results of operations. Also, any capital expenditures we make on
expansion, renovation or improvement of the resorts may not generate the
financial returns we expect. Such capital expenditures could involve certain
risks, including:
- the possibility of environmental problems;
- the possibility that we will not have available cash to fund renovations
or that financing for renovations will not be available on favorable
terms;
- uncertainties as to market demand or deterioration in market demand after
commencement of renovations;
- the emergence of unanticipated zoning and regulatory requirements; and
- competition from other resorts, hotels and alternative lodging
facilities.
WE MAY NOT BE ABLE TO SUCCESSFULLY INTEGRATE THE OPERATIONS OF RESORTS THAT WE
HAVE ACQUIRED.
In order to take full economic advantage of our resort acquisitions, we
need to effectively integrate the administrative, financial and marketing
organizations of each resort. We also need to effectively implement appropriate
operational, financial and management systems. This process may require a
disproportionate amount of time and attention of our management and financial
and other resources. Although we believe that we have the opportunity for
synergies and cost savings as a result of our resort acquisitions, the timing or
amount of synergies or cost savings that may ultimately be attained is
uncertain. Some of the anticipated economic advantages from our resort
acquisitions may not be achieved if our operations are not successfully
integrated or the appropriate systems are not implemented in a timely manner.
The difficulties of that
21
<PAGE> 28
integration and implementation may initially be increased by the necessity of
coordinating and integrating personnel with different business backgrounds and
corporate cultures. We cannot assure you that we will be able to successfully
integrate the operations of the resorts or implement the appropriate systems. As
a result, our business strategy might not be effective and we may not be able to
achieve our goals.
WE FACE A VARIETY OF RISKS FROM OPERATING RESORTS.
We may encounter risks common to the operations of resorts, including
over-building, which may lower room rates, increases in operating costs due to
inflation or other factors, dependence on tourism and weather conditions and
increases in travel costs and poor economic conditions. In addition, we may face
risks relating to the concentration of our resorts in South Florida. Any of
these risks could have a material adverse effect on our financial condition or
results of operations.
OUR BUSINESSES ARE HIGHLY COMPETITIVE.
The resort and hotel industry is highly competitive. Competitive factors
within the resort and hotel industry include room rates, quality of
accommodations, service levels, convenience of location, reputation, reservation
systems, name recognition and the availability of alternative resort and hotel
operations in local markets. We face competition from a variety of other resort
and hotel operations, as well as country and other social clubs, many of which
have greater financial and other resources than us. An increase in the number of
our competitors' resorts could have a material adverse effect on the levels of
occupancy and average room rates of our resorts. If we fail to adequately
respond to competitive pressures in our market, it may have a material adverse
effect on us.
The Panthers compete for entertainment and sports dollars not only with
other major league sports, but also with college athletics and other
sports-related entertainment. During portions of its season, the Panthers
experience competition from professional basketball (the Miami Heat),
professional football (the Miami Dolphins) and professional baseball (the
Florida Marlins). Mr. Huizenga currently controls the Miami Dolphins. In
addition, minor league sports franchises (including minor league hockey),
colleges and universities, as well as public and private secondary schools in
South Florida, offer a full schedule of athletic events throughout the year. The
Panthers also compete for attendance and advertising revenue with a wide range
of other entertainment and recreational activities available in South Florida.
Additionally, subject to the terms of the NHL Collective Bargaining Agreement
and other agreements between the NHL and other entities, the Panthers compete
with other NHL and non-NHL teams, professional and otherwise, for available
players.
CONTROL BY H. WAYNE HUIZENGA.
We have two classes of common stock, Class A common stock and Class B
common stock. On each matter submitted for stockholder approval each share of
Class A common stock is entitled to one vote, and each share of Class B common
stock is entitled to 10,000 votes. We have issued all of the shares of Class B
common stock to Mr. Huizenga, assuring that he will have voting control of our
company, in order to satisfy certain NHL control requirements. As of March 31,
1999, Mr. Huizenga beneficially owned voting stock of our company with the power
to vote approximately 98.8% of the total votes entitled to be cast on any matter
submitted to a vote of stockholders. Mr. Huizenga may not sell his controlling
interest in our company unless the NHL approves the sale. As the sole owner of
Class B common stock, Mr. Huizenga has the ability to indirectly control our
management and policies as well as the outcome of substantially all
non-extraordinary matters submitted to the stockholders for approval, including
the election of directors.
Nothing in our charter or bylaws restricts the transfer of Class B common
stock. As a result, Mr. Huizenga may sell his controlling interest, subject to
the NHL approval, without the approval of the holders of Class A common stock.
However, if Mr. Huizenga were to sell his controlling interest, then certain
change-of-control provisions of the Indenture may apply. Also, Mr. Huizenga may
receive a substantial premium price for selling his controlling interest in our
company.
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WE DEPEND ON OUR KEY PERSONNEL.
For the foreseeable future, we will be materially dependent on the services
of Mr. Huizenga. The loss of Mr. Huizenga's services could have a material
adverse effect on our business. We do not carry key man life insurance on Mr.
Huizenga or any of our officers or directors.
OUR RESORT BUSINESS IS SEASONAL.
Our resort operations are generally seasonal. Our resorts historically
experience greater revenue, costs and profits in the second and third quarters
of the fiscal year ended June 30 due to increased occupancy and room rates
during the winter months. On a pro forma basis for acquisitions, approximately
70% of our annual revenue was historically generated during these quarters.
WE MAY NEED TO MAKE SUBSTANTIAL CAPITAL EXPENDITURES IN ORDER TO COMPLY WITH THE
AMERICANS WITH DISABILITIES ACT.
Our resorts and other properties are subject to the requirements of the
Americans with Disabilities Act (the "ADA"), which generally requires that
public accommodations be made accessible to disabled persons. We believe that
our resorts and other properties are in substantial compliance with the ADA and
that we will not be required to make substantial capital expenditures to address
the requirements of the ADA. However, compliance with the ADA could require
removal of access barriers and noncompliance could result in the imposition of
fines by the federal government or the award of damages to private litigants. If
we were required to make substantial alterations in one or more of the resorts
or our other properties in order to comply with the ADA, our financial condition
and results of operations could be adversely affected.
WE MAY BECOME SUBJECT TO LIABILITIES UNDER ENVIRONMENTAL LAWS.
Our operating costs may be affected by the obligation to pay for the cost
of complying with existing environmental laws, ordinances and regulations,
including the cleanup of contamination, as well as the cost of complying with
future legislation. In connection with our acquisition of the resorts and our
other properties, we have obtained Phase I, and in some instances Phase II,
environmental site assessments in order to evaluate potential environmental
liabilities at these properties. Although these assessments have identified
certain matters that will require us to incur costs to remedy, based on current
information, none of these matters appears likely to have a material adverse
effect on our business, assets, results of operations or liquidity. However,
because these assessments cannot give full and complete knowledge of
environmental liability and compliance matters, we cannot assure you that the
costs of complying with environmental laws and of defending against claims of
liability arising under environmental laws will not have a material adverse
effect on our financial condition and results of operations. See
"Business -- Environmental Matters."
OUR INSURANCE MAY NOT BE ADEQUATE.
We maintain comprehensive insurance on our resorts, including liability,
business interruption, fire and extended coverage, in the types and amounts we
believe are customary in the resort and hotel industry. We use our discretion in
determining amounts, coverage limits and deductibility provisions of insurance,
with a view to obtaining appropriate insurance on the resorts at a reasonable
cost and on suitable terms. Nevertheless, in some circumstances our insurance
coverage may not be sufficient to pay the full current market value or current
replacement value of a lost investment, and the insurance proceeds we receive
may not be adequate to restore our economic position with respect to the
resorts. Furthermore, certain losses may be uninsurable or not economically
insurable.
The Panthers maintain disability insurance for certain highly compensated
players, which insurance provides for up to 80% salary reimbursement after a
player misses 30 consecutive regular season games due to injury. In the event an
injured player is not insured, or disability insurance does not cover the entire
amount of the injured player's salary, we may be obligated to pay all or a
portion of the injured player's salary.
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WE MAY FACE A VARIETY OF RISKS IF WE ENTER INTO BUSINESS ACQUISITIONS, JOINT
VENTURES AND/OR DIVESTITURES IN THE FUTURE.
We have achieved much of our growth through acquisitions. Our growth
strategy may lead us to pursue additional acquisitions of resort-related,
sports-related or other types of businesses. In addition, we may pursue joint
ventures and/or divestitures in the future. Our success will depend upon our
ability to identify and finance attractive alternative business acquisitions,
ventures and/or divestitures. The risks related to acquisitions, joint ventures
and/or divestitures include:
- potential diversion of management;
- unanticipated liabilities or contingencies from acquired businesses or
ventures;
- environmental and other regulatory costs;
- suitability of a joint venture partner;
- reduced earnings due to increased goodwill amortization, increased
interest costs and costs related to integration of acquisitions;
- integrating the businesses that we acquire;
- need to manage growth of acquired businesses or joint ventures; and
- potential corporate reorganization and reallocation of resources due to
divestitures.
WE FACE POTENTIAL LIABILITIES AND RESTRICTIONS ON OWNERSHIP AS A RESULT OF OUR
NATIONAL HOCKEY LEAGUE MEMBERSHIP.
The Panthers are generally jointly and severally liable with the other
members of the NHL for the debts and obligations of the National Hockey League.
If another member of the NHL does not pay its pro rata share of any debt or
obligation, the Panthers would be obligated to pay a pro rata share of such debt
or obligation, after all other individual team remedies are exhausted, including
the sale of a member team.
The NHL constitution and bylaws require a person or a group of persons
holding a 5.0% or more interest in our Company to obtain the prior approval of
the NHL. The NHL may withhold its approval in its sole discretion.
WE HAVE NOT YET ACHIEVED YEAR 2000 COMPLIANCE.
We have completed an assessment relative to the modification or replacement
of portions of our software so that our computer systems will function properly
with respect to dates in the year 2000 and thereafter. We are also in the
process of identifying and reviewing our non-information technology systems with
respect to Year 2000 ("Y2K") issues. In addition, we have begun to communicate
with third parties in order to determine the extent to which our interface
systems are vulnerable to those third parties' failure to remediate their own
Y2K issues. As of December 31, 1998, we had spent approximately $100,000 on Y2K
issues. Our Y2K project is scheduled to be completed by June 30, 1999, and the
total cost is expected not to exceed $500,000. However, we can provide no
assurance that the total cost will not exceed $500,000.
We also believe that, once we remediate our business software applications,
as well as other equipment with embedded technology, the Y2K issue will not
present a materially adverse risk to our future consolidated results of
operations, liquidity and capital resources. However, if such remediation is not
completed in a timely manner or the level of timely compliance by key suppliers
or vendors is not sufficient, the Y2K issue could have a material adverse impact
on our operations including, but not limited to, delays in delivery of products
from third party vendors, increased operating costs, loss of customers or
suppliers, or other significant disruptions to our business. We have in place
comprehensive contingency and business continuation plans.
WE COULD INCUR SUBSTANTIAL LIABILITIES IF CERTAIN LITIGATION IS RESOLVED
UNFAVORABLY.
We are currently party to certain shareholder derivative and purported
class action litigation, which if concluded adversely to our interests could
have a material adverse effect on our financial condition or results of
operations. See "Business -- Legal Proceedings."
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USE OF PROCEEDS
The net proceeds from the sale of the Old Notes in the Private Debt
Offering were approximately $329.2 million, after deducting placement fees and
other offering expenses. We will not receive any proceeds from the Exchange
Offer. The net proceeds from the sale of the Old Notes in the Private Debt
Offering were used to repay our short-term indebtedness and part of our
long-term indebtedness. See "Description of Certain Indebtedness" for
information on the indebtedness repaid, as well as information on our New Credit
Facility.
THE EXCHANGE OFFER
THE EXCHANGE OFFER; PERIOD FOR TENDERING OLD NOTES
Upon the terms and subject to the conditions set forth in this Prospectus
and in the accompanying Letter of Transmittal (which together constitute the
Exchange Offer), we will accept for exchange Old Notes which are properly
tendered on or prior to the Expiration Date and not withdrawn as permitted
below. As used herein, the term "Expiration Date" means 5:00 p.m., New York City
time, on June , 1999; provided, however, that if we, in our sole discretion,
have extended the period of time for which the Exchange Offer is open, the term
"Expiration Date" means the latest time and date to which the Exchange Offer is
extended.
As of the date of this Prospectus, $340.0 million aggregate principal
amount at maturity of the Old Notes is outstanding. This Prospectus, together
with the Letter of Transmittal, is first being sent on or about May , 1999, to
all holders of Old Notes known to us. Our obligation to accept Old Notes for
exchange pursuant to the Exchange Offer is subject to certain conditions set
forth under "-- Conditions of the Exchange Offer" below.
We expressly reserve the right, at any time or from time to time, to extend
the period of time during which the Exchange Offer is open, and thereby delay
acceptance for exchange of any Old Notes, by giving oral or written notice of
such extension to the Holders thereof as described below. During any such
extension, all Old Notes previously tendered will remain subject to the Exchange
Offer and may be accepted for exchange by the Company. Any Old Notes not
accepted for exchange for any reason will be returned without expense to the
tendering holder as promptly as practicable after the expiration or termination
of the Exchange Offer.
Old Notes tendered in the Exchange Offer must be in denominations of
principal amount at maturity of $1,000 and any integral multiple thereof.
We expressly reserve the right to amend or terminate the Exchange Offer,
and not to accept for exchange any Old Notes not theretofore accepted for
exchange, upon the occurrence of any of the conditions of the Exchange Offer
specified below under "-- Conditions of the Exchange Offer." We will give
written or oral notice of any extension, amendment, non-acceptance or
termination to the holders of the Old Notes as promptly as practicable, such
notice in the case of any extension to be issued by means of a press release or
other public announcement no later than 9:00 a.m., New York City time, on the
next business day after the previously scheduled Expiration Date.
RESALE OF NEW NOTES
Based on an interpretation by the staff of the Commission set forth in
no-action letters issued to third parties, including "Shearman & Sterling"
(available July 2, 1993), "K-III Communications Corporation" (available May 14,
1993), "Morgan Stanley & Co. Incorporated" (available June 5, 1991), "Mary Kay
Cosmetics, Inc." (available June 5, 1991), "Warnaco, Inc." (available October
11, 1991) and "Exxon Capital Holdings Corporation" (available May 13, 1988), the
Company believes that, except as described below, the New Notes issued pursuant
to the Exchange Offer in exchange for Old Notes may be offered for resale,
resold and otherwise transferred by any Holder of such Notes (other than any
such Holder which is a broker-dealer or an "affiliate" of the Company or the
Guarantors within the meaning of Rule 405 under the Securities Act) without
compliance with the registration and prospectus delivery provisions of the
Securities Act, provided that, (i) such New Notes are acquired in the ordinary
course of such holder's business, (ii) such holder has no arrangement or
understanding with any person to participate in the distribution of such New
Notes, and
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(iii) such holder is not engaged in, and does not intend to engage in, a
distribution of such New Notes. We do not intend to request the Commission to
consider, and the Commission has not considered, the Exchange Offer in the
context of a no-action letter and there can be no assurance that the staff of
the Commission would make a similar determination with respect to the Exchange
Offer as it has in such other circumstances. By tendering Old Notes for New
Notes, each holder will represent to us, that (i) the New Notes acquired
pursuant to the Exchange Offer are being acquired in the ordinary course of
business of the person receiving such New Notes, whether or not such person is
the holder, (ii) neither the holder nor any such other person is engaging in or
intends to engage in a distribution of such New Notes and if such holder is not
a broker-dealer, neither the holder nor any such other person has an arrangement
or understanding with any person to participate in the distribution of such New
Notes within the meaning of the Securities Act and (iii) neither the holder nor
any such person is an affiliate of us or the Guarantors as defined in Rule 405
under the Securities Act. In the event that any holder of Old Notes cannot make
the requisite representations to us, such holder cannot rely on such
interpretation by the staff of the Commission and must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with a secondary resale transaction. Unless an exemption from
registration is otherwise available, any such resale transaction should be
covered by an effective registration statement containing the selling security
holders information required by Item 507 of Regulation S-K under the Securities
Act. This Prospectus may be used for an offer to resell, resale or other
transfer of New Notes only as specifically set forth herein.
Each broker-dealer that receives New Notes for its own account in exchange
for Old Notes, where such Old Notes were acquired by such broker-dealer as a
result of market-making activities or other trading activities, must acknowledge
that it will deliver a prospectus in connection with any resale of such New
Notes, and that it has not entered into any arrangements or understanding with
us or any of our affiliates to distribute New Notes in connection with any
resale of such New Notes. See "Plan of Distribution." The Letter of Transmittal
states that by so acknowledging and delivering such a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act.
INTEREST ON THE NEW NOTES
The New Notes will bear interest at 9 7/8% per annum. Interest on the New
Notes will be payable semi-annually, in arrears, on April 15 and October 15 of
each year, commencing on October 15, 1999. holders of New Notes will receive
interest on October 15, 1999 from the date of initial issuance of the New Notes,
plus an amount equal to the accrued interest on the Old Notes from the most
recent date to which interest has been paid to the date of exchange thereof for
New Notes. Interest on the Old Notes accepted for exchange will cease to accrue
upon issuance of the New Notes.
PROCEDURES FOR TENDERING OLD NOTES
The tender of Old Notes by a holder thereof as set forth below and the
acceptance thereof by us will constitute a binding agreement between the
tendering holder and us upon the terms and subject to the conditions set forth
in this Prospectus and in the accompanying Letter of Transmittal. Except as set
forth below, a holder who wishes to tender Old Notes for exchange pursuant to
the Exchange Offer must transmit a properly completed and duly executed Letter
of Transmittal, including all other documents required by such Letter of
Transmittal or (in the case of a book-entry transfer) an Agent's Message (as
defined) in lieu of such letter of Transmittal, to The Bank of New York (the
"Exchange Agent") at the address set forth below under "Exchange Agent" on or
prior to the Expiration Date. In addition, either (i) certificates for such Old
Notes must be received by the Exchange Agent along with the Letter of
Transmittal, or (ii) a timely confirmation of a book-entry transfer (a
"Book-Entry Confirmation") of such Old Notes, if such procedure is available,
into the Exchange Agent's account at the Depository Trust Company (the
"Book-Entry Transfer Facility") pursuant to the procedure for book-entry
transfer described below, must be received by the Exchange Agent prior to the
Expiration Date with the Letter of Transmittal or an Agent's Message in lieu of
such Letter of Transmittal, or (iii) the holder must comply with the guaranteed
delivery procedures described below. "Agent's Message" means a message,
transmitted by the Book-Entry Transfer Facility to and received by the Exchange
Agent and forming a part of a Book-Entry Confirmation, which states that the
Book-Entry Transfer
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Facility has received an express from the tendering participant, which
acknowledgment states that such participant has received and agrees to be bound
by the Letter of Transmittal and that we may enforce such Letter of Transmittal
against such participant. THE METHOD OF DELIVERY OF OLD NOTES, LETTER OF
TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF THE
HOLDERS. IF SUCH DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT REGISTERED MAIL,
PROPERLY INSURED, WITH RETURN RECEIPT REQUESTED, BE USED. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY. NO LETTERS OF
TRANSMITTAL OR OLD NOTES SHOULD BE SENT TO US.
Signatures on a Letter of Transmittal or a notice of withdrawal, as the
case may be, must be guaranteed unless the Old Notes surrendered for exchange
pursuant thereto are tendered (i) by a registered holder of the Old Notes who
has not completed the box entitled "Special Issuance Instructions" or "Special
Delivery Instructions" on the Letter of Transmittal or (ii) for the account of
an Eligible Institution (as defined). In the event that signatures on a Letter
of Transmittal or a notice of withdrawal as the case may be, are required to be
guaranteed, such guarantees must be by a firm which is a member of the National
Association of Securities Dealers, Inc., by a commercial bank or trust company
having an office or correspondent in the United States or by an "eligible
guarantor institution" within the meaning of Rule 17Ad-15 under the Exchange Act
(collectively, "Eligible Institutions"). If Old Notes are registered in the name
of a person other than a signer of the Letter of Transmittal, the Old Notes
surrendered for exchange must be endorsed by, or accompanied by a written
instrument or instruments of transfer or exchange, in satisfactory form as
determined by us in our sole discretion, duly executed by the registered holder
with the signature thereon guaranteed by an Eligible Institution.
All questions as to the validity, form, eligibility (including time of
receipt) and acceptance of Old Notes tendered for exchange will be determined by
us in our sole discretion, which determination shall be final and binding. We
reserve the absolute right to reject any and all tenders of any particular Old
Note not properly tendered or not accept any particular Old Note which
acceptance might, in our judgment or the judgment of our counsel, be unlawful.
We also reserve the absolute right to waive any defects or irregularities or
conditions of the Exchange Offer as to any particular Old Note either before or
after the Expiration Date (including the right to waive the ineligibility of any
holder who seeks to tender Old Notes in the Exchange Offer). The interpretation
of the terms and conditions of the Exchange Offer as to any particular Old Note
either before or after the Expiration Date (including the Letter of Transmittal
and the instructions thereto) by us shall be final and binding on all parties.
Unless waived, any defects or irregularities in connection with the tenders of
Old Notes for exchange must be cured within such reasonable period of time as we
shall determine. Neither we nor the Exchange Agent nor any other person shall be
under any duty to give notification of any defect or irregularity with respect
to any tender of Old Notes for exchange, nor shall any of them incur any
liability for failure to give such notification.
If the Letter of Transmittal is signed by a person or persons other than
the registered holder or holders of Old Notes, such Old Notes must be endorsed
or accompanied by powers of attorney, in either case signed by the registered
holder or holders exactly as the name or names of the registered holder or
holders appear on the Old Notes.
If the Letter of Transmittal or any Old Notes or powers of attorney are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and, unless waived by
us, proper evidence satisfactory to us of their authority to so act must be
submitted with the Letter of Transmittal.
ACCEPTANCE OF OLD NOTES FOR EXCHANGE; DELIVERY OF NEW NOTES
Upon satisfaction or waiver of all of the conditions to the Exchange Offer,
we will accept, promptly after the Expiration Date, all Old Notes properly
tendered and will issue the New Notes promptly after acceptance of the Old
Notes. See "-- Conditions of the Exchange Offer" below. For purposes of the
Exchange Offer, we shall be deemed to have accepted properly tendered Old Notes
for exchange when, as and if we have given
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oral or written notice thereof to the Exchange Agent, with written confirmation
of any oral notice to be given promptly thereafter.
For each Old Note accepted for exchange, the holder of such Old Note will
receive a New Note having a principal amount at maturity equal to that of the
surrendered Old Note.
In all cases, issuance of New Notes for Old Notes that are accepted for
exchange pursuant to the Exchange Offer will be made only after timely receipt
by the Exchange Agent of (i) certificates for such Old Notes or a timely
Book-Entry Confirmation of such Old Notes into the Exchange Agent's account at
the Book-Entry Transfer Facility, (ii) a properly completed and duly executed
Letter of Transmittal or an Agent's Message in lieu thereof and (iii) all other
required documents. If any tendered Old Notes are not accepted for any reason
set forth in the terms and conditions of the Exchange Offer or if Old Notes are
submitted for a greater principal amount than the holder wishes to exchange,
such unaccepted or non-exchange Old Notes will be returned without expense to
the tendering Holder thereof (or, in the case of Old Notes tendered by
book-entry transfer into the Exchange Agent's account at the Book-Entry Transfer
Facility pursuant to the book-entry procedures described below, such
non-exchanged Old Notes will be credited to an account maintained with such
Book-Entry Transfer Facility) as promptly as practicable after the expiration or
termination of the Exchange Offer.
BOOK-ENTRY TRANSFER
The Exchange Agent will make a request to establish an account with respect
to the Old Notes at the Book-Entry Transfer Facility for purposes of the
Exchange Offer promptly after the date of this Prospectus. Any financial
institution that is a participant in the Book-Entry Transfer Facility's systems
may make book-entry delivery of Old Notes by causing the Book-Entry Transfer
Facility to transfer such Old Notes into the Exchange Agent's account at the
Book-Entry Transfer Facility in accordance with such Book-Entry Transfer
Facility's procedures for transfer. Such participant using the Book-Entry
Transfer Facility's procedures for transfer should transmit its acceptance to
the Book-Entry Transfer Facility on or prior to the Expiration Date or comply
with the guaranteed delivery procedures described below. The Book-Entry Transfer
Facility will verify such acceptance, execute a book-entry transfer of the
tendered Old Notes into the Exchange Agent's account at the Book-Entry Transfer
Facility and then send to the Exchange Agent confirmation of such book-entry
transfer, including the Agent's Message confirming that the Book-Entry Transfer
Facility has received an express acknowledgment from such participant that such
participant has received and agrees to be bound by the Letter of Transmittal and
that the Company may enforce the Letter of Transmittal against such participant.
However, although delivery of Old Notes may be effected through book-entry
transfer at the Book-Entry Transfer facility, an Agent's Message and any other
required documents, must, in any case, be transmitted to and received by the
Exchange Agent at the address set forth below under "-- Exchange Agent" on or
prior to the Expiration Date or there must be compliance with the guaranteed
delivery procedures described below.
GUARANTEED DELIVERY PROCEDURES
If a holder of Old Notes desires to tender such Old Notes and the Old Notes
are not immediately available, or time will not permit such holder's Old Notes
or other required documents to reach the Exchange Agent before the Expiration
Date, or the procedure for book-entry transfer cannot be completed on a timely
basis, a tender may be effected if (i) the tender is made through an Eligible
Institution, (ii) prior to the Expiration Date, the Exchange Agent received from
such Eligible Institution a Notice of Guaranteed Delivery, substantially in the
form provided by the Company (by telegram, telex, facsimile transmission, mail
or hand delivery), setting forth the name and address of the holder of the Old
Notes and the amount of Old Notes tendered, stating that the tender is being
made thereby and guaranteeing that within three New York Stock Exchange ("NYSE")
trading days after the date of the execution of the Notice of Guaranteed
Delivery, the certificates for all physically tendered Old Notes, in proper form
for transfer, or a Book-Entry Confirmation, as the case may be, together with a
properly completed and duly executed appropriate Letter of Transmittal (or
facsimile thereof or Agent's Message in lieu thereof) with any required
signature guarantees and any other documents required by the Letter of
Transmittal will be deposited by the Eligible Institution
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with the Exchange Agent, and (iii) the certificates for all physically tendered
Old Notes, in proper form for transfer, or a Book-Entry Confirmation, as the
case may be, together with a properly completed and duly executed Letter of
Transmittal (or facsimile thereof or Agent's Message in lieu thereof) with any
required signature guarantees and all other documents required by the Letter of
Transmittal, are received by the Exchange Agent within three NYSE trading days
after the date of execution of the Notice of Guaranteed Delivery.
WITHDRAWAL RIGHTS
Tenders of Old Notes may be withdrawn at any time prior to 5:00 p.m., New
York City time, on the Expiration Date.
For a withdrawal to be effective, a written notice of withdrawal must be
received by the Exchange Agent at the address set forth below under "-- Exchange
Agent" prior to 5:00 p.m., New York City time, on the Expiration Date. Any such
notice of withdrawal must (i) specify the name of the person having tendered the
Old Notes to be withdrawn (the "Depositor"), (ii) identify the Old Notes to be
withdrawn (including the certificate number or numbers and principal amount at
maturity of such Old Notes), (iii) contain a statement that such holder is
withdrawing his election to have such Old Notes exchanged, (iv) be signed by the
holder in the same manner as the original signature on the Letter of Transmittal
by which such Old Notes were tendered (including any required signature
guarantees) or be accompanied by documents of transfer to have the trustee with
respect to the Old Notes register the transfer of such Old Notes in the name of
the person withdrawing the tender and (v) specify the name in which such Old
Notes are registered, if different from that of the depositor. If Old Notes have
been tendered pursuant to the procedure for book-entry transfer described above,
any notice of withdrawal must specify the name and number of the account at the
Book-Entry Transfer Facility to be credited with the withdrawn Old Notes and
otherwise comply with the procedures of such facility. All questions as to the
validity, form and eligibility (including time of receipt) of such notices will
be determined by the Company, whose determination shall be final and binding on
all parties. Any Old Notes so withdrawn will be deemed not to have been validly
tendered for exchange for purposes of the Exchange Offer and no New Notes will
be issued with respect thereto unless the Old Notes so withdrawn are validly
retendered. Any Old Notes that have been tendered for exchange but which are not
exchanged for any reason will be returned to the holder thereof without cost to
such Holder (or, in the case of Old Notes tendered by book-entry transfer into
the Exchange Agent's account at the Book-Entry Transfer Facility pursuant to the
book-entry transfer procedures described above, such Old Notes will be credited
to an account maintained with the Book-Entry Transfer Facility for the Old
Notes) as soon as practicable after withdrawal, rejection of tender or
termination of the Exchange Offer. Properly withdrawn Old Notes may retendered
by following the procedures described under "-- Procedures for Tendering Old
Notes" above at any time on or prior to 5:00 p.m., New York City time, on the
Expiration Date.
CONDITIONS OF THE EXCHANGE OFFER
The Exchange Offer is not conditioned upon any minimum principal amount at
maturity of the Old Notes being tendered for exchange. However, notwithstanding
any other provisions of the Exchange Offer, we will not be required to accept
for exchange, or exchange any New Notes for, any Old Notes, and may terminate
the Exchange Offer as provided herein before the acceptance of any Old Notes for
exchange, if:
(a) any action or proceeding is instituted or threatened in any court or by
or before any governmental agency with respect to the Exchange Offer which, in
our sole judgment, might materially impair our ability to proceed with the
Exchange Offer;
(b) any law, statute, rule or regulation is proposed, adopted or enacted,
or any existing law, statue, rule or regulation is interpreted by the staff of
the Commission, which, in the Company's sole judgment, might materially impair
our ability to proceed with the Exchange Offer; or
(c) any governmental approval has not been obtained, which approval we
shall, in our sole discretion, deem necessary for the consummation of the
Exchange Offer as contemplated hereby.
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If we determine in our sole discretion that any of these conditions are not
satisfied, we may (i) refuse to accept any Old Notes and return all tendered Old
Notes to the tendering holders, (ii) extend the Exchange Offer and retain all
Old Notes tendered prior to the expiration of the Exchange Offer, subject,
however, to the rights of holders who tendered such Old Notes to withdraw their
tendered Old Notes, or (iii) waive such unsatisfied conditions with respect to
the Exchange Offer and accept all properly tendered Old Notes which have not
been withdrawn.
The foregoing conditions are for our sole benefit and may be asserted by us
regardless of the circumstances giving rise to any such condition or may be
waived by us in whole or in part at any time and from time to time in its sole
discretion. The failure by us at any time to exercise any of the foregoing
rights shall not be deemed a waiver or any such right, and each such right shall
be deemed an ongoing right which may be asserted at any time and from time to
time.
In addition, we will not accept for exchange any Old Notes tendered, and no
New Notes will be issued in exchange for any such Old Notes, if at such time any
stop order shall be threatened or in effect with respect to the Registration
Statement of which this Prospectus constitutes a part or the qualification of
the Indenture under the Trust Indenture Act of 1939, as amended.
EXCHANGE AGENT
The Bank of New York has been appointed as the Exchange Agent for the
Exchange Offer. All executed Letters of Transmittal should be directed to the
Exchange Agent at the address set forth below. Questions and requests for
assistance, requests for additional copies of this Prospectus or of the Letter
of Transmittal and requests for Notices of Guaranteed Delivery should be
directed to the Exchange Agent addressed as follows:
<TABLE>
<S> <C>
BY MAIL: BY HAND OR OVERNIGHT COURIER:
The Bank of New York The Bank of New York
Corporate Trust Corporate Trust Services Window
101 Barclay Street -- 7E 101 Barclay Street
New York, New York 10286 New York, New York 10286
Attention: Theresa Gass Attention: Theresa Gass
Reorganization Section Reorganization Section
FACSIMILE TRANSMISSION: CONFIRMED BY TELEPHONE:
212-815-4699 212-815-5942
</TABLE>
DELIVERY OF THE LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH
ABOVE DOES NOT CONSTITUTE A VALID DELIVERY OF SUCH LETTER OF TRANSMITTAL.
FEES AND EXPENSES
We will not make any payment to brokers, dealers or others soliciting
acceptances of the Exchange Offer. We, however, will pay the Exchange Agent
reasonable and customary fees for its services and will reimburse it for its
reasonable out-of-pocket expenses in connection therewith.
The cash expenses to be incurred by us in connection with our performance
and completion of the Exchange Offer will be paid us. Such expenses include fees
and expenses of the Exchange Agent and Trustee, accounting and legal fees and
printing costs, among others.
TRANSFER TAXES
Holders who tender their Old Notes for exchange will not be obligated to
pay any transfer taxes in connection therewith. If, however, certificates
representing New Notes or Old Notes for principal amounts not
30
<PAGE> 37
tendered or accepted for exchange are to be delivered to, or are to be
registered or issued in the name of, any person other than the registered holder
of the Old Notes tendered hereby, or if tendered Old Notes are registered in the
name of any person other than the person signing this Letter of Transmittal, or
if a transfer tax is imposed for any reason other than the exchange of Old Notes
pursuant to the Exchange Offer, then the amount of any such transfer taxes
(whether imposed on the registered holder or on any other persons) will be
payable by the tendering holder.
CONSEQUENCES OF FAILURE TO EXCHANGE
Holders of Old Notes who do not exchange their Old Notes for New Notes
pursuant to the Exchange Offer will continue to be subject to the provisions in
the Indenture regarding transfer and exchange of the Old Notes and the
restrictions on transfer of such Old Notes as set forth in the legend thereon as
a consequence of the issuance of the Old Notes pursuant to exemptions from, or
in transactions not subject to, the registration requirements of the Securities
Act and applicable state securities laws. Accordingly, such Old Notes may be
resold only (i) to the Company (upon redemption thereof or otherwise), (ii)
pursuant to an effective registration statement under the Securities Act, (iii)
so long as the old Notes are eligible for resale pursuant to Rule 144A, to a
qualified institutional buyer within the meaning of Rule 144A under the
Securities Act in a transaction meeting the requirements of Rule 144A, or (iv)
pursuant to another available exemption from the registration requirements of
the Securities Act, in each case in accordance with any applicable securities
laws of any state of the United States. We do not currently anticipate that it
will register under the Securities Act the resale of any Old Notes that remain
outstanding after consummation of the Exchange Offer (subject to limited
exceptions, if applicable).
Holders of the Old and New Notes which remain outstanding after
consummation of the Exchange Offer will vote together as a single class for
purposes of determining whether holders of the requisite percentage thereof have
taken certain actions or exercised certain rights under the Indenture.
Upon consummation of the Exchange Offer, holders of Old Notes will not be
entitled to any further registration rights under the Registration Rights
Agreement, except under limited circumstances. See "Exchange Offer; Registration
Rights."
ACCOUNTING TREATMENT
The New Notes will be recorded at the same carrying value as the Old Notes
as reflected in our accounting records on the date of the exchange. Accordingly,
no gain or loss for accounting purposes will be recognized by us.
31
<PAGE> 38
CAPITALIZATION
The following table sets forth at December 31, 1998 (1) our actual
capitalization, and (2) our as adjusted capitalization, which gives effect to
our private placement of Class A common stock which closed on February 18, 1999,
our rights offering of Class A common stock which closed on April 6, 1999, the
initial borrowings under our New Credit Facility, the Private Debt Offering and
the application of the net proceeds from these financings. This table should be
read in conjunction with the Consolidated Financial Statements and notes thereto
and the Unaudited Condensed Consolidated Pro Forma Financial Statements and
notes thereto included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
DECEMBER 31, 1998
------------------------
ACTUAL AS ADJUSTED
---------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Cash and cash equivalents................................... $ 12,884 $ 12,884
========== ==========
Restricted cash(1).......................................... $ 24,790 $ 24,790
========== ==========
Debt (including short-term and long-term)(2):
Interim loan payable to bank.............................. $ 219,940 $ --
Boca Raton Resort mortgage................................ 108,500 108,500
Arizona Biltmore loan..................................... 99,750 --
Arizona Biltmore mortgage................................. 62,097 62,097
Arizona Biltmore earnout note............................. 45,287 28,620
Hockey revolving credit facility.......................... 35,000 --(3)
Pier 66 mortgage.......................................... 25,952 --
Unsecured line-of-credit.................................. 10,000 --
Arizona Biltmore seller note.............................. 500 500
New Credit Facility....................................... -- 24,851(3)
9 7/8% Senior Subordinated Notes.......................... -- 340,000
---------- ----------
Total debt.................................................. 607,026 564,568
Total shareholders' equity.................................. 419,471 475,696
---------- ----------
Total capitalization........................................ $1,026,497 $1,040,264
========== ==========
</TABLE>
- -------------------------
(1) Consists primarily of escrow amounts maintained in accordance with the terms
of the Boca Raton Resort mortgage and cash collected by us in our capacity
as operator of the National Car Rental Center.
(2) See "Description of Certain Indebtedness" for information on our
indebtedness, including indebtedness repaid in connection with the Private
Debt Offering.
(3) Total availability under the Hockey revolving credit facility and the New
Credit Facility at December 31, 1998, as adjusted, is $35.0 million and
$146.0 million, respectively. Total undrawn funds on these revolving credit
facilities after giving effect to the application of net proceeds from these
financings is approximately $156.1 million.
32
<PAGE> 39
SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA, OPERATING MARGINS AND RATIOS)
The following table presents selected consolidated statement of operations,
other operating data and balance sheet data of our company for the periods and
the dates indicated. The selected statement of operations and other operating
data for each of the fiscal years 1994, 1995, 1996, 1997 and 1998 and the
selected balance sheet data at June 30, 1994, 1995, 1996, 1997 and 1998
presented below were derived from our consolidated financial statements and
notes thereto, which have been audited by Arthur Andersen LLP, independent
certified public accountants. The selected statement of operations and other
operating data for the six months ended December 31, 1997 and 1998 and the
selected balance sheet data at December 31, 1998 were derived from unaudited
interim condensed consolidated financial statements and notes thereto and are
included elsewhere in this Prospectus. The unaudited interim condensed
consolidated financial statements of our company include all adjustments
(consisting only of normal recurring adjustments) which in the opinion of our
management are necessary for a fair presentation of our financial position and
results of operations for these periods. Historical operating results for the
six months ended December 31, 1997 and 1998 are not necessarily indicative of
the results that may be expected for a full year.
<TABLE>
<CAPTION>
SIX MONTHS ENDED
FISCAL YEAR ENDED JUNE 30, DECEMBER 31,
---------------------------------------------------- -------------------
1994 1995 1996 1997 1998 1997 1998
-------- -------- -------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS:
Revenue:
Leisure and recreation............................. $ -- $ -- $ -- $ 17,567 $252,603 $ 88,380 $128,872
Entertainment and sports........................... 21,682 17,746 34,087 36,695 43,586 21,149 28,455
-------- -------- -------- -------- -------- -------- --------
Total revenue.................................... 21,682 17,746 34,087 54,262 296,189 109,529 157,327
Operating expenses:
Cost of leisure and recreation services............ -- -- -- 6,658 110,084 43,468 63,042
Cost of entertainment and sports services.......... 20,189 17,210 35,958 35,135 45,919 21,577 22,161
Selling, general and administrative expenses....... 5,512 5,569 8,371 15,150 91,579 40,364 46,226
Depreciation and amortization...................... 6,444 6,266 9,815 5,698 23,155 8,915 15,031
-------- -------- -------- -------- -------- -------- --------
Total operating expenses..................... 32,145 29,045 54,144 62,641 270,737 114,324 146,460
Operating income (loss).............................. (10,463) (11,299) (20,057) (8,379) 25,452 (4,795) 10,867
Interest and other income............................ 65 38 122 1,923 2,307 1,318 1,470
Interest and other expense........................... (2,528) (3,741) (5,030) (3,364) (24,673) (6,663) (23,217)
Minority interest.................................... -- (384) (174) (440) (1,813) (856) (180)
-------- -------- -------- -------- -------- -------- --------
Net income (loss).................................... $(12,926) $(15,386) $(25,139) $(10,260) $ 1,273 $(10,996) $(11,060)
======== ======== ======== ======== ======== ======== ========
OTHER DATA:
Net cash flow from operating, investing and financing
activities(1)...................................... $ (7,631) $ (210) $ (772) $ 13,244 $ 23,519 $ (842) $(24,344)
EBITDA:
Leisure and recreation............................. -- -- -- 5,512 72,478 14,184 29,922
Entertainment and sports........................... (3,954) (4,995) (10,120) (6,040) (12,092) (5,161) 1,471
Corporate.......................................... -- -- -- (230) (9,472) (3,585) (4,025)
-------- -------- -------- -------- -------- -------- --------
Total EBITDA(2).................................. (3,954) (4,995) (10,120) (758) 50,914 5,438 27,368
Net membership fees deferred during the period(3).... -- -- -- -- 5,814 -- 3,723
-------- -------- -------- -------- -------- -------- --------
Adjusted EBITDA(4)................................... $ (3,954) $ (4,995) $(10,120) $ (758) $ 56,728 $ 5,438 $ 31,091
======== ======== ======== ======== ======== ======== ========
EBITDA margin(5)..................................... -- -- -- -- 17% 5% 17%
Adjusted EBITDA margin(6)............................ -- -- -- -- 19% 5% 19%
Capital expenditures................................. $ 1,275 $ 161 $ 140 $ 1,494 $ 47,806 $ 30,518 $ 61,781
Cash interest expense(7)............................. 2,528 3,741 5,030 3,364 23,660 6,663 22,968
Ratio of earnings to fixed charges(8)................ -- -- -- -- 1.0x -- 0.6x
</TABLE>
<TABLE>
<CAPTION>
AT JUNE 30, AT DECEMBER 31,
------------------------------------------------------ ---------------
1994 1995 1996 1997 1998 1998
-------- -------- -------- -------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents.............................. $ 1,447 $ 1,237 $ 465 $ 13,709 $ 37,228 $ 12,884
Restricted cash........................................ -- -- -- 30,110 29,296 24,790
Total current assets................................... 2,996 3,408 3,756 70,590 111,182 96,053
Total assets........................................... 49,019 53,587 47,760 600,392 1,128,207 1,214,627
Total current liabilities.............................. 17,712 50,292 67,786 46,375 403,096 462,436
Total debt............................................. 50,249 67,226 85,172 186,056 540,626 607,026
Non-current obligations................................ 45,169 25,643 28,277 251,003 292,708 330,763
Total shareholders' equity (deficit)................... (13,862) (22,348) (48,303) 301,153 430,511 419,471
</TABLE>
33
<PAGE> 40
- ---------------
(1) The details of the cash flows from these items are presented in the
Consolidated Statements of Cash Flows included elsewhere in this Prospectus.
(2) EBITDA represents earnings before interest expense, income taxes,
depreciation, amortization and minority interest. Our management and certain
investors use EBITDA and Adjusted EBITDA (see below) as indicators of our
historical ability to service debt, to sustain potential future increases in
debt and to satisfy capital requirements. However, neither EBITDA nor
Adjusted EBITDA is intended to represent cash flows for the period. In
addition, they have not been presented as alternatives to either (i)
operating income (as determined by generally accepted accounting principles,
or GAAP) as an indicator of operating performance or (ii) cash flows from
operating, investing and financing activities (as determined by GAAP) and is
thus susceptible to varying calculations. EBITDA and Adjusted EBITDA as
presented may not be comparable to other similarly titled measures of other
companies.
(3) Represents the annual change in deferred revenue from the Premier Club at
the Boca Raton Resort and Club. The Premier Club currently requires a
non-refundable initial membership fee of $45,000 and annual social dues
starting at $2,300 net of expenses related to the Premier Club. We offer
internal financing of the initial membership fee to our customers.
Accordingly, the net membership fees deferred during the period include cash
as well as financed membership sales. Members of the Premier Club have
access to the Boca Raton Resort and Club grounds and recreational
facilities, which are otherwise restricted to resort guests. Initial
membership fees are recorded as revenues over the estimated life of the
membership. Unrecognized portions of the initial membership fees are
reflected as deferred revenue on the Consolidated Balance Sheets.
(4) Adjusted EBITDA represents EBITDA plus the amount of net membership fees
deferred during the period.
(5) EBITDA margin is defined as EBITDA divided by total revenue.
(6) Adjusted EBITDA margin is defined as adjusted EBITDA divided by the sum of
total revenue plus net membership fees deferred during the period.
(7) Cash interest expense is defined as interest expense less amortization of
financing costs and imputed interest on certain obligations with no stated
interest rate plus capitalized interest expense.
(8) The ratio of earnings to fixed charges has been computed based on our net
income (loss) plus fixed charges divided by fixed charges. Fixed charges
include interest expense and capitalized interest. The deficiency in the
ratio of earnings to fixed charges on a historical basis was primarily due
to losses of the Panthers. We did not acquire our first resort property
until March 1997. For the fiscal years ended June 30, 1994, 1995, 1996 and
1997, earnings were insufficient to cover fixed charges by $10.4 million,
$11.6 million, $20.1 million and $6.9 million, respectively. For the six
months ended December 31, 1997, earnings were insufficient to cover fixed
charges by $4.3 million.
34
<PAGE> 41
FLORIDA PANTHERS HOLDINGS, INC.
UNAUDITED CONDENSED CONSOLIDATED PRO FORMA
FINANCIAL STATEMENTS
The unaudited condensed consolidated pro forma financial statements
included in this Prospectus reflect adjustments to our historical results of
operations to give effect to the acquisition and financing transactions
discussed below.
FINANCINGS
Common Stock Offering
In August 1997, we issued and sold 6,000,000 shares of Class A common stock
at a price of $19.25 per share, resulting in net proceeds to us of $108.8
million after deducting underwriting fees and other expenses. We refer to this
transaction as the "Common Stock Offering." The application of the net proceeds
of the Common Stock Offering has been reflected in the unaudited condensed
consolidated pro forma statements of operations for the six months ended
December 31, 1997 and the year ended June 30, 1998 as if it had occurred at the
beginning of the periods presented.
Private Placement
In February 1999, we issued and sold 4,022,561 shares of unregistered, but
otherwise unrestricted, Class A common stock in a private placement at a price
of $10.25 per share, resulting in net proceeds to us of $40.2 million after
deducting placement agency fees and other expenses. We refer to this transaction
as the "Private Placement." The application of the net proceeds of the Private
Placement has been reflected in the unaudited condensed pro forma consolidated
statements of operations as if it had occurred at the beginning of the periods
presented and in the consolidated pro forma balance sheet as if it had occurred
on December 31, 1998.
Rights Offering
On April 6, 1999, we consummated our rights offering pursuant to which we
sold 1,575,621 shares of our Class A common stock at $10.25 per share, resulting
in net proceeds of approximately $16.0 million. We refer to this transaction as
the "Rights Offering."
The Private Debt Offering
We sold $340.0 million aggregate principal amount of senior subordinated
notes in the Private Debt Offering. The application of the net proceeds of the
Private Debt Offering has been reflected in the unaudited condensed consolidated
pro forma statements of operations as if it had occurred at the beginning of the
periods presented and in the consolidated pro forma balance sheet as if it had
occurred on December 31, 1998.
New Credit Facility
We entered into our New Credit Facility in the amount of $146.0 million at
the same time as the closing of the Private Debt Offering. The application of
the net proceeds from the initial borrowings of $24.9 million under our New
Credit Facility has been reflected in the unaudited condensed consolidated pro
forma statements of operations as if it had occurred at the beginning of the
periods presented and in the consolidated pro forma balance sheet as if it had
occurred on December 31, 1998.
ACQUISITIONS
The acquisitions of the businesses discussed below have been accounted for
under the purchase method of accounting and are included in the historical
financial statements from the date of acquisition. For pro forma statement of
operations purposes, these acquisitions have been reflected as if they occurred
at the beginning of the period presented, as applicable.
On August 13, 1997, we acquired our initial 68.0% ownership interest (325
of the 474 units) in the Registry Hotel at Pelican Bay for (1) 918,174 shares of
Class A common stock, (2) warrants to purchase 325,000 shares of Class A common
stock (300,000 of which are exercisable at $25.85 per share and 25,000 of
35
<PAGE> 42
which are exercisable at $23.50 per share) and (3) $75.5 million in cash. By
July 1998, we acquired the remaining units of the Registry Hotel at Pelican Bay
for $30.8 million of cash.
On March 2, 1998, we acquired the Arizona Biltmore Hotel in exchange for:
(1) payment of $126.0 million in cash at closing, (2) payment of $99.8 million
in cash in December 1998, (3) payment of $500,000 in cash after April 2001, (4)
warrants to purchase 500,000 shares of Class A common stock exercisable at
$24.00 per share and (5) the assumption of $63.1 million of debt. We agreed to
pay up to an additional $50.0 million to the sellers conditioned upon their
satisfactory execution of certain development plans. The plans were delivered to
us in acceptable form in December 1998. Accordingly, the $50.0 million is
payable at the election of the seller, either in cash or in shares of our Class
A common stock, in three equal annual installments commencing in April 1999. We
paid $16.7 million of such $50.0 million payable in connection with the Private
Debt Offering.
On April 22, 1998, we acquired the Edgewater Beach Hotel for $41.2 million,
$20.7 million of which was paid in cash at closing and $20.5 million of which
was paid in cash in September 1998.
The Unaudited Condensed Consolidated Pro Forma Statements are presented for
illustrative purposes only and are not necessarily indicative of what the actual
financial condition or results of operations of our company would have been had
the transactions or events described above been consummated on such dates. These
pro forma financial statements do not purport to be indicative of our Company's
financial condition or results of operations for any future period.
The following Unaudited Condensed Consolidated Pro Forma Financial
Statements should be read in conjunction with the section headed "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
the historical financial statements included elsewhere in this Prospectus.
36
<PAGE> 43
FLORIDA PANTHERS HOLDINGS, INC.
UNAUDITED CONDENSED CONSOLIDATED PRO FORMA BALANCE SHEET
AS OF DECEMBER 31, 1998
(IN THOUSANDS)
<TABLE>
<CAPTION>
FLORIDA
PANTHERS PROCEEDS PRO FORMA
HOLDINGS, FROM FINANCING AS
INC. TRANSACTIONS ADJUSTED(1)
---------- -------------- -----------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................. $ 12,884 $ -- $ 12,884
Restricted cash........................................... 24,790 -- 24,790
Accounts receivable....................................... 31,821 -- 31,821
Inventory................................................. 7,812 -- 7,812
Current portion of Premier Club notes receivable.......... 3,986 -- 3,986
Other current assets...................................... 14,760 -- 14,760
---------- ---------- ----------
Total current assets................................ 96,053 -- 96,053
Property and equipment, net................................. 1,008,288 -- 1,008,288
Intangible assets, net...................................... 81,027 -- 81,027
Premier Club notes receivable, net of current portion....... 7,714 -- 7,714
Other assets................................................ 21,545 13,767(2) 35,312
---------- ---------- ----------
Total assets........................................ $1,214,627 $ 13,767 $1,228,394
========== ========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses..................... $ 45,387 $ -- $ 45,387
Deferred revenue.......................................... 58,955 -- 58,955
Short-term debt........................................... 329,690 (329,690)(3) --
Current portion of long-term debt......................... 21,998 (16,667)(3) 5,331
Other current liabilities................................. 6,406 -- 6,406
---------- ---------- ----------
Total current liabilities........................... 462,436 (346,357) 116,079
Long-term debt.............................................. 255,338 303,899(3) 559,237
Premier Club membership fees................................ 63,864 -- 63,864
Other non-current liabilities............................... 11,561 -- 11,561
Minority interest........................................... 1,957 -- 1,957
Shareholders' equity:
Class A common stock...................................... 349 6 355
Class B common stock...................................... 3 -- 3
Contributed capital....................................... 432,130 56,219 488,349
Accumulated deficit....................................... (13,011) -- (13,011)
---------- ---------- ----------
Total shareholders' equity.......................... 419,471 56,225 475,696
---------- ---------- ----------
Total liabilities and shareholders' equity.......... $1,214,627 $ 13,767 $1,228,394
========== ========== ==========
</TABLE>
See accompanying notes.
37
<PAGE> 44
FLORIDA PANTHERS HOLDINGS, INC.
UNAUDITED CONDENSED CONSOLIDATED PRO FORMA STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1997
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
FLORIDA REGISTRY ARIZONA EDGEWATER PRO FORMA
PANTHERS HOTEL AT BILTMORE BEACH ACQUISITION FINANCING AS
HOLDINGS, INC. PELICAN BAY HOTEL HOTEL ADJUSTMENTS ADJUSTMENTS ADJUSTED(1)
-------------- ----------- -------- --------- -------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenue:
Leisure and
recreation............ $ 88,380 $3,135 $25,103 $3,751 $ -- $ -- $120,369
Entertainment and
sports................ 21,149 -- -- -- -- -- 21,149
-------- ------ ------- ------ -------- -------- --------
Total revenue..... 109,529 3,135 25,103 3,751 -- -- 141,518
Operating expenses:
Cost of leisure and
recreation services... 43,468 1,764 10,271 1,520 -- -- 57,023
Cost of entertainment
and sports services... 21,577 -- -- -- -- -- 21,577
Selling, general and
administrative
expenses.............. 40,364 1,310 8,104 1,010 320(4) -- 50,614
500(5)
(994)(5)
Amortization and
depreciation.......... 8,915 162 3,245 437 217(6) -- 12,976
-------- ------ ------- ------ -------- -------- --------
Total operating
expenses........ 114,324 3,236 21,620 2,967 43 -- 142,190
-------- ------ ------- ------ -------- -------- --------
Operating income (loss)... (4,795) (101) 3,483 784 (43) -- (672)
Interest and other
income.................. 1,318 198 -- -- -- -- 1,516
Interest and other
expense................. (6,663) -- (2,641) (205) (10,667)(7) (2,298)(10) (25,654)
(1,731)(8)
(1,449)(9)
Minority interest......... (856) -- -- -- -- -- (856)
-------- ------ ------- ------ -------- -------- --------
Net income (loss)......... $(10,996) $ 97 $ 842 $ 579 $(13,890) $ (2,298) $(25,666)
======== ====== ======= ====== ======== ======== ========
Net loss per share -- basic
and diluted............. $ (0.33) $ (0.63)
======== ========
Shares used in computing
net loss per
share -- basic and
diluted................. 33,552 40,701(11)
======== ========
</TABLE>
See accompanying notes.
38
<PAGE> 45
FLORIDA PANTHERS HOLDINGS, INC.
UNAUDITED CONDENSED CONSOLIDATED PRO FORMA STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JUNE 30, 1998
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
REGISTRY
FLORIDA HOTEL
PANTHERS AT ARIZONA EDGEWATER PRO FORMA
HOLDINGS PELICAN BILTMORE BEACH ACQUISITION FINANCING AS
INC. BAY HOTEL HOTEL ADJUSTMENTS ADJUSTMENTS ADJUSTED(1)
--------- -------- -------- --------- -------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenue:
Leisure and recreation...... $252,603 $ 3,135 $38,836 $8,787 $ -- $ -- $303,361
Entertainment and sports.... 43,586 -- -- -- -- -- 43,586
-------- ------- ------- ------ -------- -------- --------
Total revenue......... 296,189 3,135 38,836 8,787 -- -- 346,947
Operating Expenses:
Cost of leisure and
recreation services....... 110,084 1,764 15,372 2,852 -- -- 130,072
Cost of entertainment and
sports services........... 45,919 -- -- -- -- -- 45,919
Selling, general and
administrative expenses... 91,579 1,310 10,723 1,802 508(4) -- 105,205
(1,384)(5)
667(5)
Amortization and
depreciation.............. 23,155 162 4,327 713 336(6) -- 28,693
-------- ------- ------- ------ -------- -------- --------
Total operating
expenses............ 270,737 3,236 30,422 5,367 127 -- 309,889
-------- ------- ------- ------ -------- -------- --------
Operating income(loss)........ 25,452 (101) 8,414 3,420 (127) -- 37,058
Interest and other income..... 2,307 198 -- -- -- -- 2,505
Interest and other expenses... (24,673) -- (3,511) (372) (14,183)(7) (2,566)(10) (49,474)
(2,720)(8)
(1,449)(9)
Minority interest............. (1,813) -- -- -- -- -- (1,813)
-------- ------- ------- ------ -------- -------- --------
Net income (loss)(12)......... $ 1,273 $ 97 $ 4,903 $3,048 $(18,479) $ (2,566) $(11,724)
======== ======= ======= ====== ======== ======== ========
Net income (loss) per share --
basic and diluted........... $ 0.04 $ (0.29)
======== ========
Shares used in computing net
income (loss) per share --
basic....................... 34,334 40,714(11)
======== ========
Shares used in computing net
income (loss) per share --
diluted..................... 34,888 40,714(11)
======== ========
</TABLE>
See accompanying notes.
39
<PAGE> 46
FLORIDA PANTHERS HOLDINGS, INC.
UNAUDITED CONDENSED CONSOLIDATED PRO FORMA STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1998
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
PRO FORMA
FLORIDA PANTHERS FINANCING AS
HOLDINGS, INC. ADJUSTMENTS ADJUSTED(1)
----------------- ----------- -----------
<S> <C> <C> <C>
Revenue:
Leisure and recreation.................................... $128,872 $ -- $128,872
Entertainment and sports.................................. 28,455 -- 28,455
-------- ------- --------
Total revenue........................................... 157,327 -- 157,327
Operating expenses:
Cost of leisure and recreation services................... 63,042 -- 63,042
Cost of entertainment and sports services................. 22,161 -- 22,161
Selling, general and administrative expenses.............. 46,226 -- 46,226
Amortization and depreciation............................. 15,031 -- 15,031
-------- ------- --------
Total operating expenses................................ 146,460 -- 146,460
-------- ------- --------
Operating income............................................ 10,867 -- 10,867
Interest and other income................................... 1,470 -- 1,470
Interest and other expenses................................. (23,217) (1,355)(10) (24,572)
Minority interest........................................... (180) -- (180)
-------- ------- --------
Net loss.................................................... $(11,060) $(1,355) $(12,415)
======== ======= ========
Net loss per share -- basic and diluted..................... $ (0.31) $ (0.30)
======== ========
Shares used in computing net loss per share -- basic and
diluted................................................... 35,145 40,743(11)
======== ========
</TABLE>
See accompanying notes.
40
<PAGE> 47
FLORIDA PANTHERS HOLDINGS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED PRO FORMA
FINANCIAL STATEMENTS
(1) Pro forma as adjusted reflects the acquisition of the Registry Hotel at
Pelican Bay, the Arizona Biltmore Hotel and the Edgewater Beach Hotel, as
applicable, and gives effect to the Private Placement, the Rights Offering,
the initial borrowings under our New Credit Facility, the Private Debt
Offering and the application of the net proceeds from these financings.
(2) Represents estimated transaction costs associated with our New Credit
Facility and the Exchange Offer.
(3) The change in debt consists of the following:
<TABLE>
<CAPTION>
BORROWINGS (REPAYMENTS)
-----------------------------------
CURRENT
PORTION OF
SHORT-TERM LONG-TERM LONG-TERM
DEBT DEBT DEBT
---------- ---------- ---------
<S> <C> <C> <C>
New Credit Facility............................. $ -- $ -- $ 24,851
9 7/8% Senior Subordinated Notes................ -- -- 340,000
Interim loan payable to bank.................... (219,940) -- --
Arizona Biltmore loan........................... (99,750) -- --
Unsecured line-of-credit........................ (10,000) -- --
Arizona Biltmore earnout note................... -- (16,667) --
Hockey revolving credit facility................ -- -- (35,000)
Pier 66 mortgage................................ -- -- (25,952)
--------- -------- --------
$(329,690) $(16,667) $303,899
========= ======== ========
</TABLE>
(4) Represents a management fee equal to 1.0% of revenue which is payable to
Huizenga Holdings, Inc., a related party controlled by Mr. Huizenga.
Huizenga Holdings assists us in: obtaining financing relating to business
operations and acquisitions, identifying and reviewing potential
acquisitions, developing tax planning strategies, formulating risk
management strategies and providing such other services as we may
reasonably request.
(5) Pro forma adjustments represent a reduction in selling, general and
administrative expenses for the historical management and technical service
fees under a former agreement for the Arizona Biltmore Hotel, offset by the
cost of the new management fee provided for under a recently executed
agreement.
(6) Represents adjustments to depreciation expense associated with the
stepped-up basis of the property and equipment of the acquired companies.
(7) Represents additional interest expense associated with financing the
acquisition of the Arizona Biltmore Hotel.
(8) Represents additional interest expense associated with financing the
acquisition of the Edgewater Beach Hotel.
(9) Represents additional interest expense associated with financing the 149
units of the Registry Hotel at Pelican Bay acquired subsequent to our
acquisition of the 325 initial units.
(10) Represents additional interest expense associated with the increased cost
of borrowing pursuant to this Offering. The weighted average cost of
borrowing increased: from 8.3% for the six months ended December 31, 1997
to 10.0% on a pro forma basis for the same period, from 8.6% for the year
ended June 30, 1998 to 10.0% on a pro forma basis for the same period and
from 8.9% for the six months ended December 31, 1998 to 9.9% on a pro forma
basis for the same period.
(11) Net income (loss) per share and number of shares used to compute net income
(loss) per share for the six months ended December 31, 1997 and the year
ended June 30, 1998 is determined based on the 6,000,000 shares issued in
the Common Stock Offering as if they had been outstanding for the entire
41
<PAGE> 48
period, the 4,022,561 shares issued in the Private Placement as if they had
been outstanding for the entire period, the 1,575,621 shares issued in the
Rights Offering as if they had been outstanding for the entire period and
the 918,174 shares issued in connection with the acquisition of the
Registry Hotel at Pelican Bay as if they had been outstanding for the
entire period presented. Net income (loss) per share (diluted) includes the
effect of dilutive stock options. Net loss per share and number of shares
used to compute net loss per share for the six months ended December 31,
1998 is determined based on the 4,022,561 shares issued in the Private
Placement as if they had been outstanding for the entire period and the
1,575,621 shares issued in the Rights Offering as if they had been
outstanding for the entire period.
(12) A pro forma tax provision has been excluded from the presentation based on
the fact that we have adequate net operating loss carry forwards to offset
pro forma earnings presented. We may be subject to an alternative minimum
tax in accordance with the provisions of the Internal Revenue Code. Such
amounts will be used to offset future tax payments, if any, as necessary.
Accordingly, as we believe the realizability of these amounts is more
likely than not, no allowance will be recorded and no tax provision has
been included in the accompanying pro forma financial statements.
42
<PAGE> 49
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
GENERAL
Florida Panthers Holdings, Inc.'s operations are comprised of two business
segments: (1) leisure and recreation, which primarily consists of the ownership
of six luxury resorts, including the operation of hotels, conference facilities,
golf courses, spas, marinas and private clubs; and (2) entertainment and sports,
which primarily consists of the operations of the Florida Panthers Hockey Club,
a professional hockey team which has been a member of the National Hockey League
since 1993.
We were formed in July 1996 for the purpose of acquiring the Florida
Panthers Hockey Club. Since our initial public offering in November 1996, we
expanded into leisure and recreation businesses through the acquisition,
ownership and operation of luxury resorts, and expanded the entertainment and
sports business to include the management of the National Car Rental Center.
We expanded our leisure and recreation business through the acquisition of
six luxury resorts as follows:
- Hyatt Regency Pier 66 Hotel and Marina (Fort Lauderdale, Florida): We
acquired the Hyatt Regency Pier 66 in March 1997 for 4,450,000 shares of
Class A common stock.
- Radisson Bahia Mar Resort and Yachting Center (Fort Lauderdale, Florida):
We acquired the Bahia Mar in March 1997 for 3,950,000 shares of Class A
common stock.
- Boca Raton Resort and Club (Boca Raton, Florida): We acquired
substantially all the assets of the Boca Raton Resort and Club in June
1997 for 272,303 shares of Class A common stock, rights to acquire
4,242,586 shares of Class A common stock and warrants to purchase 869,810
shares of Class A common stock at a purchase price of $29.01 per share.
- Registry Hotel at Pelican Bay (Naples, Florida): We acquired our initial
68% interest in the Registry Hotel at Pelican Bay in August 1998 for
918,174 shares of Class A common stock, warrants to purchase 325,000
shares of Class A common stock, and $75.5 million of cash. As of July 30,
1998, we acquired the remaining interest for $30.8 million of cash.
- Edgewater Beach Hotel (Naples, Florida): We acquired the Edgewater Beach
Hotel in April 1998 for $41.2 million, $20.7 million of which was paid in
cash at closing and $20.5 million of which was paid in cash in September
1998.
- Arizona Biltmore Hotel (Phoenix, Arizona): We acquired the Arizona
Biltmore Hotel in March 1998 for $126.0 million in cash at closing, a
payment of $500,000 in cash after April 2001, a payment of $99.8 million
of cash in December 1998, warrants to purchase 500,000 shares of Class A
common stock at $24.00 per share and the assumption of $63.1 million in
debt. We also agreed to pay up to $50.0 million to the sellers
conditioned upon their satisfactory execution of certain developmental
plans. The plans were delivered to us in acceptable form in December
1998. Accordingly, the $50.0 million is payable at the election of the
seller, either in cash or in shares of our Class A common stock, in three
equal annual installments commencing in April 1999.
We expanded our entertainment and sports business to include the management
of the National Car Rental Center as follows:
- National Car Rental Center: Construction of the National Car Rental
Center was completed in October 1998. Subsequent to completion, the
Panthers changed the venue for their home games from the Miami Arena to
the National Car Rental Center.
We generate revenue from our leisure and recreation business through room
night sales at our resorts, food and beverage sales at our restaurants, usage
fees for our conference facilities and amenities (including golf, spas, tennis,
fitness centers and boat slips), sales at our pro shops and other retail shops
and through our Boca Raton Premier Club membership fees and dues. The Boca Raton
Premier Club currently requires an initial membership fee of $45,000 and annual
social dues starting at $2,300. Additional dues are required for
43
<PAGE> 50
memberships to the resort's golf and tennis facilities. The initial membership
fees for the Boca Raton Premier Club are initially recorded for accounting
purposes as deferred revenue and recognized as revenue over the estimated useful
life of the membership. Social dues are recognized ratably over the membership
year.
We generate revenue from our entertainment and sports business primarily
through the sale of tickets to the Panther's home games, the licensing of local
market television, cable network, and radio rights, from distributions under
revenue-sharing arrangements with the NHL covering national broadcasting
contracts, as well as other ancillary sources including franchise expansion
fees. In addition, we generate revenue through our participation in the net
operating income of the National Car Rental Center, where the Panthers began
playing their home games in October 1998. With a total of 19,500 hockey seats,
including luxury suites and premium club seats, the National Car Rental Center
is 30% larger than the Miami Arena, where the Panthers played prior to moving to
the National Car Rental Center.
We did not generate any operating income or net earnings for any year prior
to our fiscal year ended June 30, 1998. These losses were due primarily to the
operations of the Panthers. However, for the year ended June 30, 1998 and the
six months ended December 31, 1998, we generated operating income of $25.5
million and $10.9 million respectively. This increase in operating earnings is
due in part to our move into the high-end luxury resort business, which is
generally more profitable than professional sports franchises. In addition,
earnings for our entertainment and sports business increased primarily due to
the growth in revenues associated with the Panther's move to the National Car
Rental Center in October 1998.
This section may not contain all the information that is important to you.
This section should be read together with the Unaudited Condensed Consolidated
Financial Statements for the six months ended December 31, 1998 and the
Consolidated Financial Statements for the year ended June 30, 1998 included
elsewhere in this Prospectus because such information provides substantially
greater detail.
44
<PAGE> 51
RESULTS OF OPERATIONS
SIX MONTHS ENDED DECEMBER 31, 1997 COMPARED TO THE SIX MONTHS ENDED DECEMBER 31,
1998
BUSINESS SEGMENT INFORMATION
Business segment operating data, along with costs and expenses expressed as
a percentage of the related business segment revenue, is set forth below.
Certain reclassifications of prior period amounts have been made to conform to
the current year presentation.
<TABLE>
<CAPTION>
SIX MONTHS ENDED DECEMBER 31,
-----------------------------------
1997 % 1998 %
-------- --- -------- ----
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
REVENUE:
Leisure and recreation...................................... $ 88,380 81% $128,872 82%
Entertainment and sports.................................... 21,149 19% 28,455 18%
-------- --------
Total revenue............................................. 109,529 100% 157,327 100%
OPERATING EXPENSES:
Cost of services:
Leisure and recreation.................................... 43,468 49% 63,042 49%
Entertainment and sports.................................. 21,577 102% 22,161 78%
Selling, general and administrative expenses:
Leisure and recreation.................................... 31,698 36% 37,209 29%
Entertainment and sports.................................. 4,874 23% 4,912 17%
Corporate................................................. 3,792 4,105
Amortization and depreciation:
Leisure and recreation.................................... 6,893 8% 13,367 10%
Entertainment and sports.................................. 2,022 10% 1,604 6%
Corporate................................................. -- 60
-------- --------
Total operating expenses............................ 114,324 104% 146,460 93%
-------- --------
Operating income (loss)............................. $ (4,795) (4%) $ 10,867 7%
======== ========
EBITDA:
Leisure and recreation.................................... $ 14,184 $ 29,922
Entertainment and sports.................................. (5,161) 1,471
Corporate................................................. (3,585) (4,025)
-------- --------
Total............................................... $ 5,438 $ 27,368
======== ========
ADJUSTED EBITDA:
Leisure and recreation.................................... $ 14,184 $ 33,645
Entertainment and Sports.................................. (5,161) 1,471
Corporate................................................. (3,585) (4,025)
-------- --------
Total............................................... $ 5,438 $ 31,091
======== ========
</TABLE>
CONSOLIDATED RESULTS OF OPERATIONS
Operating loss totaled $4.8 million for the six months ended December 31,
1997, compared to operating income of $10.9 million for the six months ended
December 31, 1998. Higher revenue during the six months ended December 31, 1998,
together with better profit margins, led to the improvement in operating
results. Additional information relating to the operating results for each
business segment is set forth below.
LEISURE AND RECREATION
Improvements in leisure and recreation operating results between December
31, 1997 and 1998 were largely due to acquisitions. We purchased (1) a 68%
ownership interest in the Registry Hotel at Pelican Bay in August 1997 (and
acquired the remaining interests by July 1998), (2) the Arizona Biltmore Hotel
in March 1998 and (3) the Edgewater Beach Hotel in April 1998.
45
<PAGE> 52
Revenue
Leisure and recreation revenue totaled $88.4 million and $128.9 million for
the six months ended December 31, 1997 and 1998, respectively. As indicated
above, the increase in revenue for the six months ended December 31, 1998 was
largely due to acquisitions. In addition, the average daily rate ("ADR") for our
resort portfolio increased from $137 for the six months ended December 31, 1997,
to $158 for the six months ended December 31, 1998. The improvement in ADR was
partially offset by a decrease in the average occupancy rate for the six months
ended December 31, 1998. Accordingly, revenue per available room increased from
$89 for the six months ended December 31, 1997, to $97 for the six months ended
December 31, 1998.
Approximately 60% of revenue for the six months ended December 31, 1997 and
1998 were derived from non-room sources such as food and beverage sales,
yachting and marina revenue, club memberships, retail and other resort
amenities. We expect leisure and recreation revenue for the three months ended
March 31, 1999 to be higher than the just concluded quarter because the
properties will be entering their peak season of operations.
Operating Expenses
Cost of leisure and recreation services totaled $43.5 million or 49% of
revenue for the six months ended December 31, 1997, compared to $63.0 million or
49% of revenue for the six months ended December 31, 1998. Cost of leisure and
recreation services primarily consisted of direct costs to service rooms,
marinas, food and beverage operations, retail establishments and other amenities
at the resorts.
Selling, general and administrative expenses ("S,G&A") of the leisure and
recreation business totaled $31.7 million or 36% of revenue for the six months
ended December 31, 1997, compared to $37.2 million or 29% of revenue for the six
months ended December 31, 1998. S,G&A as a percent of revenue improved for the
six months ended December 31, 1998 primarily because of certain cost
efficiencies associated with consolidated marketing efforts as well as reduced
overhead for such items as insurance and professional fees. S,G&A primarily
consisted of various fixed, indirect costs, including utility and property
costs, real estate taxes, insurance, management and franchise agreement fees and
administrative salaries and expenses.
Amortization and depreciation expense associated with the leisure and
recreation business totaled $6.9 million and $13.4 million for the six months
ended December 31, 1997 and 1998, respectively. The increase was primarily due
to a full period of depreciation during the six months ended December 31, 1998
for the Registry Hotel at Pelican Bay as well as depreciation for the recently
acquired Arizona Biltmore Hotel and Edgewater Beach Hotel.
ENTERTAINMENT AND SPORTS
Improvements in entertainment and sports operating results between December
31, 1997 and 1998 were primarily attributable to the Panthers' move from the
Miami Arena to the newly constructed National Car Rental Center. Additional
revenue sources available at the National Car Rental Center accounted for an
increase in operating income of approximately $6.5 million during the six months
ended December 31, 1998 compared to the six months ended December 31, 1997.
Revenue
Entertainment and sports business revenue amounted to $21.1 million and
$28.5 million for the six months ended December 31, 1997 and 1998, respectively.
The primary components of the entertainment and sports business are the Florida
Panthers Hockey Club and arena operations. Revenue and direct expenses
associated with the team are recorded over the regular hockey season. Therefore,
the majority of revenue is reported during the three-month periods ended
December 31 and March 31. Should the Panthers participate in the playoffs,
additional revenue and expenses will be recorded during the three-month period
ended June 30. The increase in revenue during the six months ended December 31,
1998 was derived primarily from the National Car Rental Center where the
Panthers serve as primary tenants. Management expects arena
46
<PAGE> 53
revenue for the ensuing quarter ending March 31, 1999 to be higher than
comparable quarter of the prior year due to its favorable tenant and management
agreement with the National Car Rental Center.
Operating Expenses
Cost of entertainment and sports services totaled $21.6 million or 102% of
revenue for the six months ended December 31, 1997, compared to $22.2 million or
78% of revenue for the six months ended December 31, 1998. S,G&A of the
entertainment and sports business totaled $4.9 million or 23% of revenue for the
six months ended December 31, 1997, compared to $4.9 million or 17% of revenue
for the six months ended December 31, 1998. While cost of services and S,G&A
remained relatively flat in amounts, these expenses decreased as a percent of
revenue because of an increase in revenue derived from our ownership interests
in arena operations.
Amortization and depreciation expense associated with the entertainment and
sports business totaled $2.0 million and $1.6 million for the six months ended
December 31, 1997 and 1998, respectively. These expenses include amortization of
Panthers' player salaries and a National Hockey League franchise fee that was
paid in 1993 when the expansion franchise was granted. A portion of the National
Hockey League franchise fee has been fully amortized and, accordingly,
amortization expense decreased for the six months ended December 31, 1998.
CORPORATE GENERAL AND ADMINISTRATIVE EXPENSES
Corporate general and administrative expenses totaled $3.8 million and $4.1
million for the six months ended December 31, 1997 and 1998, respectively.
INTEREST AND OTHER INCOME
Interest and other income primarily include interest earned on cash and
cash equivalents and on the Premier Club notes receivable. Interest and other
income totaled $1.3 million and $1.5 million for the six months ended December
31, 1997 and 1998, respectively.
INTEREST EXPENSE
Interest expense totaled $6.7 million and $23.2 million for the six months
ended December 31, 1997 and 1998, respectively. The increase was the result of
higher debt levels assumed or originated in connection with the acquisitions of
resorts coupled with higher weighted average borrowing costs. Our debt increased
from $173.9 million at December 31, 1997 to $607.0 million at December 31, 1998.
MINORITY INTEREST
Minority interest totaled $856,000 and $180,000 during the six months ended
December 31, 1997 and 1998, respectively. The decrease in minority interest
expense is primarily the result of owning all units of the Registry Hotel at
Pelican Bay during the six months ended December 31, 1998.
EBITDA
EBITDA represents earnings before interest expense, income taxes,
depreciation, amortization and minority interest. EBITDA amounted to $5.4
million and $27.4 million for the six months ended December 31, 1997 and 1998,
respectively. The improvement in EBITDA was the result of an increase in
revenue, partly due to acquisitions, and better profit margins during the six
months ended December 31, 1998 compared to the six months ended December 31,
1997.
Our management and certain investors use EBITDA and Adjusted EBITDA as
indicators of our historical ability to service debt, to sustain potential
future increases in debt and to satisfy capital requirements. However, neither
EBITDA nor Adjusted EBITDA is intended to represent cash flows for the period.
In addition, they have not been presented as alternatives to either (1)
operating income (as
47
<PAGE> 54
determined by GAAP) as an indicator of operating performance or (2) cash flows
from operating, investing and financing activities (as determined by GAAP) and
is susceptible to varying calculations.
ADJUSTED EBITDA
Adjusted EBITDA represents EBITDA plus the annual change in net deferred
income from the Premier Club at the Boca Raton Resort and Club. The Premier Club
currently requires a non-refundable initial membership fee of $45,000 and annual
social dues starting at $2,300. Members of the Premier Club have access to the
Boca Raton Resort and Club grounds and recreational facilities, which are
otherwise restricted to resort guests. Initial membership fees are recorded as
revenue over the estimated life of the membership. Unrecognized Premier Club
amounts are reflected as deferred revenue on the Consolidated Balance Sheets.
Adjusted EBITDA amounted to $5.4 million and $31.1 million for the six months
ended December 31, 1997 and 1998, respectively. The improvement in adjusted
EBITDA was the result of an increase in revenue (including deferred Premier Club
revenue) and better profit margins during the six months ended December 31, 1998
compared to the six months ended December 31, 1997.
YEAR ENDED JUNE 30, 1996 COMPARED TO 1997 AND 1998 ACQUISITIONS
We make decisions to acquire or invest in businesses based on financial and
strategic considerations. Each of the acquisitions discussed below, with the
exception of the acquisition of Decoma Miami Associated, Ltd. (an entity which
managed the Miami Arena), which took place prior to our initial public offering,
has been accounted for under the purchase method of accounting.
ACQUISITIONS MADE DURING THE YEAR ENDED JUNE 30, 1997
Prior to the completion of our initial public offering, we acquired from
our Chairman approximately 78% of the partnership interest in Decoma in exchange
for 870,968 shares of our Class A common stock. Decoma derives revenue from the
operations of the Miami Arena. This transaction was among entities under common
control, and therefore, was accounted for on a historical cost basis in a manner
similar to a pooling of interests as of the date of the acquisition by our
Chairman.
In January 1997, we acquired certain assets relating to Incredible Ice in
exchange for (1) $1.0 million in cash, (2) 212,766 shares of our Class A common
stock and (3) the assumption of a maximum of $8.1 million in
construction-related obligations. Incredible Ice provides open skating, ice
hockey leagues and other ice programs to the public.
In March 1997, we acquired all of the ownership interests, comprised of
capital stock and partnership interests, of each of the entities which own,
directly or indirectly, all of the general and limited partnership interests in
the Hyatt Regency Pier 66 Hotel and Marina for 4,450,000 shares of our Class A
common stock.
In March 1997, we acquired all of the ownership interests, comprised of
capital stock and partnership interests, of each of the entities which own,
directly or indirectly, all of the general and limited partnership interests in
the Radisson Bahia Mar Resort and Yachting Center in exchange for 3,950,000
shares of our Class A common stock.
In May 1997, we acquired the rights to operate Gold Coast Ice Arena in
exchange for 34,760 shares of our Class A common stock. Gold Coast Ice Arena
provides open skating, ice hockey leagues and other programs to the public.
In June 1997, we acquired substantially all of the net assets of the Boca
Raton Resort and Club in exchange for (1) 272,303 shares of our Class A common
stock, (2) rights to acquire 4,242,586 shares of our Class A common stock for no
additional consideration and (3) warrants to purchase 869,810 shares of our
Class A common stock at a purchase price of $29.01 per share. Half of the
warrants expired in December 1998 and the remaining warrants expire in December
1999.
48
<PAGE> 55
ACQUISITIONS MADE DURING THE YEAR ENDED JUNE 30, 1998
In August 1997, we acquired our initial 68% ownership interest (325 of the
474 units) in the Registry Hotel at Pelican Bay for (1) 918,174 shares of our
Class A common stock, (2) warrants to purchase 325,000 shares of our Class A
common stock (300,000 of which are exercisable at $25.85 per share and 25,000 of
which are exercisable at $23.50 per share) and (3) $75.5 million in cash. The
warrants vest ratably on a quarterly basis and become fully exercisable on
December 31, 1999. The warrants expire in October 2003. As of June 30, 1998, we
acquired all but one of the remaining units of the Registry Hotel at Pelican Bay
for additional payments of $30.6 million (net of the payoff of certain mortgage
notes receivable to us associated with additional units). We acquired the last
unit in July 1998.
In November 1997, we acquired certain assets associated with Grande Oaks
Golf Club in exchange for $8.0 million in cash. The assets acquired consist of
an 18-hole golf course and a separate 9-hole golf course (both of which are
currently being redesigned), a parking lot and 79 acres of undeveloped land
adjacent to the golf course.
In March 1998, we acquired the Arizona Biltmore Hotel in exchange for (1)
payment of $126.0 million in cash at closing, (2) payment of $99.8 million in
cash in December 1998, (3) payment of $500,000 in cash after April 2001, (4)
warrants to purchase 500,000 shares of our Class A common stock exercisable at
$24.00 per share at any time, in whole or part, through March 2003 and (5) the
assumption of $63.1 million of debt. The $500,000 bears interest at a rate of
2.5% per annum. We also agreed to pay up to $50.0 million to the sellers
conditioned upon their satisfactory execution of certain developmental plans.
The plans were delivered to us in acceptable form in December 1998. Accordingly,
the $50.0 million is payable at the election of the seller, either in cash or in
shares of our Class A common stock, in three equal annual installments
commencing in April 1999. We paid $16.7 million of such $50.0 million payable in
connection with the Private Debt Offering.
In April 1998, we acquired the Edgewater Beach Hotel for $41.2 million,
$20.7 million of which was paid in cash at closing and $20.5 million of which
was paid in cash in September 1998.
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<PAGE> 56
BUSINESS SEGMENT INFORMATION
The table set forth below outlines business segment operating data along
with costs and expenses expressed as a percentage of the related business
segment revenue.
<TABLE>
<CAPTION>
FISCAL YEAR ENDED JUNE 30,
--------------------------------------------------------
1996 % 1997 % 1998 %
-------- --- ------- --- -------- ---
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
REVENUE:
Leisure and recreation.................................... $ -- -- $17,567 32% $252,603 85%
Entertainment and sports.................................. 34,087 100% 36,695 68% 43,586 15%
-------- ------- --------
Total revenue..................................... 34,087 100% 54,262 100% 296,189 100%
OPERATING EXPENSES:
Cost of services:
Leisure and recreation.................................. -- -- 6,658 38% 110,084 44%
Entertainment and sports................................ 35,958 105% 35,135 96% 45,919 105%
Selling, general and administrative expenses:
Leisure and recreation.................................. -- -- 5,397 31% 71,800 28%
Entertainment and sports................................ 8,371 25% 7,854 21% 10,002 23%
Corporate............................................... -- 1,899 9,777
Amortization and depreciation:
Leisure and recreation.................................. -- -- 1,459 8% 17,950 7%
Entertainment and sports................................ 9,815 29% 4,239 12% 5,168 12%
Corporate............................................... -- -- 37
-------- ------- --------
Total operating expenses.......................... 54,144 159% 62,641 115% 270,737 91%
-------- ------- --------
Operating income (loss)........................... $(20,057) (59%) $(8,379) (15%) $ 25,452 9%
======== ======= ========
EBITDA:
Leisure and recreation.................................. $ -- $ 5,512 $ 72,478
Entertainment and sports................................ (10,120) (6,040) (12,092)
Corporate............................................... -- (230) (9,472)
-------- ------- --------
Total............................................. $(10,120) $ (758) $ 50,914
======== ======= ========
ADJUSTED EBITDA:
Leisure and recreation.................................. $ -- $ 5,512 $ 78,292
Entertainment and sports................................ (10,120) (6,040) (12,092)
Corporate............................................... -- (230) (9,472)
-------- ------- --------
Total............................................. $(10,120) $ (758) $ 56,728
======== ======= ========
</TABLE>
CONSOLIDATED RESULTS OF OPERATIONS
Operating losses totaled $20.1 million and $8.4 million for the years ended
June 30, 1996 and 1997, respectively. Operating income totaled $25.5 million for
the year ended June 30, 1998. The improvement in operating results from 1996 to
1998 was the result of our diversification into the leisure and recreation
business in 1997, followed by an increase in the number of resort properties
under ownership in 1998 (due to business acquisitions). The improved results for
the leisure and recreation business during 1998 were partially offset by higher
corporate general and administrative expenses and higher losses from the
entertainment and sports business. Additional information relating to the
operating results for each business segment is set forth below.
LEISURE AND RECREATION
Because the size of our resort portfolio has increased from three
properties at June 30, 1997, to six properties at June 30, 1998 variations in
operating results between 1997 and 1998 resulted primarily from business
acquisitions. Because we began acquiring resort properties in 1997, a comparison
of 1996 and 1997 annual resort data has been excluded, as it is not meaningful.
Revenue
Leisure and recreation business revenue increased from $17.6 million for
the year ended June 30, 1997, to $252.6 million for the year ended June 30,
1998. More than 50% of leisure and recreation revenue for the year ended June
30, 1998 was derived from full-year activities of the Boca Raton Resort and
Club. In addition, over 50% of consolidated resort revenue for the year ended
June 30, 1998 was generated from non-room sources such as food and beverage
sales, marina, retail sales and other amenities.
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Operating Expenses
Cost of services for the leisure and recreation business totaled $6.7
million and $110.1 million for the years ended June 30, 1997 and 1998,
respectively. Cost of services as a percentage of revenue was 38% and 44% for
the years ended June 30, 1997 and 1998, respectively. In the future, we
anticipate improving gross operating margins for each of our resorts by taking
advantage of consolidated purchasing opportunities.
S,G&A for the leisure and recreation business totaled $5.4 million and
$71.8 million for the years ended June 30, 1997 and 1998, respectively. S,G&A as
a percentage of revenue was 31% and 28% for the years ended June 30, 1997 and
1998, respectively. Our management believes we will benefit from additional
economies in S,G&A as our resort portfolio grows. These savings opportunities
include the consolidation of reservation systems, coordinated sales and
marketing efforts and reduced costs for insurance and management overhead.
Amortization and depreciation expense for the leisure and recreation
business was $1.5 million and $18.0 million for the years ended June 30, 1997
and 1998, respectively. As discussed above, increases were due to additional
depreciation for property and equipment acquired in connection with business
combinations.
ENTERTAINMENT AND SPORTS
Revenue
Entertainment and sports business revenue was $34.1 million, $36.7 million
and $43.6 million for the years ended June 30, 1996, 1997 and 1998,
respectively. The increase in revenue from the year ended 1996 to the year ended
June 30, 1997 was the result of higher Panthers ticket sales due to all home
games being sold out during the 1996-1997 season. In addition, more revenue from
broadcasting and advertising/promotion contracts was recognized during 1997,
offset by fewer playoff games played in the 1996-1997 season as compared to the
1995-1996 season. The increase in revenue from the year ended 1997 to the year
ended June 30, 1998 was partially due to the receipt of the Panthers' share of
an expansion fee, which resulted from a new hockey franchise being admitted into
the NHL. In addition, revenue from arena operations increased.
Operating Expenses
Entertainment and sports operating expenses, which include among other
items, Panthers' player salaries and arena and ticketing costs, were $54.1
million, $47.2 million and $61.1 million for the years ended June 30, 1996, 1997
and 1998, respectively. During fiscal 1996, amortization of players' contracts
was higher than during fiscal 1997 and 1998, to reflect the then current value
of the remaining contracts of players selected in the 1993 draft. The increase
in operating expenses of $13.9 million, or approximately 29%, during the year
ended June 30, 1998 compared to the year ended June 30, 1997 was primarily the
result of higher Panthers' player salaries, along with increased costs
associated with the operation of our ice skating rink facilities.
CORPORATE GENERAL AND ADMINISTRATIVE EXPENSES
Corporate general and administrative expenses totaled $1.9 million and $9.8
million for the years ended June 30, 1997 and 1998, respectively. There were no
corporate general and administrative expenses for the year ended June 30, 1996.
The increase was substantially the result of additional legal, accounting,
treasury and other corporate general and administrative expenses associated with
our (1) increase in total revenue and assets, (2) diversification into the
luxury resort business and (3) public company compliance and reporting
activities. To the extent that revenue increases in the future, corporate
general and administrative expenses will increase because of a management fee
equal to 1.0% of revenue which is payable to Huizenga Holdings, Inc., a
privately held corporation controlled by our Chairman. Huizenga Holdings assists
us in: obtaining financing relating to business operations and acquisitions,
identifying and reviewing potential acquisitions, developing tax planning
strategies, formulating risk management strategies and providing such other
services as we may reasonably request.
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INTEREST AND OTHER INCOME
Interest and other income totaled $122,000, $1.9 million and $2.3 million
for the years ended June 30, 1996, 1997 and 1998, respectively. The increase in
interest from 1996 and 1997 to 1998 was the result of maintaining a higher
average cash balance due to sales of common stock and cash flow from the added
resorts. We raised $131.9 million and $108.5 million during the years ended June
30, 1997 and 1998, respectively, through the sale of common stock.
INTEREST EXPENSE
Interest expense totaled $5.0 million, $3.4 million and $24.7 million for
the years ended June 30, 1996, 1997 and 1998, respectively. The average
outstanding indebtedness during 1996 and 1997 related primarily to the purchase
of the Panthers, along with borrowing needed to fund hockey operations. Such
indebtedness was repaid with a portion of the proceeds from our initial public
offering. The increase in interest expense during the 1998 period was
attributable to additional debt assumed or incurred in connection with certain
resort acquisitions.
MINORITY INTEREST
Minority interest totaled $174,000, $440,000 and $1.8 million for the years
ended June 30, 1996, 1997 and 1998, respectively. The increase from the 1996 and
1997 periods to 1998 was primarily the result of our initial 32% minority
interest in the Registry Hotel at Pelican Bay (resulting from our acquisition of
a 68% interest in the Registry Hotel in August 1997). By June 30, 1998, we had
increased our interest in the Registry Hotel at Pelican Bay to 99% and acquired
the remaining 1% in July 1998.
EBITDA
As a result of the acquisition of resorts, EBITDA increased from $(10.1)
million for the year ended June 30, 1996, to $(758,000) for the year ended June
30, 1997, to $50.9 million for the year ended June 30, 1998.
ADJUSTED EBITDA
Adjusted EBITDA increased from $(10.1) million for the year ended June 30,
1996, to $(758,000) for the year ended June 30, 1997, to $56.7 million for the
year ended June 30, 1998. The increase in Adjusted EBITDA was due to resort
acquisitions.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents decreased from $37.2 million at June 30, 1998, to
$12.9 million at December 31, 1998. Cash and cash equivalents increased from
$13.7 million at June 30, 1997, to $37.2 million at June 30, 1998. Cash and cash
equivalents increased from $465,000 at June 30, 1996, to $13.7 million at June
30, 1997. The major components of the changes are discussed below.
Cash Provided By/Used In Operating Activities
Net cash provided by operating activities totaled $26.3 million and $23.6
million during the six months ended December 31, 1997 and 1998, respectively.
The decrease in cash provided by operating activities during the six months
ended December 31,1998 was primarily the result of the payment of certain
amounts in connection with the construction of the National Car Rental Center.
Cash used in operating activities totaled $17.4 million for the year ended
June 30, 1996. Net cash provided by operating activities totaled $2.9 million
and $37.7 million for the years ended June 30, 1997 and 1998, respectively. The
increase in cash flow from operations from the year ended June 30, 1996 and 1997
to the year ended June 30, 1998 was the result of receiving more cash flow from
the resorts. The Registry Hotel at Pelican Bay, the Arizona Biltmore Hotel and
the Edgewater Beach Hotel were acquired subsequent to
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June 30, 1997, and accordingly, the related cash flow is not included in our
1996 and 1997 financial statements. Cash flow from the newly acquired resorts
was partially offset by increased costs for corporate general and administrative
expense and less cash flow from the entertainment and sports business.
Cash Used In Investing Activities
Cash used in investing activities amounted to $123.6 million and $57.3
million during the six months ended December 31, 1997 and 1998, respectively.
Net cash used in investing activities amounted to $140,000, $515,000 and $293.4
million for the years ended June 30, 1996, 1997 and 1998, respectively.
During the six months ended December 31, 1997, we spent $63.0 million (net
of cash acquired) on the acquisition of our initial 68% ownership interest in
the Registry Hotel at Pelican Bay, $12.1 million on the acquisition of
additional units of the Registry Hotel at Pelican Bay and $8.0 million on the
acquisition of Grande Oaks Golf Club. We did not acquire any businesses during
the six months ended December 31, 1998.
Cash used in business acquisitions and to acquire additional interests in a
consolidated subsidiary increased from $1.1 million for the year ended June 30,
1997, to $260.8 million for the year ended June 30, 1998. During the year ended
June 30, 1997, we used cash to acquire certain assets relating to the business
of owning and operating a twin-pad ice facility located in Coral Springs,
Florida. All resort acquisitions during the year ended June 30, 1997 involved
the issuance of common stock or the assumption of debt in lieu of payment in
cash. During the year ended June 30, 1998, we (1) acquired our initial 68%
ownership interest in the Registry Hotel at Pelican Bay of which $75.5 million
of the purchase price was paid in cash, (2) closed on additional units of
Registry Hotel at Pelican Bay of which $30.6 million of the purchase price was
paid in cash, (3) acquired Grande Oaks Golf Club for $8.0 million, (4) acquired
the Arizona Biltmore Hotel of which $126.0 million of the purchase price was
paid in cash at closing and (5) acquired the Edgewater Beach Hotel of which
$20.7 million of the purchase price was paid in cash at closing.
Capital expenditures increased by $31.3 million from $30.5 million during
the six months ended December 31, 1997, to $61.8 million during the six months
ended December 31, 1998. During the six months ended December 31, 1997, an
expansion program was nearing completion at the Boca Raton Resort and Club. This
expansion included an 18 court tennis club (that added to the existing 12 courts
located in a separate complex), a new Bates designed championship golf course
and a new 140,000 square foot conference center. During the six months ended
December 31, 1998, we spent $31.0 million on the acquisition of land in Naples
and Plantation, Florida. We plan to use the parcels to construct additional
recreational amenities that would be available to guests of our Naples' and Fort
Lauderdale's resorts. Other capital spending during the six months ended
December 31, 1998 related to continued development and construction at Grande
Oaks Golf Club, continued construction of the 122 guest room addition at the
Arizona Biltmore Hotel and other recurring furniture, fixture and equipment
maintenance at the resorts.
Capital expenditures increased by $46.3 million during the year ended June
30, 1998, primarily associated with the Boca Raton Resort and Club expansion
program. In addition, because we owned more resorts for a longer duration during
fiscal 1998, recurring capital expenditures increased during the year ended June
30, 1998. Capital expenditures increased to $1.5 million in the year ended June
30, 1997 from $140,000 in the year ended June 30, 1996 due to costs incurred in
connection with our ice skating rinks.
Under covenants contained in a senior note secured by the Boca Raton Resort
and Club, we are required to deposit excess operating cash generated by the
resort into reserve accounts which are accumulated and restricted to support
future debt service, facility expansion, furniture, fixture and equipment
replacement and real estate tax payments. Additionally, loan and/or management
agreements for certain other resorts require the maintenance of customary
capital expenditure reserve funds for the replacement of assets. These reserve
funds are classified as restricted cash on the Consolidated Balance Sheets.
Restricted cash increased by $9.9 million during the six months ended December
31, 1997, compared to a decrease of $4.5 million during the six months ended
December 31, 1998. During the six months ended December 31, 1998, the decrease
in restricted cash was primarily the result of the release of funds pursuant to
the terms of the senior note secured by the Boca Raton Resort and Club. No funds
were available for distribution during the six months ended December 31, 1997
because the Boca Raton Resort and Club was undergoing an expansion program.
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Cash Provided By Financing Activities
Cash provided by financing activities amounted to $96.4 million and $9.4
million during the six months ended December 31, 1997 and 1998, respectively.
During the six months ended December 31, 1997, we received $108.8 million of net
proceeds from the underwritten public offering of our Class A common stock,
partially offset by net repayments on indebtedness of $12.2 million. We received
$9.5 million in borrowings, net of repayments and net of financing costs paid,
under credit facilities during the six months ended December 31, 1998.
Net cash provided by financing activities amounted to $16.7 million, $10.9
million and $279.2 million for the years ended June 30, 1996, 1997 and 1998,
respectively. Through the date of our initial public offering, all operating
losses of the Panthers were financed primarily through loans from our Chairman.
As a result, net cash flow from financing activities for the year ended June 30,
1996 consisted entirely of borrowings and repayments of the loans from our
Chairman. During the year ended June 30, 1997, we completed our initial public
offering for an aggregate of 7,300,000 shares of our Class A common stock, which
resulted in net proceeds of $66.3 million. A portion of the net proceeds from
our initial public offering was used to retire $45.0 million of debt. We also
sold 2,460,000 shares of our Class A common stock in a private placement
transaction, which yielded $65.6 million in net proceeds during the year ended
June 30, 1997 and retired $111.3 million of indebtedness assumed in connection
with the acquisition of the Boca Raton Resort and Club. During the year ended
June 30, 1998, we received $108.5 million of net proceeds from the sale of
shares of our Class A common stock and $170.7 million in borrowings, net of
repayments, under debt facilities.
Capital Resources
Our capital resources are provided from both internal and external sources.
The primary capital resources from internal operations include revenue from (1)
room rentals, food and beverage sales, retail sales and golf, tennis, marina and
conference services at the resorts, (2) the Premier Club memberships at the Boca
Raton Resort and Club and (3) ticket, broadcasting, sponsorship and other
revenue derived from ownership of the Panthers. The primary external sources of
liquidity have been the issuance of equity securities and borrowing under term
loans and lines-of-credit.
After giving pro forma effect to the private placement of our Class A
common stock which closed on February 18, 1999, the rights offering
subscriptions for shares of Class A common stock which we accepted on March 31,
1999, the initial borrowings under our New Credit Facility, the Private Debt
Offering and the application of the net proceeds from these financings, there
will be $156.1 million available on our Hockey revolving credit facility and our
New Credit Facility. As a result of this availability and expected cash from
operations, we believe that we will have sufficient funds to make our planned
capital expenditures for fiscal 1999 and to support our on-going operations.
FINANCIAL CONDITION
Significant changes in balance sheet data from June 30, 1998 to December
31, 1998 are discussed below.
Restricted Cash
Restricted cash decreased from $29.3 million at June 30, 1998, to $24.8
million at December 31, 1998. Restricted cash decreased at December 31, 1998
primarily because funds were released from restricted accounts pursuant to the
terms of the senior note secured by the Boca Raton Resort and Club.
Other Current Assets
Other current assets increased from $5.5 million at June 30, 1998 to $14.8
million at December 31, 1998. The increase in other current assets at December
31, 1998 primarily represents financing costs paid in connection with the
origination and extension of credit facilities. Such amounts are being amortized
over the estimated life of the related indebtedness using the straight-line
method, which approximates the interest method.
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Property and Equipment
Property and equipment increased from $959.2 million at June 30, 1998, to
$1.0 billion at December 31, 1998. We spent $31.0 million on the acquisition of
land in Naples and Plantation, Florida. Other capital spending during the six
months ended December 31, 1998 related to continued development and construction
at Grande Oaks Golf Club, continued construction of the 122 guest room addition
at the Arizona Biltmore Hotel and other recurring furniture, fixture and
equipment maintenance at the resorts.
Other Assets
Other assets increased from $13.1 million at June 30, 1998, to $21.5
million at December 31, 1998. A portion of the increase relates to payment of
signing bonuses to Panthers players. Signing bonuses are capitalized and
amortized over the life of a player's contract. In addition, we paid
approximately $3.9 million in connection with the construction of the National
Car Rental Center.
Intangible Assets
In connection with the acquisition of the Arizona Biltmore Hotel in March
1998, we agreed to pay up to $50.0 million to the sellers conditioned upon their
satisfactory execution of certain developmental plans. The plans were delivered
to us in acceptable form in December 1998. The $50.0 million note has no stated
interest rate and, accordingly, is presented net of an unamortized discount of
$4.7 million on the Consolidated Balance Sheet. A corresponding increase of
$45.3 million is also reflected as a component of intangible assets. The
effective interest rate on the note is 8.8%. The $50.0 million is payable at the
election of the seller, either in cash or in shares of our Class A common stock,
in three equal annual installments commencing in April 1999.
Current Portion of Deferred Revenue
Current portion of deferred revenue increased from $35.1 million at June
30, 1998, to $59.0 million at December 31, 1998. Approximately $13.4 million of
the increase related to deposits for advance suite and seat sales at the
National Car Rental Center. Additionally, approximately $6.8 million of the
increase related to receipts of advance deposits on room rentals and membership
fees and annual dues of the Premier Club at the Boca Raton Resort and Club.
Short-Term Debt
Short-term debt increased from $318.3 million at June 30, 1998, to $329.7
million at December 31, 1998. Most of the increase related to fully borrowing
under a new $10.0 million unsecured credit facility, which matures in June 1999.
The interest rate charged under the facility is LIBOR plus .50%. Certain of our
short-term debt instruments are guaranteed by our Chairman of the Board.
Long-Term Debt
Long-term debt increased from $217.8 million at June 30, 1998 to $255.3
million at December 31, 1998. The increase occurred partially because we
borrowed the remaining available balance under our existing $35.0 million credit
facility. These borrowings were partially offset by principal repayments on
indebtedness secured by the Boca Raton Resort and Club and the Arizona Biltmore
Hotel. In addition, we made a note payable to the sellers of the Arizona
Biltmore Hotel.
SEASONALITY
We have historically experienced, and expect to continue to experience,
seasonal fluctuations in our gross revenue and net earnings. Peak season at the
resorts extends from January through April, while the regular hockey season for
the Panthers commences in October and ends in April. On a pro forma basis for
acquisitions, approximately 70% of our annual revenue was historically generated
during the second and third fiscal quarters.
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IMPACT OF INFLATION
Inflation and changing prices have not had a material impact on our revenue
and results of operations. Based on the current economic climate, we do not
expect that inflation and changing prices will have a material impact on our
revenue or earnings during the remainder of fiscal 1999. Many of the costs of
operating our resorts can be fixed for certain periods of time, reducing the
short-term effects of changes in the rate of inflation. Room rates, which are
set on a daily basis, can be rapidly changed to meet changes in inflation rates
(as well as other changing market conditions). To the extent inflationary trends
affect short-term interest rates, a portion of our debt service costs may be
adversely affected.
YEAR 2000
We have completed an assessment relative to the modification or replacement
of portions of our software so that our computer systems will function properly
with respect to dates in the year 2000 and thereafter. We are also in the
process of identifying and reviewing our non-information technology systems with
respect to Y2K issues. In addition, we have begun to communicate with third
parties in order to determine the extent to which our interface systems are
vulnerable to those third parties' failure to remediate their own Y2K issues. As
of December 31, 1998, we had spent approximately $100,000 on Y2K issues. Our Y2K
project is scheduled to be completed by June 30, 1999, and the total cost is
expected not to exceed $500,000. However, we can provide no assurance that the
total cost will not exceed $500,000. We believe that modifications to existing
software and conversions to new software will not pose significant operational
problems for computer systems.
We also believe that, once we remediate our business software applications,
as well as other equipment with embedded technology, the Y2K issue will not
present a materially adverse risk to our future consolidated results of
operations, liquidity and capital resources. However, if such remediation is not
completed in a timely manner or the level of timely compliance by key suppliers
or vendors is not sufficient, the Y2K issue could have a material adverse impact
on our operations including, but not limited to, delays in delivery of products
from third party vendors, increased operating costs, loss of customers or
suppliers, or other significant disruptions to our business. We have in place
comprehensive contingency and business continuation plans.
RECENTLY ISSUED ACCOUNTING STANDARDS
The adoption of recently issued accounting standards is not expected to
have a material impact on the Company's financial condition or results of
operations. See Note 2 -- "Recently Issued Accounting Standards" to the
Consolidated Financial Statements for the year ended June 30, 1998 included
elsewhere in this Prospectus.
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OUR BUSINESS
Florida Panthers Holdings, Inc. is a leading owner and operator of leisure
and entertainment/sports businesses. Our company is comprised of two business
segments: (1) leisure and recreation, which primarily consists of the ownership
of six luxury resorts, including the operation of hotels, conference facilities,
golf courses, spas, marinas and private clubs; and (2) entertainment and sports,
which includes the operations of the Florida Panthers Hockey Club, the National
Car Rental Center, a multi-purpose entertainment complex where the Panthers play
their home games, and related arena management operations. We believe each of
our businesses operates premier assets which, due to their market positions,
attract a large base of loyal customers with high disposable income, thereby
allowing us to maximize revenues and cash flows. For the twelve months ended
December 31, 1998, pro forma for acquisitions made in 1998, we generated revenue
of $362.8 million, of which $311.9 million, or 86% of total revenue, was
generated by our leisure and recreation operations and $50.9 million, or 14% of
total revenue, was generated by our entertainment and sports operations.
Adjusted EBITDA for the year ended December 31, 1998, which includes pro forma
adjustments for acquisitions made in 1998, amounted to $91.3 million.
LEISURE AND RECREATION
Our leisure and recreation operations include the ownership of six
well-known, luxury resorts with a combined 2,863 rooms. Our resorts include:
- the Boca Raton Resort and Club (Boca Raton, Florida);
- the Arizona Biltmore Hotel (Phoenix, Arizona);
- the Registry Hotel at Pelican Bay (Naples, Florida);
- the Edgewater Beach Hotel (Naples, Florida);
- the Hyatt Regency Pier 66 Hotel and Marina (Fort Lauderdale, Florida);
and
- the Radisson Bahia Mar Resort and Yachting Center (Fort Lauderdale,
Florida).
Each of our resorts shares the following competitive and operational
strengths:
- Unique, irreplaceable assets with high recognition and strong
positioning in its target markets;
- Facilities and amenities which provide multiple and diverse revenue
streams and attract upscale business and leisure customers;
- Opportunities to significantly increase revenue and cash flow through
the development of additional guest rooms and/or resort amenities and
facilities; and
- Established, or ability to initiate, club membership programs.
Our resorts have received numerous distinctions commensurate with their
leading positions within their respective markets. For example, the Boca Raton
Resort and Club received the Readers' Award as one of the "Top 25 Hotels in
North America" by Travel & Leisure magazine in 1998 and was named to Conde Nast
Traveler's Gold List in 1998. The Arizona Biltmore was also named to Conde Nast
Traveler's Gold List in 1998 and was featured in Architectural Digest in 1996.
Amenities and services at our resorts include conference facilities, golf
courses, tennis facilities, spas, fitness centers, marinas, restaurants, retail
outlets, swimming pools, and other activities and services. The diversity and
number of amenities and services at our facilities provides us with substantial
non-room revenues. For the twelve months ended December 31, 1998, approximately
57% of revenues from our leisure and recreation operations were generated from
non-room sources. In addition, our luxury amenities and services allow us to
maintain premium pricing for our rooms. For the year ended December 31, 1998,
our average daily room rate was $191.65, compared to the average daily room rate
of the luxury resort industry for this period which, according to Smith Travel
Research, was $166.05.
Our resorts' conference facilities and other amenities make them attractive
locations for group functions. Our conference facilities include over 330,000
square feet of combined conference space and we maintain our own in-house
planning and logistics capabilities. In addition, we believe the geographic
diversity of our resorts in eastern and western Florida and Arizona will allow
our sales people to market multiple resort locations to corporate and
association groups that prefer to rotate conference locations from year to year.
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We believe that there are growth opportunities at many of our resorts
because a significant portion of the land at these locations is either
undeveloped or is capable of being reconfigured for alternative uses. We expect
that the addition of new rooms and amenities will attract additional customers
as well as enable us to realize incremental revenues from our existing
customers.
We also believe that our focus on upscale business and leisure customers
and corporate group customers allows us to maximize our total revenue per
available room. It has been our experience that these customers are more likely
to use the additional amenities and facilities available at our resorts, thereby
increasing revenue. In addition, we believe that by targeting upscale customers
we are well positioned to take advantage of demographic trends (which include an
aging "baby-boom" population with increasing disposable income) creating
increased demand for luxury resorts and related amenities. We believe our
resorts will be able to capitalize on these trends given their unique nature and
location. Our ability to capitalize on these trends will be enhanced by the high
barriers to entry associated with new luxury hotel and resort development that
we expect will limit new luxury room supply.
We continue to expand and develop our Premier Club concept which was first
introduced in 1991 at the Boca Raton Resort and Club. Membership in the Boca
Raton Resort Premier Club allows Premier Club members access to the Boca Raton
Resort and Club grounds, restaurants, recreational facilities and other private
social functions, which are otherwise restricted to resort guests. The Boca
Raton Resort Premier Club currently requires an initial membership fee of
$45,000 and annual social dues starting at $2,300. Additional dues are required
for members to have access to the resort's golf and tennis facilities. Annual
cash flow from Premier Club membership fees and dues has grown from $9.8 million
in 1996 to $14.9 million in fiscal 1998. In addition, Premier Club members
generate additional revenues through the use of existing resort facilities and
services, which are available on a fee-for-use basis. We expect to expand the
Premier Club concept to our other resorts through the development of additional
amenities and membership programs.
ENTERTAINMENT AND SPORTS
Our entertainment and sports operations primarily consist of:
- Ownership and management of the Panthers, a National Hockey League
franchise; and
- Management of the National Car Rental Center, a multi-purpose
entertainment complex where the Panthers play their home games.
The Panthers began play during the 1993-1994 NHL season. The Panthers have
been a highly successful franchise, reaching the playoffs in two out of the last
three seasons and competing in the 1996 Stanley Cup Championship. The Panthers
have developed a strong fan base in South Florida, selling out all of their home
games for the 1996-1997 and 1997-1998 NHL seasons (14,700 seats per game), with
attendance for the 1998-1999 season to date averaging approximately 18,000 per
game or 92% of capacity. Since moving to the National Car Rental Center, the
Panthers' average gate receipts have ranked in the top six among NHL franchises.
The Panthers generate revenue through the sale of tickets to Panthers' home
games, the licensing of local market television, cable network, and radio
rights, from distributions under revenue-sharing arrangements with the NHL
covering national broadcasting contracts, as well as other ancillary sources
including franchise fees. In addition, we generate revenue through our
participation in the net operating income of the National Car Rental Center,
where the Panthers began playing their home games with the opening of the
1998-1999 NHL season.
From the Panthers' inception through the end of the 1997-1998 season, the
Panthers played all of their home games at the 14,700 seat Miami Arena. The size
of the Miami Arena limited the Panthers' ability to generate revenue from
additional ticket sales, concessions and merchandise sales, and unfavorable
lease terms precluded the Panthers from sharing in suite, building advertising
and parking revenue.
In June 1996, we entered into an agreement with Broward County (the owner
of the National Car Rental Center) to develop the National Car Rental Center.
The National Car Rental Center is a state-of-the-art
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multi-purpose entertainment complex strategically located in the center of South
Florida's tri-county area, which encompasses a population of approximately 4.5
million. The National Car Rental Center has a seating capacity of 19,500 for
hockey games, over 30% more than the Miami Arena, including 72 luxury suites and
2,400 premium club seats. For the 1998-1999 season, the Panthers have sold
season tickets for 15,500 of the arena's 19,500 seats. In addition, all of the
luxury suites have been pre-sold under multi-year contracts.
The National Car Rental Center provides a variety of revenue streams to us,
including suite and premium club seat sales, building advertising, parking,
concessions, and net revenues generated from other entertainment events held at
the arena. Many of these revenue streams are committed to on a multi-year basis.
We have entered into a 30-year operating agreement with Broward County regarding
the National Car Rental Center pursuant to which we are entitled to retain (1)
95% of all revenue derived from the sale of general seating tickets to the
Panthers' home games and 100% of certain other hockey-related advertising and
merchandising revenue and (2) the first $14.0 million of net operating income
generated by the National Car Rental Center, on an annual basis, and 80% of all
net operating income in excess of $14.0 million generated by the National Car
Rental Center, with Broward County receiving the remaining 20%. Due to its
central location, state-of-the-art facilities and large seating capacity, we
have already booked over 140 events for the National Car Rental Center,
including performances by Celine Dion, Elton John, Billy Joel and the Rolling
Stones.
BUSINESS STRATEGY
Our objective is to maximize our cash flow from and the value of our
businesses by:
- CONTINUING INTERNAL GROWTH THROUGH CAPITAL IMPROVEMENTS AT OUR
RESORTS. We believe that our resorts have the opportunity for continued
internal growth. At the time we acquired our resorts, each resort had
on-going or recently completed expansion and/or improvement programs. In
addition, we have continued to make capital improvements at the resorts
after we acquired them. We believe these capital improvements have and
will continue to improve our revenue and cash flow per available room. In
addition to normal recurring maintenance capital expenditures over the
past four years, $139.2 million has been invested in our resorts to:
-- Construct a new conference center, as well as replace one of the
existing golf courses with a championship course and add a
state-of-the-art tennis and fitness center at the Boca Raton Resort
and Club (completed in 1998);
-- Undertake a property-wide renovation (completed in 1996), add a spa
complex (completed in 1997) and add 122 additional rooms and an
Olympic size swimming pool (expected completion June 1999) at the
Arizona Biltmore Hotel;
-- Renovate all of the guest rooms at the Hyatt Regency Pier 66 Hotel
and Marina (completed in 1998);
-- Complete an extensive renovation project primarily relating to guest
rooms and the relocation of meeting space and restaurants at the
Radisson Bahia Mar Resort and Yachting Center (completed in 1995);
and
-- Redesign the Grande Oaks Golf Club (formerly known as Rolling Hills
Golf Club), a private golf club and important component of our Fort
Lauderdale private club program, which will also serve as an
additional amenity for our Hyatt Regency Pier 66 Hotel and Marina and
Radisson Bahia Mar Resort and Yachting Center resorts in Fort
Lauderdale (completed in March 1999).
We believe that these capital expenditures have resulted in increases to
our average daily room rates and have attracted higher spending
corporate and group guests resulting in increased total revenue per
available room. For the year ended December 31, 1998, our average daily
room rate was $191.65, our room revenue per available room was $131.06
and our total revenue per available room was $299.37. For the year ended
December 31, 1997, our average daily room rate was $179.63, our room
revenue per available room was $123.59 and our total revenue per
available room was $270.88. These
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statistics compare favorably to the luxury resort industry which,
according to Smith Travel Research, achieved an average daily room rate
of $166.05 and room revenue per available room of $120.69 in 1998.
In addition, most of our resorts possess substantial available land for
additional development. We expect to undertake additional capital
improvements at our resorts which, subject to the availability of
capital on terms suitable to us, may include:
-- Development of a new championship golf course in Naples, Florida;
-- The addition of 114 luxury guest rooms, the renovation of 100 guest
rooms, as well as the addition of a spa complex and 30,000 square
feet of retail space at the Boca Raton Resort and Club;
-- A new pool complex at the Registry Hotel at Pelican Bay; and
-- Development of a new pool, cabana club and a private club restaurant,
as well as a spa expansion at the Hyatt Regency Pier 66 Hotel and
Marina.
- EXPANDING PREMIER CLUB CONCEPT TO OTHER LOCATIONS. We expect to extend
the Premier Club concept to our other resorts, which we believe will
allow us to generate substantial incremental revenues from existing or
planned facilities and services. We anticipate that the Premier Club will
allow us to market resort properties, restaurants, pools, and where
available, tennis, golf, spas and other leisure and recreational
amenities to residents in local communities in a country club/social club
setting.
- SEEKING CROSS-MARKETING OPPORTUNITIES. We believe our current portfolio
of luxury resorts provides us with cross-marketing opportunities. For
example, corporate and other group customers that hold conferences on a
regular basis often rotate their conference locations among various
regions of the U.S. By offering a significant number of affiliated luxury
resort alternatives to our corporate and group customers, we believe that
we will be able to encourage them to use our resorts on a regular basis.
- CAPITALIZING ON INTEGRATION OF RECENT ACQUISITIONS. We believe the
integration of certain aspects of our resort operations will allow us to
capitalize on our experienced management team, as well as to realize
significant operating efficiencies. Each member of our leisure and
recreation senior management team has over 20 years of experience in the
resort and real estate industries. We believe our management team's
ability to develop incremental revenue streams and generate cash flow
growth has been demonstrated by the success of the Boca Raton Resort and
Club. In addition, we believe the management of all of our resorts by a
single management team, with established practices and systems, will
improve the efficiency of our resort operations. We are focusing on
integrating the operations of all of our resorts, including reservations,
purchasing, training, information systems, insurance and marketing, in
order to achieve greater operating efficiencies and improved profit
margins.
- MAXIMIZING OPPORTUNITIES AT THE NATIONAL CAR RENTAL CENTER. We believe
the National Car Rental Center, which was completed in October 1998, will
significantly increase our ability to market and profit from the
Panthers. In addition, we believe our ability to participate in the
revenues from non-hockey events held at the National Car Rental Center
will increase the cash flow from our entertainment and sports operations.
We participate in all of the revenues from the National Car Rental
Center, including revenues from the sale of Panthers tickets, the leasing
of luxury suites and premium club seats, arena advertising and
sponsorships, food and beverage concessions, parking, as well as revenue
from other entertainment events.
- EVALUATING OPPORTUNISTIC ACQUISITIONS/DIVESTITURES. We continuously
evaluate ownership, acquisition and divestiture alternatives relating to
our two business segments with the intention of maximizing value.
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LEISURE AND RECREATION BUSINESS
RESORT INDUSTRY OVERVIEW
We believe our luxury resorts compete most directly with "luxury resort"
hotels, which are defined by Smith Travel Research as resorts whose average
daily room rate is in the top 15% of their resort markets. According to Smith
Travel Research, as of December 31, 1998 there were approximately 334 luxury
resorts in the United States, consisting of approximately 131,715 rooms. The
room supply in the luxury resort segment of the hotel and lodging industry has
been characterized by low growth from 1994 to 1998, having increased at a
compounded annual rate of 1.7%. However, room revenue for this luxury resort
segment grew at a compounded annual rate of approximately 8.4% between 1994 and
1998, which we believe reflects increased demand.
The following tables set forth information on the U.S. lodging industry*:
<TABLE>
<CAPTION>
ROOM SUPPLY(1) ROOM DEMAND(2)
TOTAL ----------------------------------------- --------------------------------------
PROPERTIES CAGR CAGR
--------------- --------- ----------
1994 1998 1994 1998 1994-1998 1994 1998 1994-1998
------ ------ ------------- ------------- --------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
US Luxury Resorts......... 314 334 44,636,821 47,765,724 1.7% 31,665,627 34,717,534 2.3%
US Lodging Industry....... 31,176 35,702 1,200,493,445 1,339,304,898 2.8% 777,194,087 855,716,418 2.4%
</TABLE>
<TABLE>
<CAPTION>
ROOM REVENUE(3) REVPAR(4)
-------------------------- OCCUPANCY AVERAGE DAILY -----------------------------
CAGR PERCENTAGE ROOM RATE CAGR
---------- ----------- ----------------- ----------
1994 1998 1994-1998 1994 1998 1994 1998 1994 1998 1994-1998
----- ----- ---------- ---- ---- ------- ------- ------ ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
US Luxury Resorts........ $ 4.2 $ 5.8 8.4% 70.9% 72.7% $133.70 $166.05 $94.85 $120.69 6.2%
US Lodging Industry...... 49.1 66.7 8.0% 64.7% 63.9% 63.15 77.98 40.89 49.82 5.1%
</TABLE>
- -------------------------
* All data taken from Smith Travel Research.
(1) Room Supply is defined as the sum of total available rooms each day for the
entire year.
(2) Room Demand is defined as the sum of available rooms occupied each day for
the entire year.
(3) Room revenue is defined as the aggregate revenue generated by room rentals
during the period indicated. This data is presented in billions.
(4) RevPAR is defined as room revenue per available room and is calculated by
dividing room revenue by the number of available rooms.
We believe that demand in the luxury resort sector will continue to
increase in the future as a result of the following key demographic trends:
- Growth in the population over 40 years old which is expected to increase
22% from 113 million presently to 138 million in the year 2010;
- Increases in leisure time and disposable income that are expected to
occur as the "baby-boom" generation matures;
- Increasing popularity of golf, spas, boating and restaurant dining; and
- Increasing corporate demand for quality, full-service facilities which
combine both group meeting facilities and recreational amenities.
The luxury resort segment is characterized by a large number of independent
owners, with approximately 54% of all luxury resort hotels being operated
independent of chain affiliations. In addition, there has been limited new
luxury resort construction since 1994, due to the substantial barriers to entry
relating to the industry. These barriers include the difficulty of finding
suitable property for such resorts, the time involved in obtaining zoning and
regulatory permits and approvals, and, the significant costs, coupled with
development and holding periods, associated with building such resorts.
The upscale customer base that typically patronizes the luxury resort
segment is desirable because the customer base allows the resorts to benefit
from the key demographic trends creating demand for luxury resorts and related
amenities described above.
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OUR RESORTS
Our leisure and recreation operations consist of six resort properties: the
Boca Raton Resort and Club, the Arizona Biltmore Hotel, the Registry Hotel at
Pelican Bay, the Edgewater Beach Hotel, the Hyatt Regency Pier 66 Hotel and
Marina and the Radisson Bahia Mar Resort and Yachting Center. The following
table sets forth a summary of the key features at our resorts:
<TABLE>
<CAPTION>
NO. OF CONFERENCE NO. OF NO. OF NO. OF NO. OF NO. OF
ROOMS/ SPACE GOLF TENNIS SWIMMING BOAT FOOD & RETAIL
ACRES SUITES SQ. FT. COURSES COURTS POOLS SLIPS BEV. SITES SHOPS
----- ------ ----------- ------- ------ -------- ----- ---------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Boca Raton Resort and
Club.................... 298 963 190,000 4(2) 30 5 25 15 14
Arizona Biltmore Hotel.... 39 620(1) 60,000 2(3) 8 6(6) -- 5 6
Registry Hotel at Pelican
Bay..................... 15 474 38,000 2(4) 15 3 -- 7 7
Edgewater Beach Hotel..... 2 126 3,600 2(4) -- 1 -- 2 1
Hyatt Regency Pier 66
Hotel and Marina........ 23 380 22,000 --(5) 2 3 142 6 3
Radisson Bahia Mar Resort
and Yachting Center..... 40 300 20,000 --(5) 4 1 350 2 5
--- ----- ------- -- -- -- --- -- --
417 2,863 333,600 8 59 19 517 37 36
=== ===== ======= == == == === == ==
</TABLE>
- -------------------------
(1) Excludes 122 rooms currently under construction which are expected to be
completed June 1999.
(2) Boca Raton Resort and Club maintains two 18-hole golf courses on premises.
In addition, the resort has access to two 18-hole golf courses through use
agreements.
(3) Arizona Biltmore Hotel has access to two 18-hole golf courses through use
agreements.
(4) The Registry Hotel at Pelican Bay and the Edgewater Beach Hotel have access
to the same two 18-hole golf courses through use agreements. In the future,
guests will also have access to the Grey Oaks Country Club 18-hole golf
course. Grey Oaks is owned by our company and is currently under
development.
(5) Hyatt Regency Pier 66 Hotel and Marina and Radisson Bahia Mar Resort and
Yachting Center will have access to the Grande Oaks Golf Club, a golf course
we own which was recently renovated and is expected to open in April 1999.
(6) Excludes a new Olympic size swimming pool which is expected to be completed
in June 1999.
Boca Raton Resort and Club
- Date Acquired. June 1997.
- Description. Boca Raton Resort is a destination luxury resort and
private club located on over 298 acres of land fronting both the Atlantic
Ocean and Intracoastal Waterway in Boca Raton, Florida. Boca Raton Resort
offers luxury accommodations and amenities to group conference customers,
leisure travelers and the members of its exclusive and private country
and social club known as the Premier Club. Boca Raton Resort consists of
the Cloister, the Tower, Boca Beach Club, the Golf Villas and Boca
Country Club.
- Rooms. Boca Raton Resort currently consists of 963 luxury guest rooms.
- Amenities. Amenities at Boca Raton Resort include a 50,000 square foot
conference center, a separate 140,000 square foot conference facility,
two 18-hole championship golf courses, a 30-court tennis facility, five
swimming pools, a 25-slip marina, a fitness center, an indoor basketball
court, two indoor racquetball courts and a half mile of private beach
with various water sports facilities. Other amenities of Boca Raton
Resort include 15 food and beverage sites, ranging from 5-star cuisine to
beach-side grills.
- Renovations/Expansion. In January 1998, Boca Raton Resort completed a
$46.5 million expansion and renovation project which included: (1) a new
140,000 square foot conference facility; (2) a state-of-the-art tennis
and fitness center complex; (3) a new Bates-designed 18-hole golf course,
replacing one of its previous 18-hole golf courses; and (4) an expanded
650-space parking facility. The completion of the conference center
allows Boca Raton Resort to accommodate more than one large group at a
time, resulting in better utilization of its luxury guest rooms.
- Distinctions. Boca Raton Resort has consistently been awarded the
Readers' Award as one of the "Top 25 Hotels in North America" by Travel &
Leisure magazine and was named to Conde Nast Traveler's Gold List in 1998
and recognized in Executive Travel Magazine as one of the Top 3 Hotels of
the Americas in 1998.
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Arizona Biltmore Hotel
- Date Acquired. March 1998.
- Description. Arizona Biltmore is a luxury resort located on 39 acres in
Phoenix, Arizona.
- Rooms. The resort currently consists of 620 luxury guest rooms.
- Amenities. Amenities at the Arizona Biltmore include state-of-the-art
conference facilities capable of accommodating up to 2,600 people, five
restaurants and food and beverage sites, six retail shops, an 18-hole
putting course, eight tennis courts, six swimming pools, and a 20,000
square foot spa complex, as well as privileges to play at two 18-hole golf
courses.
- Renovations/Expansion. Arizona Biltmore completed a $50.0 million
property-wide renovation and expansion program in 1996 and added the spa
complex in late 1997. A $12.0 million expansion is currently underway
which will include 122 additional luxury guest rooms and an Olympic size
swimming pool. The expansion is expected to be completed by June 1999.
- Distinctions. The property was featured in Architectural Digest in 1996,
was awarded the 1997 and 1998 Heritage Award of Excellence by the Urban
Land Institute, was featured in Historic Traveler Magazine in 1998 and was
named to Conde Nast Traveler's Gold List in 1998.
- Management Agreement. We are a party to a management agreement with AZB
Limited Partnership to manage the Arizona Biltmore which expires in April
2008. This agreement provides for an annual management fee of $1.0 million
through April 2001 and $500,000 thereafter.
Registry Hotel at Pelican Bay
- Date Acquired. August 1997.
- Description. Registry Hotel is a luxury resort located on 15 acres of
land fronting the Gulf of Mexico in Naples, Florida.
- Rooms. Registry Hotel consists of 474 luxury guest rooms.
- Amenities. Amenities at the resort include a 38,000 square foot
conference center, a 15-court tennis facility, a nature reserve boardwalk,
water sports and beach amenities, as well as seven restaurants and food
and beverage sites and retail shops.
- Distinctions. Registry Hotel has consistently received the Mobile Travel
Guide's Four Star Award, as well as the AAA's Four Diamond Award, and was
cited in 1998 by Conde Nast Traveler magazine as one of the Top 50 U.S.
Mainland Resorts. The Registry Hotel was also awarded Tennis magazine's 50
Greatest U.S. Tennis Resorts for 1998.
Edgewater Beach Hotel
- Date Acquired. April 1998.
- Description. Edgewater Beach Hotel is the only all-suite beach resort
located in Naples, Florida and is situated on a two-acre site surrounding
a tropical courtyard and fronting the Gulf of Mexico.
- Rooms. Edgewater Beach Hotel consists of 126 luxury suites.
- Amenities. Amenities at the resort include a pool, a fitness center,
water sports and other beach amenities, three conference rooms and a
penthouse gourmet restaurant.
- Renovations/Expansion. In 1997, Edgewater Beach Hotel completed a
four-year, $2.2 million renovation of its 126 luxury suites, along with
improvements to its amenities.
- Distinctions. In 1998, Edgewater Beach Hotel was featured in Resorts and
Great Hotels and received Wine Spectator magazine's Award of Excellence.
In 1995, the resort was named to Conde Nast
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Traveler's Best Places to Stay in the World and has consistently received
the Mobile Travel Guide's Four Star Award and the AAA's Four Diamond
Award.
- Management Agreement. We are a party to a management agreement with
Coral Beach Hotel Management to manage Edgewater Resort which expires in
October 1999. The agreement requires annual fees equal to 2% of total
revenue. We do not expect to renew this management agreement and
anticipate providing these services internally.
Hyatt Regency Pier 66 Hotel and Marina
- Date Acquired. March 1997.
- Description. Hyatt Regency Pier 66 is a luxury resort and marina complex
located on 23 acres of land fronting the Intracoastal Waterway in Fort
Lauderdale, Florida.
- Rooms. Hyatt Regency Pier 66 consists of 380 luxury guest rooms.
- Amenities. Amenities at the resort include a 22,000 square feet of
conference space, a spa and health club, a 142-slip marina, three swimming
pools, six restaurants and food and beverage sites and three retail shops.
- Renovations/Expansion. Hyatt Regency Pier 66 recently underwent an $8.4
million renovation of its guest rooms, which was in late 1998.
- Distinctions. Hyatt Regency Pier 66 has consistently received the Mobil
Travel Guide's Four Star Award, the AAA's Four Diamond Award, Successful
Meetings Magazine's Pinnacle Award in 1998 and Meetings and Conventions
Gold Key Award in 1998.
- Franchise Agreement. Upon the acquisition of Hyatt Regency Pier 66, we
assumed the rights under a 20-year franchise agreement with Hyatt
Franchise Corporation. The Hyatt franchise agreement terminates in
November 2014. The Hyatt franchise agreement provides for the payment of
monthly royalty fees equal to 5% of gross room revenue. The Hyatt
franchise agreement provides for the payment to Hyatt of certain Hyatt
"allocable chain expenses" based on the total number of guest rooms at
Hyatt Regency Pier 66 compared to the average number of guest rooms in all
Hyatt hotels in the United States. A fee for the use of the Hyatt
reservation system is also charged to Hyatt Regency Pier 66.
The Hyatt franchise agreement also requires that a reserve, equal to 4%
of gross room revenue, is maintained by Hyatt Regency Pier 66 for
replacement of furniture, fixtures and equipment and for those repairs
and maintenance costs which are capitalizable under generally accepted
accounting principles. The franchise agreement requires significant
renovations of guest rooms, corridors and other public areas every five
to six years. The replacement of other furniture, fixtures and equipment,
as defined in the agreement, is to occur every 10 to 12 years.
- Management Agreement. In March 1999, we acquired the management company
that manages Hyatt Regency Pier 66.
Radisson Bahia Mar Resort and Yachting Center
- Date Acquired. March 1997.
- Description. Radisson Bahia Mar is a waterfront resort and marina
complex located on 40 acres of land fronting the Atlantic Ocean and the
Intracoastal Waterway in Fort Lauderdale, Florida.
- Rooms. Radisson Bahia Mar consists of 300 guest rooms.
- Amenities. Amenities at the resort include 20,000 square feet of
conference space, a 350-slip marina, four tennis courts, two restaurants
and retail shops.
- Renovations/Expansion. Radisson Bahia Mar completed an extensive $8.1
million renovation project in 1995 relating primarily to its guest rooms
and the relocation of its meeting space and restaurants.
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- Distinctions. Radisson Bahia Mar has consistently received the Mobile
Travel Guide's Three Star Award and the AAA's Three Diamond Award, as well
as the 1995 Radisson President's Award and the 1998 Anchor Award presented
by Marine Industries Association of South Florida. The Radisson Bahia Mar
marina is host to the International Boat Show, an annual six-day boating
and marine event, which is billed as the world's largest in-water boat
show.
- License Agreement. Upon the acquisition of Radisson Bahia Mar, we
assumed the rights under the Radisson license agreement with Radisson
Hotels International, Inc., which expires in July 2004. The terms of the
Radisson license agreement allow us to operate the hotel using Radisson's
proprietary hotel management system. Annual fees payable to Radisson
pursuant to the Radisson license agreement are 5% of gross room sales.
- Management Agreement. In March 1999, we acquired the management company
that manages Radisson Bahia Mar.
- Leases. The site of the resort is subject to a land lease which expires
in 2062.
In addition to the above resort properties, we also own the following country
club:
Grande Oaks Golf Club
- Date Acquired. November 1997.
- Description. Grande Oaks Golf Club is located in Davie, Florida.
Following the completion of renovations, the Grande Oaks Golf Club will
have an 18-hole championship golf course. Grande Oaks will be a private
golf course as well as an additional amenity for our Hyatt Regency Pier 66
Hotel and Marina and Radisson Bahia Mar Resort and Yachting Center resorts
in Fort Lauderdale.
- Renovations/Expansion. The property recently underwent a $13.7 million
renovation. The property features a redesigned 18-hole championship golf
course, a par three golf course, a new practice facility and a
state-of-the-art clubhouse. The facility is expected to open to a limited
customer base in April 1999 and will have its grand opening shortly
thereafter.
ENTERTAINMENT AND SPORTS BUSINESS
PROFESSIONAL HOCKEY LEAGUE OVERVIEW
The NHL was established in 1917 and comprises 27 professional hockey teams
based in major cities in the U.S. and Canada. The NHL has continued to grow in
popularity, as evidenced by attendance of approximately 18.8 million and record
revenues from ticket sales of approximately $613.0 million during the 1997-1998
season, compared to attendance of approximately 13.2 million and ticket sales of
approximately $300.0 million during the 1987-1988 season, and an increase in
gross retail sales of NHL licensed merchandise in the United States from
approximately $45.0 million in 1988 to approximately $1.0 billion in 1997-1998.
The growing popularity of hockey is further evidenced by the $80.0 million
franchise fee for the new NHL expansion teams to enter the league between 1998
and 2000, a 60% increase from the $50.0 million the Panthers paid in 1993. In
addition, the NHL recently agreed to a five-year $600.0 million national
television contract with ABC and ESPN, which will be shared equally among the
NHL teams. The new contract will begin with the 1999-2000 season and will be
approximately three times the dollar amount of the NHL's existing television
contract.
OUR HOCKEY OPERATIONS
Our hockey operations primarily consist of the ownership and operation of
the Panthers. We derive our hockey revenue principally from the sale of tickets
to the Panthers' home games and national and local broadcasting of Panthers
games and corporate sponsorship, advertising and promotion. Receipts from
tickets, broadcasting, advertising and promotions associated with the Panthers
are recorded as revenue on a per game basis over the NHL regular season. The
Panthers receive all revenues from the sale of tickets to the 41 regular season
home games and no revenues from the sale of tickets to the 41 regular season
away games. During the exhibition season we retain all the revenue from
Panthers' home games and share in the revenue from certain exhibition games
played at neutral sites. If the Panthers make the playoffs, the team receives
revenues from
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the sale of tickets to home playoff games, with a portion of such ticket revenue
used for league operating costs and shared with the opposing team.
The Panthers share equally with the other member clubs in expansion
franchise fees as well as in the NHL broadcasting contracts with Fox
Broadcasting Co., ESPN, Inc. and Molson Breweries of Canada Limited, and they
also have in place a local broadcasting contract with SportsChannel Florida
Associates, a Florida limited partnership, 70.0% of which is owned by H. Wayne
Huizenga, the Chairman of our Board of Directors. At the Miami Arena, we
generated revenue from the sale of advertising in certain limited locations. In
contrast, the Panthers will share in all arena advertising, parking and
concessions at the National Car Rental Center.
The National Hockey League Governance. The NHL is generally responsible
for regulating the conduct of its members. The NHL establishes the regular
season and playoff schedules of the teams. It also negotiates, on behalf of its
members, the league's national over-the-air and cable television contracts and
the collective bargaining agreement with the NHL Players' Association. Each of
the members of the NHL is, in general, jointly and severally liable for the
league's liabilities and obligations and shares in its profits. Under the terms
of the NHL constitution and bylaws, league approval is required under certain
circumstances, including in connection with the sale or relocation of a member.
The NHL and the NHL Players' Association entered into the NHL Collective
Bargaining Agreement on August 11, 1995, which took retroactive effect as of
September 16, 1993. The NHL Collective Bargaining Agreement, as amended, expires
in September 2004. The Panthers will be required to provide appropriate security
by September 1, 2001 to ensure a $10.0 million payment to the NHL's collective
bargaining fund by April 15, 2003. The purpose of the fund is to strengthen the
NHL's bargaining position, if necessary, upon the expiration of its current
Collective Bargaining Agreement in September 2004. The Panthers' contribution
will be returned upon the execution of a new collective bargaining agreement.
Although we can provide no assurances, we believe the Panthers can obtain
sufficient financial resources to fund the required $10.0 million payment by
April 15, 2003.
Restrictions On Ownership. The NHL constitution and bylaws contain
provisions which may in some circumstances operate to prohibit a person from
acquiring our Class A common stock, thereby affecting its value. In general, any
acquisition of shares of Class A common stock which will result in a person or a
group of persons holding a 5.0% or more interest in our company, and each
acquisition of shares of Class A common stock which will result in a person or a
group of persons holding any multiple of a 5.0% interest, will require the prior
approval of the NHL, which may be granted or withheld in the sole discretion of
the NHL. In addition, no person who directly or indirectly owns any interest in
a privately-held NHL team, or a 5.0% or more interest in any other publicly-held
NHL team, may own, directly or indirectly, a 5.0% or more interest in our
company, without the prior approval of the NHL. Furthermore, the Panthers may
not grant a security interest in any of its assets, nor may any stockholder who
owns 5.0% or more of the Panthers' equity securities pledge such securities,
without the prior approval of the NHL, which may be withheld in the NHL's sole
discretion. In connection with any such grant or pledge, the NHL will require a
consent agreement satisfactory to the NHL.
Control Requirement. Unless otherwise permitted by the NHL, H. Wayne
Huizenga is required to maintain voting control of our company at all times. We
issued to Mr. Huizenga shares of Class B common stock, par value $.01 per share
to satisfy the control requirements of the NHL. On each matter submitted for
stockholder approval, each share of Class B common stock is entitled to 10,000
votes while each share of Class A common stock is entitled to one vote.
ARENA OPERATIONS
National Car Rental Center. In June 1996, we entered into a 30-year
license agreement and co-terminus operating agreement with Broward County
pursuant to which we have rights to manage and operate the National Car Rental
Center. Pursuant to the terms of the operating agreement, we are entitled to
retain (1) 95% of all revenue derived from the sale of general seating tickets
to the Panthers' home games and all of certain other hockey-related advertising
and merchandising revenue and (2) the first $14.0 million of net
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operating income generated by the National Car Rental Center and 80% of all net
operating income in excess of $14.0 million generated by the National Car Rental
Center, with Broward County receiving the remaining 20%. "Net operating income"
is defined to include (1) all other revenue from the arena, including revenue
from premium seating (which includes luxury suites and club seating), building
naming rights, non-hockey related advertising, food and beverage concessions,
parking and all other revenue generated from non-hockey events, less (2) arena
operating and certain financing costs and reserves. We have contracted with
Leisure Management International, Inc., an arena operating company owned 50% by
Mr. Huizenga, to manage and operate the National Car Rental Center for $250,000
annually.
Miami Arena. We own approximately 78% of the partnership interests in
Decoma Miami Associates, Ltd., which derives all of its revenue from operating
the Miami Arena. Revenue is derived from seat use charges imposed on tickets
sold at the Miami Arena, net of fixed and variable operating payments. The Miami
Arena has a seating capacity of 14,703, and is where the Panthers played its
home games through the 1997-1998 NHL season and where the Miami Heat will play
its home games through the 1999-2000 basketball season. The size of the Miami
Arena limited our ability to generate revenue from additional ticket sales,
concessions and merchandise sales and unfavorable Panthers' hockey club lease
terms precluded us from sharing in suite, building advertising and parking
revenue. A new arena is currently under construction to serve as home to the
Miami Heat beginning with the 2000-2001 NBA season. We do not expect the loss of
the Miami Heat as primary tenant at the Miami Arena upon completion of their new
arena to have a material adverse effect on us.
Ice Rinks. As part of our strategy to capitalize on the popularity of
hockey, we currently operate Incredible Ice and Gold Coast Ice Arena, two ice
rinks located in South Florida. Incredible Ice and Gold Coast Ice Arena are open
to the general public and derive their revenue from, among other things, fees
charged to the public for use of the facilities for various hockey and skating
programs, open skating sessions, food and beverage sales and retail merchandise
sales.
CUSTOMERS AND MARKETING
Leisure and Recreation Business. The core customer base for our leisure
and recreation business consists of corporate and other group customers,
affluent local residents, individual business travelers and upscale leisure
travelers. Our marketing efforts focus on increasing business with existing
customers as well as increasing our upscale clientele. Our marketing efforts
involve (1) use of our sales force to develop national corporate and other group
business for the resort facilities by focusing on identifying, obtaining and
maintaining corporate and other group accounts whose employees conduct business
nationwide and (2) our use of advertisements that target individual business
travelers and upscale leisure travelers in magazines such as Conde Nast
Traveler, Travel and Leisure, Travel Weekly and Meetings and Conventions as well
as newspapers such as The New York Times. Our franchised resorts also benefit
from the strong distribution resulting from the national reservation systems of
the franchisors of the Hyatt and Radisson brands.
Entertainment and Sports Business. We market the Panthers to both their
local fan base in South Florida as well as to corporate sponsors. We intend to
capitalize on the increasing popularity of hockey by continuing to advertise and
market the Panthers as well as continuing to enhance the service and
entertainment provided at games. We also plan to develop and enhance our
relationships with corporate sponsors through the sale of ticket and suite
packages, advertising space and additional corporate sponsorship programs. In
addition, we plan to promote and book a variety of additional sports and
entertainment events at the National Car Rental Center.
COMPETITION
Leisure and Recreation Business. The resort and hotel industry is highly
competitive. Competitive factors within the resort and hotel industry include
room rates, quality of accommodations, service levels, convenience of location,
reputation, reservation systems, name recognition, and availability of
alternative resort and hotel operations in local markets. We face competition
from a variety of resort and hotel operations, as well as country and other
social clubs, many of which have greater financial and other resources than us.
An
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increase in the number of our competitors' resorts could have a material adverse
effect on the levels of occupancy and average room rates of our resorts.
Further, there can be no assurance that new or existing competitors will not
significantly reduce their rates or offer greater convenience, services or
amenities or significantly expand, improve or develop facilities in the markets
in which the resort facilities compete, thereby adversely affecting our resort
and hotel operations.
Entertainment and Sports Business. The Panthers compete for entertainment
and sports dollars not only with other major league sports, but also with
college athletics and other sports-related entertainment. During portions of its
season, the Panthers experience competition from professional basketball (the
Miami Heat), professional football (the Miami Dolphins) and professional
baseball (the Florida Marlins). Mr. Huizenga currently controls the Miami
Dolphins. In addition, minor league sports franchises (including minor league
hockey), colleges and universities, as well as public and private secondary
schools in South Florida, offer a full schedule of athletic events throughout
the year. The Panthers also compete for attendance and advertising revenue with
a wide range of other entertainment and recreational activities available in
South Florida. Additionally, subject to the terms of the NHL Collective
Bargaining Agreement and other agreements between the NHL and other entities,
the Panthers competes with other NHL and non-NHL teams, professional and
otherwise, for available players.
INSURANCE
We maintain comprehensive insurance on our resorts, including liability,
business interruption, fire and extended coverage, in the types and amounts we
believe are customary to the resort and hotel industry. Nonetheless, there are
certain types of losses, generally of a catastrophic nature, that may be
uninsurable or not economically feasible to insure. We use our discretion in
determining amounts, coverage limits and deductibility provisions of insurance,
with a view to obtaining appropriate insurance on the resorts at a reasonable
cost and on suitable terms. This may result in insurance coverage that, in the
event of loss, might not be sufficient to pay the full current market value or
current replacement value of our lost investment. In addition, in the event of
such loss the insurance proceeds received by us might not be adequate to restore
our economic position with respect to the resorts.
The Panthers maintain disability insurance for certain highly compensated
players, which insurance provides for up to 80% salary reimbursement after the
player misses 30 consecutive regular season games due to injury. In the event an
injured player is not insured or disability insurance does not cover the entire
amount of the injured player's salary, we may be obligated to pay all or a
portion of the injured player's salary. We maintain comprehensive insurance on
the Incredible Ice and Gold Coast Ice Arena facilities, including liability,
fire and extended coverage, in the types and amounts we believe are customary to
the ice rink industry.
ENVIRONMENTAL MATTERS
Under various federal, state, and local environmental laws and regulations,
an owner or operator of real property may be liable for the costs of removal or
remediation of certain hazardous or toxic substances on such real property, as
well as for the costs of complying with environmental laws regulating on-going
operations. In connection with the ownership and operation of our properties, we
may be potentially liable for any such costs. We have obtained Phase I
environmental site assessments for the real property on which each of the
resorts is located. In addition, Phase II environmental assessments have been
conducted at several properties. Phase I assessments are intended to identify
existing, potential and suspected environmental contamination and regulatory
compliance concerns, and generally include historical reviews of the property,
reviews of certain public records, preliminary visual investigations of the site
and surrounding properties and the preparation and issuance of written reports.
Phase II assessments involve the sampling of environmental media, such as
subsurface soil and groundwater, to confirm whether contamination is present at
areas of concern identified during the course of a Phase I assessment.
The Phase I and Phase II assessments have not revealed any environmental
liability or compliance concerns that we believe would have a material adverse
effect on our business, nor are we aware of any such
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material liability or concern. However, the environmental assessments have
revealed the presence of limited areas of contamination on the properties, some
of which will require remediation. The environmental assessments have also
identified operations that are not strictly in compliance with applicable
environmental laws or that will need to be upgraded to remain in compliance with
applicable environmental laws (including the presence of underground storage
tanks at a few of the properties). The most significant areas of contamination
identified by the Phase I and Phase II assessments involve areas at the Grande
Oaks Golf Club and the company's property located in Plantation, Florida that
are currently being addressed. Pursuant to an agreement with the former owner of
such properties, we have the benefit of an indemnity that, based on currently
available information, we believe will defray the costs associated with the
investigation and remediation at these locations. Phase I and Phase II
assessments cannot provide full and complete knowledge of environmental
conditions and compliance matters. Therefore, we cannot assure you that: (1)
material environmental liabilities or compliance concerns do not exist; (2) an
identified matter that does not appear reasonably likely to be material will not
result in significantly greater expenditures than is currently anticipated; or
(3) there are no material environmental liabilities or compliance concerns of
which we are unaware.
LEGAL PROCEEDINGS
On January 28, 1997, February 4, 1997 and March 18, 1997, purported class
action lawsuits were filed against us and Messrs. Huizenga, Johnson, Rochon,
Berrard, Hudson, Dauria and Evans in the United States District Court for the
Southern District of Florida. On May 7, 1998, a consolidated and amended class
action complaint was filed combining these claims into one action. The suits
allege, among other things, that the defendants violated Section 10(b) of the
Securities Exchange Act of 1934, as amended, and Rule 10b-5 thereunder, by
making untrue statements or omitting to state important facts in connection with
sales of our Class A common stock by the plaintiff and others in the purported
class between November 13, 1996 and December 22, 1996. The suit generally seeks,
among other things, certification as a class and an award of damages in an
amount to be determined at trial. On July 17, 1998, we and the defendants moved
to dismiss this complaint for failure to state a claim. Our motion is currently
pending, and the court heard argument on the motion on May 5, 1999. Discovery is
statutorily stayed pending resolution of the motion to dismiss. We believe that
this suit is without merit and intend to defend vigorously against this suit. An
unfavorable outcome of the suit may have a material adverse effect on our
financial condition or results of operations.
On October 9, 1997, Bernard Kalishman filed a purported shareholder
derivative and purported class action lawsuit on our behalf, as nominal
defendant, against Messrs. Huizenga, Berrard, Johnson, Rochon, Hudson and Egan,
each as our director, and Richard Evans and William Torrey, both former
directors, in the Seventeenth Judicial Circuit in and for Broward County,
Florida. The suit alleges, among other things, that each of the defendants,
other than Mr. Egan, breached contractual and fiduciary obligations owed to us
and our stockholders by engaging in self-dealing transactions in connection with
our purchase of Hyatt Regency Pier 66 Hotel and Marina and Radisson Bahia Mar
Resort and Yachting Center. The suit seeks to impose a constructive trust on
alleged excessive compensation paid to the prior owners of Hyatt Regency Pier 66
and Radisson Bahia Mar, to have damages assessed against the defendants or to
rescind the transaction. The amended complaint also added claims similar to
those alleged in the class action lawsuit described in the previous paragraph
and dropped Mr. Egan as a defendant. A second amended complaint was filed on
June 26, 1998 to delete a number of allegations in order to comply with a court
order. This case is currently in the discovery phase and has not yet been set
for trial. An evidentiary hearing on the defendants' motion to dismiss the
derivative claims was concluded on April 15, 1999. Although there can be no
assurance, we currently expect a decision of the court within the next sixty
days. On February 3, 1999, the plaintiff moved to consolidate this lawsuit with
the Seiden lawsuit, which is discussed below, and to amend the complaint to add
Mr. Dauria as a defendant. The defendants have tentatively agreed to allow Mr.
Seiden to intervene in the Kalishman lawsuit, rendering moot the motion to
consolidate. The court has deferred ruling on the motion to amend the complaint
until after the April hearing. We believe that this suit is without merit and
intend to vigorously defend against this suit. An unfavorable outcome of the
suit may have a material adverse effect on the our financial condition or
results of operations.
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On January 20, 1999, Eric Seiden filed a purported shareholder derivative
and purported class-action lawsuit on our behalf, as nominal defendant, against
Messrs. Huizenga, Berrard, Johnson, Rochon, Hudson, Evans and Torrey in the
Seventeenth Judicial Circuit in and for Broward County, Florida. The suit
alleges, among other things, that each of the defendants breached contractual
and fiduciary obligations owed to us and our shareholders by engaging in
self-dealing transactions in connection with our purchase of Hyatt Regency Pier
66 and Radisson Bahia Mar. The suit seeks to impose a constructive trust on
alleged excessive compensation paid to the prior owners of Hyatt Regency Pier 66
and Radisson Bahia Mar or to have damages assessed against the defendants. The
allegations in the Seiden complaint are almost identical to the allegations in
the Kalishman complaint discussed above, except that the plaintiff does not seek
rescission of the hotel transactions. On February 3, 1999, the plaintiff moved
to consolidate the Seiden lawsuit with the Kalishman lawsuit, and to amend the
complaint to add Mr. Dauria as a defendant. The defendants have tentatively
agreed to allow Mr. Seiden to intervene in the Kalishman lawsuit, rendering moot
the motion to consolidate. The court has deferred ruling on the motion to amend
the complaint until after the April hearing in the Kalishman lawsuit. We believe
that this suit is without merit and we intend to vigorously defend against this
suit. An unfavorable outcome of the suit may have a material adverse effect on
our financial condition or results of operations.
We are not presently involved in any other material legal proceedings.
However, we may from time to time become a party to legal proceedings arising in
the ordinary course of doing business, which are incidental to our business.
EMPLOYEES
At December 31, 1998, we employed 3,105 full-time and 482 part-time
employees in connection with our leisure and recreation business. Not included
in these figures are 815 persons working as employees of the respective
management companies for Hyatt Regency Pier 66 Hotel and Marina, Radisson Bahia
Mar Resort and Yachting Center and Arizona Biltmore Hotel. We employ
approximately 100 full-time employees and 90 part-time employees in connection
with our entertainment and sports business. In addition, we employ approximately
15 corporate administrative personnel. None of these employees, other than the
Panthers hockey players, are subject to any collective bargaining agreement, and
we and the management companies believe that our relationship with employees is
good.
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MANAGEMENT
OUR EXECUTIVE OFFICERS, DIRECTORS AND KEY EMPLOYEES
The table below sets forth the names and ages of our executive officers,
directors and key employees as well as their positions and offices.
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
Executive Officers and Directors
H. Wayne Huizenga.......................... 61 Chairman of the Board
Richard C. Rochon.......................... 41 Vice Chairman of the Board and President
William M. Pierce.......................... 47 Senior Vice President, Treasurer and Chief
Financial Officer
Richard L. Handley......................... 52 Senior Vice President, General Counsel and
Secretary
Steven M. Dauria........................... 38 Vice President and Corporate Controller
Steven R. Berrard.......................... 44 Director
Dennis J. Callaghan........................ 49 Director
Michael S. Egan............................ 59 Director
Chris Evert................................ 44 Director
Harris W. Hudson........................... 56 Director
George D. Johnson, Jr...................... 56 Director
Henry Latimer.............................. 60 Director
Senior Management Team -- Leisure and Recreation Business
Michael Glennie............................ 48 Senior Vice President -- Resort Operations
Dennis J. Callaghan........................ 49 Managing Director of Development -- Resort
Division
James Applegate............................ 56 Vice President -- Golf Development
Senior Management Team -- Entertainment and Sports Business
William Torrey............................. 64 President and Governor of Florida Panthers
Hockey Club, Inc.
Alex Muxo.................................. 44 President of Arena Operating Company, Ltd., one
of our wholly-owned subsidiaries
</TABLE>
Executive Officers and Directors
H. Wayne Huizenga has been our Chairman of the Board since September 1996.
Mr. Huizenga has also served as Chairman of the Board of AutoNation, Inc.
(together with its predecessor, Republic Industries, Inc., "AutoNation"), which
owns the nation's largest chain of franchised automotive dealerships, since
August 1995. AutoNation is building a chain of used vehicle megastores and owns
National Car Rental and Alamo Rent-A-Car. Since October 1996, Mr. Huizenga has
served as Co-Chief Executive Officer of AutoNation, and from August 1995 until
October 1996, Mr. Huizenga served as Chief Executive Officer of AutoNation.
Since July 1998, Mr. Huizenga has served as a director of theglobe.com, a
leading internet on-line community. Since June 1998, Mr. Huizenga has served as
a director of NationsRent, Inc., a developing national equipment rental company
which markets products and services primarily to a broad range of construction
and industrial customers. Since May 1998, Mr. Huizenga has served as Chairman of
the Board and Chief Executive Officer of Republic Services, Inc. ("Republic
Services"), a leading provider of non-hazardous solid waste collection and
disposal services. Since January 1995, Mr. Huizenga also has served as the
Chairman of the Board of Extended Stay America, Inc. ("Extended Stay"), an
operator of extended stay lodging facilities. From September 1994 until October
1995, Mr. Huizenga served as the Vice-Chairman of Viacom Inc., a diversified
entertainment and communications company. During the same period, Mr. Huizenga
also served as the Chairman of the Board of Blockbuster Entertainment Group, a
division of Viacom. From April 1987 through September 1995, Mr. Huizenga served
as the Chairman of the Board and Chief Executive Officer of Blockbuster, during
which time he helped build Blockbuster from a 19-store chain into the world's
largest video rental company. In September 1994, Blockbuster merged into Viacom.
In 1971,
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Mr. Huizenga co-founded Waste Management, Inc. ("Waste Management"), which he
helped build into the world's largest integrated solid waste services company,
and he served in various capacities, including President, Chief Operating
Officer and a director from its inception until 1984. Mr. Huizenga also
currently owns or controls the Miami Dolphins as well as Pro Player Stadium in
South Florida. Mr. Huizenga is the brother-in-law of Mr. Harris W. Hudson.
Richard C. Rochon has been a director since September 1996 and has served
as our Vice Chairman since April 1997. Mr. Rochon became our President in April
1998. Mr. Rochon has also been the President of Huizenga Holdings, Inc., a
privately held diversified holding company controlled by Mr. Huizenga, since
1988. Prior to joining Huizenga Holdings, he was a certified public accountant
at Coopers & Lybrand, an international public accounting firm. Mr. Rochon also
currently serves as a director of Century Business Services, Inc., a provider of
out-sourced business services.
William M. Pierce has been our Senior Vice President, Treasurer and Chief
Financial Officer since March 1997 and a director of Florida Panthers Hockey
Club, Inc., the general partner of Florida Panthers Hockey Club, since November
1996. From January 1990 to March 1997, Mr. Pierce served as an officer of
Huizenga Holdings and as the chief financial officer and a director of numerous
other private companies owned by Mr. Huizenga.
Richard L. Handley has been our Senior Vice President, General Counsel and
Secretary since May 1997. Prior to joining us, Mr. Handley served as Senior Vice
President and the General Counsel of Republic Industries from October 1995 to
May 1997. From June 1993 until joining Republic Industries, he was a principal
of Randolph Management Group, Inc., a management consulting firm specializing in
the environmental industry. From July 1990 until May 1993, Mr. Handley was Vice
President, Secretary and General Counsel of The Brand Companies, Inc., an
environmental services company. From September 1985 to July 1990, Mr. Handley
held various legal positions with affiliates of Waste Management. Prior to
September 1985, Mr. Handley was a lawyer in private practice in Chicago,
Illinois.
Steven M. Dauria has served as our Corporate Controller since March 1997
and Vice President since September 1996. Mr. Dauria served as our Chief
Financial Officer from September 1996 to March 1997. Mr. Dauria also has served
as the Vice President and Chief Financial Officer of Florida Panthers Hockey
Club since July 1996. From July 1994 to July 1996, Mr. Dauria served as Director
of Finance and Administration and Chief Financial Officer of Florida Panthers
Hockey Club and, from December 1993 to July 1994, Mr. Dauria served as the
Controller of both the Florida Panthers Hockey Club and the Florida Marlins, a
major league baseball franchise. Prior to joining the Panthers, Mr. Dauria
served as the Controller of the New York Yankees, a major league baseball
franchise, from November 1991 to December 1993, and was previously associated
with Time Warner, Inc. and Coopers & Lybrand.
Steven R. Berrard has been a director since September 1996. Mr. Berrard has
been Co-Chief Executive Officer, President and a director of AutoNation since
October 1996. From March 1996 until January 1997, Mr. Berrard served as Chief
Executive Officer of AutoNation Incorporated, which owned and operated a
developing national chain of used vehicle retailing megastores, and which was
acquired by AutoNation in January 1997. While the acquisition of AutoNation
Incorporated by AutoNation was pending, from May 1996 until October 1996, Mr.
Berrard also served as a Vice President of AutoNation. From September 1994
through March 1996, Mr. Berrard served as President and Chief Executive Officer
of Blockbuster Entertainment Group. Mr. Berrard joined Blockbuster in June 1987
as Senior Vice President, Treasurer and Chief Financial Officer and became a
director of Blockbuster in May 1989, during which time he helped build
Blockbuster from a 19-store chain into the world's largest video and music
retailer. He became Vice Chairman of the Board of Blockbuster in November 1989
and served as Blockbuster's President and Chief Operating Officer from January
1993 until September 1994. In addition, Mr. Berrard served as President and
Chief Executive Officer and a director of Spelling Entertainment Group Inc., a
television and film entertainment producer and distributor, from March 1993
through March 1996 and served as a director of Viacom from September 1994 until
March 1996.
Dennis J. Callaghan. Mr. Callaghan is a director and our Managing Director
of Development -- Resort Division and has been a director of our company since
July 1997. Mr. Callaghan is responsible for overseeing
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and executing our development plans at our existing resorts. Since 1990, Mr.
Callaghan has been President of Callaghan & Partners, Ltd., an entity founded by
Mr. Callaghan to acquire, develop, finance, renovate and manage resorts, hotels
and residential and commercial properties in the United States and abroad. Prior
to our acquisition of the Boca Raton Resort and Club, Mr. Callaghan was
associated with the resort. Mr. Callaghan was appointed to our Board of
Directors in connection with the acquisition of Boca Resort.
Michael S. Egan has been a director since April 1997. Mr. Egan has served
as Chairman of Alamo Rent-A-Car, Inc. since 1973. Mr. Egan is also Chairman of
theglobe.com and of Certified Vacations, a tour company, and is a director of
Dancing Bear Investments, Inc., Nantucket Allserve, Inc., IT Acquisition Corp.
and Auto By Internet, Inc.
Chris Evert has been a director since July 1997. Since retiring from
professional tennis in 1989, Ms. Evert has served as a sports commentator and
continued to serve as a corporate spokesperson. In March 1989, Ms. Evert founded
Chris Evert Charities, Inc. and continues to be involved in its charitable
activities. Ms. Evert is the owner and head coach of the Evert Tennis Academy in
Boca Raton, Florida.
Harris W. Hudson has been a director since September 1996. Since August
1995, Mr. Hudson has served as a director of AutoNation and as Vice Chairman of
AutoNation since October 1996. He served as Chairman of AutoNation's Solid Waste
Group from October 1996 until July 1998. From August 1995 until October 1996,
Mr. Hudson served as President of AutoNation. From May 1995 until August 1995,
Mr. Hudson served as a consultant to AutoNation. From 1983 until August 1995,
Mr. Hudson founded and served as Chairman of the Board, Chief Executive Officer
and President of Hudson Management Corporation, a solid waste collection
company, which was acquired by Republic Industries in August 1995. From 1964 to
1982, Mr. Hudson served as Vice President of Waste Management of Florida, Inc.,
a subsidiary of Waste Management and its predecessor. Mr. Hudson has also served
as a director of NationsRent since June 1998 and as Vice Chairman and Secretary
and a director of Republic Services since May 1998. Mr. Hudson is the
brother-in-law of Mr. Huizenga.
George D. Johnson, Jr. has been a director since September 1996. Since
January 1995, Mr. Johnson has served as President, Chief Executive Officer and a
director of Extended Stay. From August 1993 until January 1995, Mr. Johnson
served in various executive positions with Blockbuster Entertainment Group and,
prior to its merger with Viacom, with Blockbuster, including as President of the
Consumer Products Divisions, and also as a director of Blockbuster. From July
1987 until August 1993, Mr. Johnson was the managing general partner of WJB
Video Limited Partnership, which became the largest Blockbuster franchisee with
over 200 video stores prior to its merger with Blockbuster in August 1993. Mr.
Johnson also serves as Chairman of the Board of Alrenco, Inc., and as a director
of Republic Industries and Duke Power Company.
Henry Latimer has been a director since August 1997. Since 1994, Mr.
Latimer has been a Managing Member of the Fort Lauderdale office of the law firm
of Eckert Seamans Cherin & Mellot. From 1983 to 1994, Mr. Latimer was a partner
in the Miami office of the law firm of Fine Jacobson Schwartz Nash & Block,
where he served as Managing Partner from 1993 to 1994. Prior to joining that
firm, Mr. Latimer served as a circuit judge for the 17th Judicial Circuit in and
for Broward County, Florida.
Senior Management Team -- Leisure and Recreation Business
Michael Glennie. Mr. Glennie serves as our Senior Vice President -- Resort
Division and as the President of Boca Raton Resort and Club. Prior to his
10-year tenure with Boca Resort, Mr. Glennie was Manager of the Waldorf Astoria
Hotel in New York. Glennie began his career with Rockresorts in various
management capacities (ultimately as its Chief Executive Officer) in the
Caribbean, Hawaii, and New York City. Among his accomplishments at Boca Raton
Resort and Club, Glennie introduced the concept of the Premier Club in 1991, a
club membership/resort program that has become an industry standard. Glennie
received a B.S. degree in Hotel Administration from Surrey University, England.
In 1998, Mr. Glennie was honored with the Hotelier of the World Award.
Dennis J. Callaghan. Mr. Callaghan's biography is contained in the
executive officer and director biography section presented above.
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James Applegate. Mr. Applegate joined us in October 1997 as Vice
President--Golf Development. Mr. Applegate has 20 years experience in land
acquisitions, golf course design and development and club operations. From 1986
through 1997, Mr. Applegate designed and built over 35 golf courses. From 1981
through 1985, he was Vice President of Operations for LaBonte Diversified
Development. During his tenure at LaBonte, he was responsible for, among other
things, land acquisitions and golf course development.
Senior Management Team -- Entertainment and Sports Business
William Torrey. Mr. Torrey has been the President and Governor of the
Florida Panthers Hockey Club, Inc., the corporate general partner of the
Panthers, since September 1993. Prior to joining us, Mr. Torrey was associated
with the New York Islanders Hockey Club for twenty-one years in various
capacities. From June 1989 to August 1992, Mr. Torrey served as Chairman of the
Board of the Islanders. From September 1978 to August 1992, Mr. Torrey served as
the President of the Islanders, and from February 1972 to August 1992, he served
as the General Manager of the Islanders. Mr. Torrey is a member of the Hockey
Hall of Fame, in recognition of his accomplishments as an executive.
Alex Muxo. Mr. Muxo has been the President of Arena Operating Company
Ltd., one of our wholly-owned subsidiaries, since September 1996. From January
1995 to July 1996, Mr. Muxo served as a Vice President of Huizenga Holdings.
Prior to joining Huizenga Holdings, Mr. Muxo served as a Vice President of
Blockbuster and Blockbuster Park from May 1994 to January 1995. Prior thereto,
Mr. Muxo was the City Manager of the City of Homestead, Florida. During his
tenure with the City of Homestead, Mr. Muxo directed and managed the development
of Homestead Baseball Stadium, the development of Miami MotorSports Race Track
and the substantial redevelopment and reconstruction work required as a result
of Hurricane Andrew.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
Our board of directors held seven meetings and took one action by written
consent in lieu of a meeting during the fiscal year ending June 30, 1998. No
director participated in fewer than 75% of the total sum of the number of
meetings and consent actions held during the time he or she served on our board
of directors, except for Ms. Evert who was not present for four meetings. Our
board of directors has the responsibility for establishing broad corporate
policies and for our overall performance. Our board of directors has established
an executive committee, an audit committee and a compensation committee to
assist it in carrying out its duties. Each director attended all of the meetings
of the committee in which he served.
Our executive committee, which met once during the year ended June 30,
1998, consists of Messrs. Huizenga and Rochon, with Mr. Huizenga serving as
Chairman. Our executive committee has the authority to approve, on behalf of the
entire board of directors, by vote at a duly convened meeting of the executive
committee, or by unanimous written consent:
- any acquisition, including any acquisition of property, or the
securities and/or assets and business of any industry not involving
more than $10.0 million in cash, securities or other form of payment;
and
- any borrowing, guarantees or other transactions not involving more
than $10 million in cash, securities or other form of payment.
Our audit committee, which met twice during the year ending June 30, 1998,
consists of Messrs. Johnson and Latimer, with Mr. Latimer serving as Chairman.
The audit committee's responsibilities include:
- selecting and recommending independent auditors to the full board of
directors;
- discussing the arrangements for the scope and results of the annual
audit with management and the independent auditors;
- reviewing the scope of non-audit professional services provided by the
independent auditors; and
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- obtaining from both management and the independent auditors their
observations on our system of internal accounting controls.
Our compensation committee, which met once during the year ended June 30,
1998, consists of Messrs. Egan, Johnson and Latimer, with Mr. Egan serving as
Chairman. Our compensation committee's responsibilities include:
- reviewing our compensation philosophy and programs;
- exercising authority with respect to the payment of salaries and
incentive compensation to directors and executive officers; and
- administering our 1996 stock option plan.
DIRECTOR COMPENSATION
Directors who we also employ or were employed by one of our subsidiaries do
not receive additional compensation for serving on the board of directors. Our
current policy provides that each non-employee director receive, upon that
person's initial election as a director, an option under our stock option plan
to acquire, at the then fair market value, 25,000 shares of our Class A common
stock. Directors are also given an annual option, subject to certain limitations
under the stock option plan to acquire, at the then fair market value, 20,000
shares of our Class A common stock at each annual meeting of our stockholders at
which that director is re-elected or remains a director. The stock option plan
provides that these options will vest in four equal annual installments
beginning on the first anniversary of the date of grant, unless otherwise
provided by the board of directors or the compensation committee. We also
reimburse directors for out-of-pocket expenses incurred in their capacity as
directors in connection with meetings of the board of directors or its
committees. The board of directors will periodically review and may revise the
compensation policies for non-employee directors.
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EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following tables sets forth how we and our subsidiaries compensated,
during the fiscal years ended June 30, 1998, 1997 and 1996, the Chief Executive
Officer and each of the most highly compensated executive officers employed by
us or our subsidiaries and the capacities in which they served.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
--------------
SECURITIES
UNDERLYING
ANNUAL COMPENSATION OPTIONS TO
--------------------------------- PURCHASE
FISCAL OTHER ANNUAL CLASS A
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION COMMON STOCK
- --------------------------- ------ -------- ------- ------------ --------------
<S> <C> <C> <C> <C> <C>
H. Wayne Huizenga........................................... 1998 -- -- -- 350,000 shares
Chairman of the Board 1997 -- -- -- 100,000 shares
1996 -- -- -- --
Richard H. Evans............................................ 1998 $368,750 -- -- 75,000 shares
President(1)(4) 1997 $100,000 -- $ 5,000(2) 90,000 shares
1996 -- -- -- --
William M. Pierce........................................... 1998 $210,000 -- $ 7,919(2) 50,000 shares
Senior Vice President, Treasurer 1997 $ 52,500 -- -- 55,000 shares
and Chief Financial Officer(1) 1996 -- -- -- --
Richard L. Handley.......................................... 1998 $194,600 -- $11,980(2) 50,000 shares
Senior Vice President, General 1997 $ 18,700 -- -- 63,600 shares
Counsel and Secretary(1) 1996 -- -- -- --
Steven M. Dauria............................................ 1998 $140,000 -- $14,630(2) 20,000 shares
Vice President and Corporate 1997 $110,000 -- $15,000(2) 23,000 shares
Controller 1996 $ 90,000 $10,000(3) $14,000(2) --
</TABLE>
- -------------------------
(1) Messrs. Evans, Pierce and Handley joined us during the year ended June 30,
1997. As a result, no annual compensation is reflected for 1996.
(2) Comprised of insurance premiums which we paid on behalf of these employees.
(3) Represents bonus amounts earned in the fiscal year ended June 30, 1996 and
paid in the fiscal year ended June 30, 1997.
(4) We entered into a separation agreement with Mr. Evans, which became
effective on April 15, 1998. Under the agreement, we paid Mr. Evans
$250,000, which is included under the salary column in the above table, to
satisfy our obligation under an employment agreement with Mr. Evans.
Additionally, stock options issued to Mr. Evans under our stock option plan
will vest in accordance with the original schedule and will expire in April
2003.
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OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information concerning grants of stock
options made during the fiscal year ended June 30, 1998.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
% OF TOTAL ANNUAL RATES
NUMBER OF OPTIONS OF STOCK
SECURITIES GRANTED TO PRICE APPRECIATION
UNDERLYING EMPLOYEES FOR OPTION TERM(2)
OPTIONS IN EXERCISE EXPIRATION -----------------------
NAME GRANTED(1) FISCAL YEAR PRICE DATE 5% 10%
- ---- -------------- ----------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
H. Wayne Huizenga............................. 350,000 shares 25.0% $17.25 01/02/08 $1,301,119 $2,802,004
Chairman of the Board
Richard H. Evans.............................. 75,000 shares 5.3% $17.25 01/02/08 $ 278,811 $ 600,429
President
William M. Pierce............................. 50,000 shares 3.6% $17.25 01/02/08 $ 185,874 $ 400,286
Senior Vice President, Treasurer and Chief
Financial Officer
Richard L. Handley............................ 50,000 shares 3.6% $17.25 01/02/08 $ 185,874 $ 400,286
Senior Vice President, General Counsel and
Secretary
Steven M. Dauria.............................. 20,000 shares 1.4% $17.25 01/02/08 $ 74,350 $ 160,115
Vice President and Corporate Controller
</TABLE>
- -------------------------
(1) These options become exercisable in four equal annual installments which
commenced on January 2, 1999.
(2) As required by Securities and Exchange Commission rules, potential
realizable values are based on the assumption that our Class A common stock
will appreciate in value from the date of grant to the end of the option
term at annually compounded rates of 5% and 10%. These values are not
intended to forecast possible future appreciation, if any, in the price of
our Class A common stock.
FISCAL YEAR-END OPTION VALUE TABLE
The following table sets forth information concerning the value of stock
options at the conclusion of the fiscal year ended June 30, 1998.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
OPTIONS AT JUNE 30, 1998 JUNE 30, 1998
------------------------------ ---------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ------------- -------------- ----------- -------------
<S> <C> <C> <C> <C>
H. Wayne Huizenga........................................... 25,000 shares 425,000 shares $242,188 $1,579,688
Chairman of the Board
Richard H. Evans............................................ 22,500 shares 142,500 shares $193,125 $ 762,188
President
William M. Pierce........................................... 13,750 shares 91,250 shares $ 12,109 $ 158,203
Senior Vice President, Treasurer and Chief Financial
Officer
Richard L. Handley.......................................... 15,900 shares 97,700 shares $ -- $ 121,875
Senior Vice President, General Counsel and Secretary
Steven M. Dauria............................................ 5,750 shares 37,250 shares $ 55,703 $ 215,859
Vice President and Corporate Controller
</TABLE>
OUR STOCK OPTION PLAN
Our Amended and Restated 1996 Stock Option Plan (the "Stock Option Plan"),
is designed to attract, retain and motivate key employees and directors. The
compensation committee determines the terms and prices at which options are
granted under the Stock Option Plan, except that the per share exercise price of
the options cannot be less than the fair market value of our Class A common
stock on the date of grant. Each option is for a term of not less than five
years or more than ten years, as determined by the compensation committee. The
Stock Option Plan provides that options must vest in four equal annual
installments beginning on the first anniversary of the date of grant, unless
otherwise provided by the board of directors or the compensation committee.
However, in the event of a change of control, which is defined in the Stock
Option
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<PAGE> 84
Plan, all outstanding options become immediately exercisable. Options granted
under the Stock Option Plan are not transferable other than by will or by the
laws of descent and distribution.
Subject to an adjustment formula set out in the Stock Option Plan, we have
reserved the right to grant options to purchase an aggregate of up to 5,000,000
shares of our Class A common stock. As of February 15, 1999, we had granted, net
of cancellations, options to purchase a total of 4,526,510 shares of our Class A
common stock with exercise prices ranging from $9.31 per share to $27.30 per
share, leaving 473,490 options available for future grants. The exercise price
of each of these outstanding options is the fair market value of our Class A
common stock on the date of grant.
LIMITATION OF DIRECTORS' LIABILITY AND INDEMNIFICATION
The Delaware General Corporation Law authorizes corporations to limit or
eliminate the personal liability of directors to corporations and their
stockholders for money damages for breach of the directors' fiduciary duty of
care. Our certificate of incorporation limits the liability of our directors to
the fullest extent permitted by Delaware law. Specifically, our directors will
not be personally liable for money damages for breach of a director's fiduciary
duty as a director, except for liability:
- for any breach of the director's duty of loyalty;
- for acts or omissions not in good faith or which involve intentional
misconduct or knowing violations of law;
- under Section 174 of the Delaware General Corporation Law; or
- for any transaction from which the director derived an improper
personal benefit.
The inclusion of this provision in the certificate of incorporation may
have the effect of reducing the likelihood of derivative litigation against
directors. It may also discourage or deter stockholders or management from
bringing a lawsuit against our directors for breach of their duty of care, even
though their suit, if successful, might have benefited us and our stockholders.
This provision has no effect on any non-monetary remedies that may be available
to us or our stockholders, nor does it relieve us or our directors from
compliance with federal or state securities laws.
Our bylaws provide that we will indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action or suit by reason of the fact that he or she is or was one of our
directors or officers, or is or was serving at our request as a director,
officer, employee or agent of another entity. We will indemnify against
expenses, including attorneys' fees, actually and reasonably incurred by the
person in connection with the action or suit. In addition, we have obtained
director and officer liability insurance that insures our directors and officers
against certain liabilities.
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<PAGE> 85
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
As of April 30, 1999, H. Wayne Huizenga owned all 255,000 shares of our
Class B common stock. As a result of the ownership of such stock, as well as
Class A common stock owned by him (see table below), Mr. Huizenga has the power
to vote 98.8% of the total votes entitled to be cast on any matter submitted to
a vote of our stockholders.
The following table sets forth information regarding the beneficial
ownership of our Class A and Class B common stock, including shares which the
individuals have the right to acquire within 60 days upon the exercise of
outstanding options, exchange rights and warrants as of April 30, 1999. The
table lists: (1) each person known to beneficially own more than 5% of our Class
A common stock; (2) each of our directors; (3) each of our executive officers;
and (4) all of our directors and executive officers as a group. Unless otherwise
indicated, the address of each person or party is 450 East Las Olas Boulevard,
Fort Lauderdale, Florida 33301, our principal business address.
On April 6, 1999, we consummated the sale of 1,575,621 shares of our Class
A common stock at a price of $10.25 per share in connection with the Rights
Offering. H. Wayne Huizenga, our Chairman of the Board (or his assignees),
Richard C. Rochon, our Vice Chairman of the Board and President, George D.
Johnson, Jr., one of our directors, and William M. Pierce, our Senior Vice
President, Treasurer and Chief Financial Officer, purchased 1,463,414, 50,000,
50,000 and 5,000 shares of Class A common stock, respectively, in connection
with the Rights Offering.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP
------------------------
SHARES PERCENT(1)
---------- ----------
<S> <C> <C>
H. Wayne Huizenga(2)........................................ 6,923,296 17.9%
Huizenga Investments Limited Partnership.................... 6,033,494 15.6%
P.O. Box 50102
Henderson, Nevada 89106
The Equitable Companies Incorporated(3)..................... 3,854,950 10.0%
1290 Avenue of the Americas
New York, New York 10104
Richard C. Rochon(4)........................................ 945,062 2.4%
William M. Pierce(5)........................................ 132,545 *
Richard L. Handley(6)....................................... 43,400 *
Steven M. Dauria(7)......................................... 26,500 *
Steven R. Berrard(8)........................................ 618,822 1.6%
Dennis J. Callaghan(9)...................................... 268,140 *
Michael S. Egan(10)......................................... 158,950 *
Chris Evert(11)............................................. 8,750 *
Harris W. Hudson(12)........................................ 406,000 1.1%
George D. Johnson, Jr.(13).................................. 854,848 2.2%
Henry Latimer(14)........................................... 8,750 *
All directors and executive officers as a group (12
persons).................................................. 11,895,063 30.5%
</TABLE>
- -------------------------
* Less than 1%.
(1) The denominator used to calculate the percent of beneficial ownership for
each named stockholder is based on 38,501,996 shares of our Class A common
stock outstanding at April 30, 1999 (which includes 1,575,621 shares for
which we have accepted subscriptions in connection with the Rights
Offering), plus those shares issuable within 60 days upon exercise of any
options and immediately exercisable warrants and exchange rights.
(2) The total number of shares of Class A common stock beneficially owned by
Mr. Huizenga includes (1) 6,033,494 shares of Class A common stock owned by
Huizenga Investment Limited Partnership, a Nevada limited partnership
controlled by Mr. Huizenga, (2) 397,202 shares of Class A common stock
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<PAGE> 86
owned directly by Mr. Huizenga, (3) 100,100 shares of Class A common stock
owned by Mr. Huizenga's wife, (4) 25,000 shares of Class A common stock
underlying options, which vested on November 8, 1997, (5) 25,000 shares of
Class A common stock underlying options, which vested on November 8, 1998,
(6) 87,500 shares of Class A common stock underlying options, which vested
on January 2, 1999 and (7) 255,000 shares of Class A common stock which are
issuable upon the conversion of the Class B common stock currently held by
Mr. Huizenga. Mr. Huizenga disclaims beneficial ownership of the shares
owned by his wife.
(3) The number of shares of Class A common stock beneficially owned by The
Equitable Companies Incorporated is based solely upon a review of the
Schedule 13G/A filed on April 10, 1998 by The Equitable Companies
Incorporated.
(4) The total number of shares of Class A common stock beneficially owned by
Mr. Rochon consists of (1) 300,000 shares owned by Weezor I Limited
Partnership, a Nevada limited partnership controlled by Mr. Rochon, (2)
570,062 shares owned directly by Mr. Rochon, (3) 6,250 shares underlying
options, which vested on November 8, 1997, (4) 6,250 shares underlying
options, which vested on November 8, 1998, (5) 12,500 shares underlying
options, which vested on April 3, 1998, (6) 12,500 shares underlying
options, which vest on April 3, 1999 and (7) 37,500 shares underlying
options, which vested on January 2, 1999.
(5) The total number of shares of Class A common stock beneficially owned by
Mr. Pierce consists of (1) 113,500 shares owned directly by Mr. Pierce, (2)
45 shares owned by members of Mr. Pierce's immediate family living in the
same household as Mr. Pierce, (3) 1,250 shares underlying options, which
vested on November 8, 1997, (4) 1,250 shares underlying options, which
vested on November 8, 1998, (5) 12,500 shares underlying options which
vested on April 3, 1998, (f) 12,500 shares underlying options, which vest
on April 3, 1999 and (g) 12,500 shares underlying options, which vested on
January 2, 1999.
(6) The total number of shares of Class A common stock beneficially owned by
Mr. Handley consists of (1) 15,000 shares owned directly by Mr. Handley,
(2) 15,900 shares underlying options which vested on May 21, 1998 and (3)
12,500 shares underlying options, which vested on January 2,1999.
(7) The total number of shares of Class A common stock beneficially owned by
Mr. Dauria consists of (1) 10,000 shares owned directly by Mr. Dauria, (2)
5,750 shares underlying options, which vested on November 8, 1997, (3)
5,750 shares underlying options, which vested on November 8, 1998 and (4)
5,000 shares underlying options, which vested on January 2, 1999.
(8) The total number of shares of Class A common stock beneficially owned by
Mr. Berrard consists of (1) 603,822 shares owned by Berrard Holdings
Limited Partnership, a Nevada limited partnership controlled by Mr.
Berrard, (2) 6,250 shares underlying options, which vested on November 8,
1997 (3) 6,250 shares underlying options, which vested on November 8, 1998
and (4) 2,500 shares underlying options which vested on November 17, 1998.
(9) The total number of shares of Class A common stock beneficially owned by
Mr. Callaghan consists of: (1) 94,787 shares owned directly by Mr.
Callaghan, (2) 12,728 shares underlying warrants which are currently
exercisable, (3) 88,125 shares issuable upon the exercise of exchange
rights which are currently exercisable, (4) 62,500 shares underlying
options, which vested on July 9, 1998 and (5) 10,000 shares underlying
options, which vested on January 2, 1999.
(10) The total number of shares of Class A common stock beneficially owned by
Mr. Egan consists of (1) 150,000 shares owned directly by Mr. Egan, (2) 200
shares owned by a member of Mr. Egan's family living in the same household
as Mr. Egan, (3) 6,250 shares underlying options, which vested on April 23,
1998 and (4) 2,500 shares underlying options which vested on November 17,
1998.
(11) The total number of shares of Class A common stock beneficially owned by
Ms. Evert consists of (1) 6,250 shares underlying options, which vested on
July 9, 1998 and (2) 2,500 shares underlying options, which vested on
November 17, 1998.
(12) The total number of shares of Class A common stock beneficially owned by
Mr. Hudson consists of (1) 300,000 shares owned by the Harris W. Hudson
Limited Partnership, a Nevada limited partnership controlled by Mr. Hudson,
(2) 91,000 shares owned directly by Mr. Hudson, (3) 6,250 shares underlying
options, which vested on November 8, 1997, (4) 6,250 shares underlying
options, which
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<PAGE> 87
vested on November 8, 1998 and (5) 2,500 shares underlying options, which
vested on November 17, 1998.
(13) The total number of shares of Class A common stock beneficially owned by
Mr. Johnson consists of (1) 818,848 shares owned by GDJ, Jr. Investments
Limited Partnership, a Nevada limited partnership controlled by Mr.
Johnson, (2) 15,000 shares owned by Mr. Johnson's wife, (3) 3,000 shares
owned by the GD Johnson III ESA Trust, (4) 3,000 shares owned by the SP
Johnson ESA Trust, (5) 6,250 shares underlying options, which vested on
November 8, 1997, (6) 6,250 shares underlying options, which vested on
November 8, 1998 and (7) 2,500 shares underlying options, which vested on
November 17, 1998.
(14) The total number of shares of Class A common stock beneficially owned by
Mr. Latimer consists of (1) 6,250 shares underlying options, which vested
on August 7, 1998 and (2) 2,500 shares underlying options, which vested on
November 17, 1998.
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CERTAIN RELATIONSHIPS AND TRANSACTIONS
It is our policy to enter into transactions with related parties on terms
that, on the whole, are no less favorable than those terms that would be
available from unaffiliated parties. Based on our experience in the business
segments in which we operate and the terms of our transactions with unaffiliated
parties, we believe that all of the transactions described below met our policy
standards at the time they occurred.
The following events occurred in connection with our initial public
offering:
(1) Mr. Huizenga contributed to us:
- his 78% ownership interest in Decoma Miami Associates, Ltd., an entity
which manages the Miami Arena;
- a note representing the outstanding amount which one of our
subsidiaries had previously borrowed from him, plus interest;
- his ownership interest in the Florida Panthers Hockey Club;
- his ownership interest in Arena Development Company, Ltd., an entity
which developed the National Car Rental Center; and
- his ownership interest in Arena Operating Company, Ltd., an entity
which operates the National Car Rental Center;
in exchange for 5,275,678 shares of common stock, of which 5,020,678
shares were Class A common stock and 255,000 shares were Class B common
stock.
(2) We repaid $20.0 million in debt owed to Panthers Investment Venture,
one of our affiliates controlled by Mr. Huizenga.
In 1994, Mr. Huizenga purchased a 50% interest in the predecessor to
Leisure Management International, Inc., which manages the Miami Arena under a
management agreement with Decoma. Under the terms of the management agreement,
Leisure Management received from Decoma management fees of approximately
$109,000, $120,000 and $137,000 for the fiscal years ended June 30, 1996, 1997
and 1998, respectively. We will manage and operate the National Car Rental
Center, a new multi-purpose sports and entertainment complex located in Broward
County, Florida under an operating agreement between us and Broward County. We
have entered into an agreement with Leisure Management to manage the National
Car Rental Center for $250,000 annually and with Front Row Communications, Inc.,
an entity affiliated with Mr. Huizenga, to market luxury suites and obtain
corporate sponsorships at the arena. Front Row will receive 10% of all first
year arena advertising, including naming rights revenue at the National Car
Rental Center.
In August 1997, the Panthers entered into a contract with SportsChannel
Florida, an entity affiliated with Mr. Huizenga. Under the terms of this
contract, the Panthers granted local television broadcast and pay television
rights, exclusively to SportsChannel Florida, a Florida limited partnership, 70%
of which is owned by Mr. Huizenga for all of the Panthers' pre-season, regular
season and post-season games during the six seasons commencing with the
1997-1998 season. The SportsChannel Florida contract provides for payments to
the Panthers of annual rights fees of $2.8 million for the 1997-1998 season,
$3.1 million for the 1998-1999 season, $5.5 million for the 1999-2000, 2000-2001
and 2001-2002 seasons and $6.0 million for the 2002-2003 season.
We pay Huizenga Holdings a management fee equal to 1% of our gross revenue,
excluding National Hockey League generated revenues, in exchange for services
including, but not limited to, assisting us in executing administrative
functions, obtaining financing, developing tax planning strategies and
formulating risk management strategies, as well as advising us with respect to
securities matters and future acquisitions. This management fee totaled
approximately $293,000, $498,000 and $2.9 million for the fiscal years ended
June 30, 1996, 1997 and 1998, respectively.
In connection with the acquisition of the Hyatt Regency Pier 66 Hotel and
Marina and the Radisson Bahia Mar Resort and Yachting Center in March 1997,
Messrs. Huizenga, Berrard, Johnson and Rochon
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<PAGE> 89
received 972,018, 592,877, 451,248 and 379,062 shares of the Class A common
stock, respectively, in exchange for their ownership interests in these resorts.
Based, in part, on a fairness opinion received from Donaldson, Lufkin & Jenrette
Securities Corporation, we believe that the acquisition of these resorts was
fair to our stockholders and that the terms of the acquisition were as favorable
to us as could have been obtained from an unaffiliated party in a comparable
transaction. This transaction is subject to pending litigation. See
"Business -- Legal Proceedings."
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<PAGE> 90
DESCRIPTION OF CERTAIN INDEBTEDNESS
The following summary description of certain of our indebtedness does not
purport to be complete, and is subject to, and is qualified in its entirety by
reference to, our credit agreements and other debt instruments, copies of which
may be obtained from us upon written request.
NEW CREDIT FACILITY
The New Credit Facility was provided by a syndicate of banks and other
financial institutions led by Bear, Stearns & Co. Inc., as syndication agent,
and Bankers Trust Company, as administrative agent. The New Credit Facility
provides for a revolving credit facility of $146.0 million which will mature
approximately three years after the date of the closing of the Private Debt
Offering. Upon the closing of the Private Debt Offering, our initial borrowings
under the New Credit Facility were $24.9 million.
Our obligations under the New Credit Facility are fully guaranteed by
certain of our domestic subsidiaries (each of which is a guarantor of the Notes)
which, directly or indirectly, own interests in the Hyatt Regency Pier 66 Hotel
and Marina, the Radisson Bahia Mar Resort and Yachting Center, the Edgewater
Beach Hotel and the Registry Hotel at Pelican Bay. The guarantees from the
operating subsidiaries under the New Credit Facility are secured by a first lien
on these resorts and related assets.
Borrowings by us under the New Credit Facility are based on an eligible
borrowing base, which is generally limited to the lesser of (x) an amount which
is no more than a specified percentage of the most recent appraised value of the
resorts which are collateral for the loan, (y) an amount which is supported by a
specified debt coverage ratio and (z) a specified multiple of cash flow.
Borrowings under the New Credit Facility bear interest, at our option, at a
rate equal to (a) LIBOR or (b) the Base Rate plus, in either case, the
Applicable Margin. The "Base Rate" means the higher of (i) the rate that Bankers
Trust Company announces from time to time as its prime lending rate and (ii)
0.5% in excess of the overnight federal funds rate. The "Applicable Margin"
means 3.0% for LIBOR loans and 1.0% for Base Rate loans. Actual interest rates
are subject to market conditions at the time of closing.
The New Credit Facility provides that the Company must meet or exceed a
fixed charge ratio, must not exceed a leverage ratio and must maintain a minimum
net worth. In addition, the New Credit Facility contains customary covenants at
our operating subsidiaries, and customary representations and warranties.
The New Credit Facility includes customary events of default.
HOCKEY REVOLVING CREDIT FACILITY DUE APRIL 2000
This loan is a revolving credit facility payable to a bank. Borrowings
under this facility bear interest at a floating rate based on the lender's base
rate or LIBOR, at our option. Base rate loans bear interest at the Base Rate
(defined as the higher of (x) the applicable prime lending rate of The Chase
Manhattan Bank and (y) the Federal Funds rate plus 0.5% per annum). LIBOR loans
bear interest at LIBOR plus 1.5% per annum. The interest rate on this loan at
December 31, 1998 was 6.6%. The total undrawn amount of this facility at
December 31, 1998, after giving pro forma effect to our private placement of
Class A common stock which closed on February 18, 1999, the rights offering
subscriptions for Class A common stock which closed on April 6, 1999, the
initial borrowings under our New Credit Facility, the Private Debt Offering and
the application of the net proceeds from these financings, is $35.0 million.
This loan contains customary covenants, including those regarding our
financial performance, and restrictions upon the distribution of cash to the
Company upon violation of our financial covenants or upon an event of default
under the loan. This loan provides for the repayment of all of the debt
outstanding thereunder in the event of a material adverse change in our business
or the business of the Panthers or other entities comprising the non-hockey
sports and entertainment segment of the Company taken as a whole.
This loan is secured by a first lien upon the assets of the Panthers and
upon assets related to our sports and entertainment segment.
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BOCA RATON RESORT MORTGAGE DUE AUGUST 2001
This is a secured term loan payable to a bank. Borrowings under this
facility bear interest at a floating rate based on the lender's base rate or
LIBOR, at our option. Base rate loans bear interest at the prime lending rate of
ScotiaBank plus 0.25% per annum. LIBOR loans bear interest at LIBOR plus 2.25%
per annum. The effective interest rate on this loan at December 31, 1998 was
9.2% after giving effect to payments made on an interest rate swap purchased in
connection with this loan. The amount outstanding under this facility at
December 31, 1998, after giving pro forma effect to our private placement of
Class A common stock which closed on February 18, 1999, our rights offering of
Class A common stock which closed on April 6, 1999, the initial borrowings under
our New Credit Facility, the Private Debt Offering and the application of the
net proceeds from these financings, is $108.5 million.
This loan contains customary covenants, including those regarding the Boca
Raton Resort and Club's financial performance, and restrictions upon the
distribution of cash to the Company. This loan provides for the repayment of all
of the debt outstanding thereunder in the event of a material adverse change in
the business of the Boca Raton Resort and Club.
This loan is secured by a first mortgage and lien upon all Boca Raton
Resort and Club assets.
ARIZONA BILTMORE MORTGAGE DUE JULY 2016
The loan bears interest at a fixed rate of 8.25%. This non-recourse term
loan is secured by a first deed of trust and lien upon all of the Arizona
Biltmore Hotel assets. The loan contains customary covenants, including the
maintenance of customary reserves. We assumed this loan in connection with
acquiring the Arizona Biltmore Hotel. The amount outstanding under this loan at
December 31, 1998, after giving pro forma effect to our private placement of
Class A common stock which closed on February 18, 1999, our rights offering of
Class A common stock which closed on April 6, 1999, the initial borrowings under
our New Credit Facility, the Private Debt Offering and the application of the
net proceeds from these financings, is $62.1 million.
This loan is secured by a second deed of trust and lien upon all Arizona
Biltmore Hotel assets.
ARIZONA BILTMORE EARNOUT NOTE DUE IN APRIL 2000 AND APRIL 2001
This obligation is an unsecured obligation of the Arizona Biltmore Hotel
and the Company to pay the balance of the vested earn-out payment to the sellers
of the Arizona Biltmore Hotel. This obligation does not bear interest. The
amount outstanding under this obligation at December 31, 1998, after giving pro
forma effect to our private placement of Class A common stock which closed on
February 18, 1999, our rights offering of Class A common stock which closed on
April 6, 1999, the initial borrowings under our New Credit Facility, the Private
Debt Offering and the application of the net proceeds from these financings, is
$28.6 million.
INDEBTEDNESS REPAID IN CONNECTION WITH THE PRIVATE DEBT OFFERING
Arizona Biltmore Loan due December 2000
This was a secured term loan payable to a bank. The proceeds of this loan
were used to make the second payment to acquire the Arizona Biltmore Hotel.
Borrowings under this facility bore interest at a floating rate based on the
lender's base rate or LIBOR, at the Company's option. Base rate loans bore
interest at the Base Rate (defined as the higher of (x) the applicable prime
lending rate of Bankers Trust Company and (y) the Federal Reserve reported
certificate of deposit rate plus 1.0% per annum) plus 4.0% per annum. LIBOR
loans bore interest at LIBOR plus 6.0% per annum. The interest rate on this loan
at December 31, 1998 was 10.9%.
Interim Loan Payable to Bank due June 1999
This loan bore interest at a variable rate, which was 9.4% at December 31,
1998. The proceeds were used for the initial payment to acquire the Arizona
Biltmore Hotel, to acquire interests in the Registry Hotel at
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Pelican Bay, to refinance indebtedness secured by the Radisson Bahia Mar Resort
and Yachting Center, to make the final payment to acquire the Edgewater Beach
Hotel and for working capital purposes.
Pier 66 Mortgage due June 2000
This loan bore interest at a variable rate, which was 8.9% at December 31,
1998. This loan was secured by a first mortgage on the Hyatt Regency Pier 66
Hotel and Marina. We assumed this loan in connection with acquiring the Hyatt
Regency Pier 66 Hotel and Marina.
Unsecured Line-of-Credit due June 1999
This loan bore interest at a variable rate, which was 5.7% at December 31,
1998. The proceeds were used to pay fees and expenses associated with the
Arizona Biltmore Loan due December 2000 described above and for working capital.
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DESCRIPTION OF NOTES
You can find the definitions of certain terms used in this description
under the subheading "Certain Definitions." In this description, the word
"Company" refers only to Florida Panthers Holdings, Inc. and not to any of its
subsidiaries.
The Company will issue the New Notes under the same Indenture to be dated
as of April 21, 1999 (the "Indenture") among itself, the Guarantors and The Bank
of New York, as trustee (the "Trustee"), under which the Old Notes were issued.
The terms of the New Notes include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act").
The following description is a summary of the material provisions of the
Indenture and the Registration Rights Agreement among the Company, the
Guarantors and the Initial Purchasers (the "Registration Rights Agreement"). It
does not restate those agreements in their entirety. We urge you to read the
Indenture and the Registration Rights Agreement because they, and not this
description, define your rights as holders of the New Notes. Certain defined
terms used in this description but not defined below under "-- Certain
Definitions" have the meanings assigned to them in the Indenture.
THE OLD NOTES AND THE NEW NOTES WILL REPRESENT THE SAME DEBT
The New Notes will be issued solely in exchange for an equal principal
amount of Old Notes pursuant to the Exchange Offer. The New Notes will evidence
the same debt as the Old Notes and both series of Notes will be entitled to the
benefits of the Indenture and treated as a single class of debt securities. The
terms of the New Notes will be the same in all material respects as the Old
Notes except that (i) the New Notes will be registered under the Securities Act,
and therefore, will not bear legends restricting the transfer thereof and (ii)
certain of the registration rights, under the Registration Rights Agreement,
relating to the New Notes are different than those relating to the Old Notes
and, therefore, the defaults under the Registration Rights Agreement that may
require the Company to pay additional interest will be different for the New
Notes and the Old Notes. See "Registration Rights Agreement; Liquidated
Damages."
If the Exchange Offer is consummated, holders of Old Notes who do not
exchange their Old Notes for New Notes will vote together with holders of the
New Notes for all relevant purposes under the Indenture. Accordingly, all
references herein to specified percentages in aggregate principal amount of the
outstanding Notes shall be deemed to mean, at any time after the Exchange Offer
is consummated, such percentages in aggregate principal amount of the Old Notes
and the New Notes then outstanding.
BRIEF DESCRIPTION OF THE NOTES AND THE GUARANTEES
The Notes
The Notes:
- are general unsecured obligations of the Company;
- are subordinated in right of payment to all existing and future Senior
Debt of the Company;
- are pari passu in right of payment with any future senior subordinated
Indebtedness of the Company; and
- are unconditionally guaranteed by the Guarantors.
The Guarantees
The Notes are guaranteed by all of the Domestic Subsidiaries of the
Company. As of the date of the Indenture, all of our subsidiaries will be
"Domestic Subsidiaries." However, in the future, under certain circumstances we
may have subsidiaries which are not "Domestic Subsidiaries."
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Each Guarantee of the Notes:
- is a general unsecured obligation of the Guarantor;
- is subordinated in right of payment to all existing and future Senior
Debt of the Guarantor; and
- is pari passu in right of payment with any future senior subordinated
Indebtedness of the Guarantor.
As of the date of the Indenture, all of our subsidiaries will be
"Restricted Subsidiaries." However, under the circumstances described below
under the subheading "-- Certain Covenants -- Designation of Restricted and
Unrestricted Subsidiaries," we will be permitted to designate certain of our
subsidiaries as "Unrestricted Subsidiaries." Our Unrestricted Subsidiaries will
not be subject to many of the restrictive covenants in the Indenture. Our
Unrestricted Subsidiaries will not guarantee the Notes.
PRINCIPAL, MATURITY AND INTEREST
The Indenture provides for the issuance by the Company of Notes with a
maximum aggregate principal amount of $340.0 million. The Company will issue
Notes in denominations of $1,000 and integral multiples of $1,000. The Notes
will mature on April 15, 2009.
Interest on the Notes will accrue at the rate of 9 7/8% per annum and will
be payable semi-annually in arrears on April 15, and October 15, commencing on
October 15, 1999. The Company will make each interest payment to the Holders of
record on the immediately preceding April 1 and October 1.
Interest on the Notes will accrue from the date of original issuance or, if
interest has already been paid, from the date it was most recently paid.
Interest will be computed on the basis of a 360-day year comprised of twelve
30-day months.
METHODS OF RECEIVING PAYMENTS ON THE NOTES
If a Holder has given wire transfer instructions to the Company, the
Company will pay all principal, interest and premium and Liquidated Damages, if
any, on that Holder's Notes in accordance with those instructions. All other
payments on Notes will be made at the office or agency of the Paying Agent and
Registrar within the City and State of New York unless the Company elects to
make interest payments by check mailed to the Holders at their addresses set
forth in the register of Holders.
PAYING AGENT AND REGISTRAR FOR THE NOTES
The Trustee will initially act as Paying Agent and Registrar. The Company
may change the Paying Agent or Registrar without prior notice to the Holders,
and the Company or any of its Subsidiaries may act as Paying Agent or Registrar.
TRANSFER AND EXCHANGE
A Holder may transfer or exchange Notes in accordance with the Indenture.
The Registrar and the Trustee 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
Indenture. 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 the mailing of a notice of redemption of
Notes to be redeemed.
The registered Holder of a Note will be treated as the owner of it for all
purposes.
SUBSIDIARY GUARANTEES
The Guarantors will jointly and severally guarantee the Company's
obligations under the Notes. Each Subsidiary Guarantee will be subordinated to
the prior payment in full of all Senior Debt of that Guarantor. The obligations
of each Guarantor under its Subsidiary Guarantee will be limited as necessary to
prevent that
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Subsidiary Guarantee from constituting a fraudulent conveyance under applicable
law. See "Risk Factors -- Federal and state statutes allow courts, under
specific circumstances, to void guarantees and require noteholders to return
payments received from guarantors."
A Guarantor may not sell or otherwise dispose of all or substantially all
of its assets to, or consolidate with or merge with or into (whether or not such
Guarantor is the surviving Person), another Person, other than the Company or
another Guarantor, unless:
(1) immediately after giving effect to that transaction (other than in
the case of a sale described in clause (c) of the definition of "Asset
Sale"), no Default or Event of Default exists; and
(2) either:
(a) the Person acquiring the property in any such sale or
disposition or the Person formed by or surviving any such consolidation
or merger assumes all the obligations of that Guarantor under the
Indenture, its Subsidiary Guarantee and the Registration Rights
Agreement pursuant to a supplemental indenture satisfactory to the
Trustee; or
(b) such sale or other disposition complies with the "Asset Sale"
provisions of the Indenture, including the application of the Net
Proceeds therefrom.
The Subsidiary Guarantee of a Guarantor will be released:
(1) in connection with any sale or other disposition of all or
substantially all of the assets of that Guarantor (including by way of
merger or consolidation) to a Person that is not (either before or after
giving effect to such transaction) a Restricted Subsidiary of the Company,
if the sale or other disposition of all or substantially all of the assets
of that Guarantor complies with the provisions of the Indenture;
(2) in connection with any sale or other disposition of all of the
Capital Stock of a Guarantor to a Person that is not (either before or
after giving effect to such transaction) a Restricted Subsidiary of the
Company, if the sale or other disposition of all such Capital Stock of that
Guarantor complies with the provisions of the Indenture;
(3) if the Company properly designates any Restricted Subsidiary that
is a Guarantor as an Unrestricted Subsidiary; or
(4) upon dissolution or liquidation in accordance with the provisions
of the Indenture.
See "-- Repurchase at the Option of Holders -- Asset Sales."
SUBORDINATION
The payment of principal, interest and premium and Liquidated Damages, if
any, on the Notes will be subordinated to the prior payment in full in cash or
Cash Equivalents of all Senior Debt of the Company, including Senior Debt of the
Company incurred after the date of the Indenture.
The holders of Senior Debt of the Company will be entitled to receive
payment in full in cash or Cash Equivalents of all Obligations due in respect of
Senior Debt of the Company (including interest after the commencement of any
bankruptcy proceeding, whether or not allowed, at the rate specified in the
applicable Senior Debt of the Company) before the Holders of Notes will be
entitled to receive any payment with respect to the Notes (except that Holders
of Notes may receive payments made from the trust described under "-- Legal
Defeasance and Covenant Defeasance"), in the event of any distribution to
creditors of the Company:
(1) in a total or partial liquidation or dissolution of the Company;
(2) in a bankruptcy, reorganization, insolvency, receivership or
similar proceeding relating to the Company or its property;
(3) in an assignment for the benefit of creditors; or
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(4) in any marshaling of the Company's assets and liabilities.
The Company also may not make any payment under or in respect of the Notes
(except from the trust described under "-- Legal Defeasance and Covenant
Defeasance") if:
(1) a payment default (including any payment default following
acceleration of maturity) on Designated Senior Debt of the Company occurs
and is continuing beyond any applicable grace period; or
(2) any other default occurs and is continuing on any Designated
Senior Debt of the Company that permits holders of that Designated Senior
Debt of the Company to accelerate its maturity and the Trustee receives a
notice of such default (a "Payment Blockage Notice") from the Company or
the holders of any Designated Senior Debt of the Company.
Payments on the Notes may and shall be resumed:
(1) in the case of a payment default, upon the date on which such
default is cured or waived; and
(2) 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, unless the
maturity of any Designated Senior Debt of the Company has been accelerated.
No new Payment Blockage Notice may be delivered unless and until 360 days
have elapsed since the delivery 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 Trustee shall be, or be made, the
basis for a subsequent Payment Blockage Notice unless such default shall have
been cured or waived for a period of not less than 90 consecutive days.
If the Trustee or any Holder of the Notes receives a payment in respect of
the Notes (except from the trust described under "-- Legal Defeasance and
Covenant Defeasance") when:
(1) the payment is prohibited by these subordination provisions; and
(2) the Trustee or the Holder has actual knowledge or otherwise
receives notice that the payment is prohibited;
the Trustee or the Holder, as the case may be, shall hold the payment in trust
for the benefit of the holders of Senior Debt of the Company. Upon the proper
written request of the holders of Senior Debt of the Company, the Trustee or the
Holder, as the case may be, shall deliver the amounts in trust to the holders of
Senior Debt of the Company or their proper representative.
The Company must promptly notify holders of its 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 bankruptcy, liquidation or reorganization of the Company, Holders of Notes
may recover less ratably than creditors of the Company who are holders of Senior
Debt of the Company.
Payments under the Subsidiary Guarantee of each Guarantor will be
subordinated to the prior payment in full of all Senior Debt of such Guarantor,
including Senior Debt of such Guarantor incurred after the date of the
Indenture, on the same basis as provided above with respect to the subordination
of payments on the Notes by the Company to the prior payment in full of Senior
Debt of the Company. See "Risk Factors -- The Notes and Guarantees will be
subordinated to our senior debt."
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"Designated Senior Debt" means:
(1) any Indebtedness outstanding at any time under any Existing Credit
Agreement and any renewal, refund, replacement or refinancing of such
Indebtedness, provided that any such renewal, refund, replacement or
refinancing is Senior Debt; and
(2) any other Senior Debt permitted under the Indenture the principal
amount of which is $20.0 million or more and that has been designated by
the Company as "Designated Senior Debt."
The Company shall immediately notify the Trustee in writing of any
Indebtedness being designated as Designated Senior Debt.
"Senior Debt" means:
(1) all Indebtedness of the Company or any Guarantor outstanding now
or hereafter under Credit Facilities of the Company or any Guarantor and
all Hedging Obligations with respect thereto;
(2) any other Indebtedness of the Company or any Guarantor permitted
to be incurred under the terms of the Indenture, 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 or any
Subsidiary Guarantee; and
(3) all Obligations outstanding now or hereafter with respect to the
items listed in the preceding clauses (1) and (2).
Notwithstanding anything to the contrary in the preceding three clauses,
Senior Debt will 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 Subsidiaries or
other Affiliates;
(3) any trade payables; or
(4) the portion of any Indebtedness that is incurred in violation of
the Indenture.
OPTIONAL REDEMPTION
After April 15, 2004, the Company may redeem all or a part of the Notes
upon not less than 30 nor more than 60 days' notice, at the redemption prices
(expressed as percentages of principal amount) set forth below plus accrued and
unpaid interest and Liquidated Damages, if any, thereon, to the applicable
redemption date, if redeemed during the twelve-month period beginning on April
15 of the years indicated below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
- ---- ----------
<S> <C>
2004........................................................ 104.938%
2005........................................................ 103.291%
2006........................................................ 101.645%
2007 and thereafter......................................... 100.000%
</TABLE>
In addition, at any time prior to April 15, 2002, the Company may redeem up
to 35% of the aggregate principal amount of Notes issued under the Indenture at
a redemption price of 109.875% of the principal amount thereof, plus accrued and
unpaid interest and Liquidated Damages, if any, to the redemption date, with the
net cash proceeds of one or more Qualified Equity Offerings; provided that:
(1) at least 65% of the aggregate principal amount of Notes issued
under the Indenture remains outstanding immediately after the occurrence of
such redemption (excluding Notes held by the Company and its Subsidiaries);
and
(2) the redemption must occur within 60 days of the date of the
closing of such Qualified Equity Offering.
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Except pursuant to the preceding paragraph, the Notes will not be
redeemable at the Company's option prior to April 15, 2004.
The agreement governing the New Credit Facility and certain other Senior
Debt may prohibit the Company from exercising its option to redeem the Notes as
described above.
MANDATORY REDEMPTION
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
If a Change of Control occurs, each Holder of Notes will have the right to
require the Company to repurchase all or any part (equal to $1,000 or an
integral multiple thereof) of that Holder's Notes pursuant to a Change of
Control Offer on the terms set forth in the Indenture. In the Change of Control
Offer, the Company will offer a Change of Control Payment in cash equal to 101%
of the aggregate principal amount of Notes repurchased plus accrued and unpaid
interest and Liquidated Damages, if any, thereon, to the date of purchase.
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 on the Change of Control
Payment Date specified in such notice, which date shall be no earlier than 30
days and no later than 60 days from the date such notice is mailed, pursuant to
the procedures required by the Indenture 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. To the extent that the provisions of any
securities laws or regulations conflict with the Change of Control provisions of
the Indenture, the Company will comply with the applicable securities laws and
regulations and will not be deemed to have breached its obligations under the
Change of Control provisions of the Indenture by virtue of such conflict.
On 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 Agent 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 Trustee 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 Agent will promptly mail to each Holder of Notes so tendered the
Change of Control Payment for such Notes, and the Trustee 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 integral multiple thereof.
Prior to complying with any of the provisions of this "Change of Control"
covenant, but in any event within 90 days following a Change of Control, the
Company will either repay all outstanding Senior Debt or obtain the requisite
consents, if any, under all agreements governing outstanding Senior Debt to
permit the repurchase of Notes required by this covenant.
The agreements governing the New Credit Facility and certain other Senior
Debt may prohibit the Company from purchasing any Notes, and may also provide
that certain change of control events with respect to the Company would
constitute a default under these agreements. Any future credit agreements or
other
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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 at a time when the Company is prohibited from purchasing Notes, the
Company could seek the consent of its senior 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 Indenture which would, in turn, constitute a default under such Senior Debt.
In such circumstances, the subordination provisions in the Indenture would
likely restrict payments to the Holders of Notes.
The provisions described above that require the Company to make a Change of
Control Offer following a Change of Control will be applicable regardless of
whether any other provisions of the Indenture are applicable. Except as
described above with respect to a Change of Control, the Indenture does 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.
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 Indenture 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. Any third party making a Change of Control Offer will be required
to either repay all outstanding Senior Debt or obtain the requisite consents, if
any, under all agreements governing outstanding Senior Debt.
The definition of Change of Control includes a phrase relating to the
direct or indirect sale, lease, transfer, conveyance or other disposition of
"all or substantially all" of the properties or assets of the Company and its
Subsidiaries taken as a whole. Although there is a limited body of case law
interpreting the phrase "substantially all," there is no precise established
definition of the phrase under applicable law. Accordingly, the ability of a
Holder of Notes to require the Company to repurchase such Notes as a result of a
sale, lease, transfer, conveyance or other disposition of less than all of the
assets of the Company and its Subsidiaries taken as a whole to another Person or
group may be uncertain.
Neither the Board of Directors of the Company nor the Trustee may waive the
covenant relating to a Holder's right to redemption upon a Change of Control.
This right, as well as restrictions in the Indenture on the ability of the
Company and its Restricted Subsidiaries to incur additional Indebtedness, to
grant Liens on its property, to make Restricted Payments and to make Asset
Sales, may make more difficult or discourage a takeover of the Company, whether
favored or opposed by the management of the Company. Consummation of any such
transaction in certain circumstances may require redemption or repurchase of the
Notes, and there can be no assurance that the Company or the acquiring party
will have sufficient financial resources to effect such redemption or
repurchase. Such restrictions and the restrictions on transactions with
Affiliates may, in certain circumstances, make more difficult or discourage any
leveraged buyout of the Company or any of its Subsidiaries. While such
restrictions cover a wide variety of arrangements which have traditionally been
used to effect highly leveraged transactions, the Indenture may not afford the
Holders of Notes protection in all circumstances from the adverse aspects of a
highly leveraged transaction, reorganization, restructuring, merger or similar
transaction.
Asset Sales
The Company will not, and will not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless:
(1) 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 (as determined at the time a legally binding agreement is
entered into with respect to such Asset Sale) of the assets or Equity
Interests issued or sold or otherwise disposed of;
(2) if such fair market value exceeds $10.0 million, the Board of
Directors of the Company shall have determined that such Asset Sale is fair
and reasonable to, and in the best interests of, the Company,
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as evidenced by a resolution of the Board of Directors set forth in an
Officers' Certificate delivered to the Trustee; and
(3) at least 75% of the consideration therefor received by the Company
or such Restricted Subsidiary is in the form of cash or Cash Equivalents.
For purposes of this provision, each of the following shall be deemed to be
cash:
(a) 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 Subsidiary
Guarantee) 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
(b) any securities, notes or other obligations received by the
Company or any such Restricted Subsidiary from such transferee that are
contemporaneously (subject to ordinary settlement periods) converted by
the Company or such Restricted Subsidiary into cash (to the extent of
the cash received in that conversion).
Within 365 days after the receipt of any Net Proceeds from an Asset Sale,
the Company may apply such Net Proceeds at its option:
(1) to repay Senior Debt and, if the Senior Debt repaid is revolving
credit Indebtedness, to correspondingly reduce commitments with respect
thereto;
(2) to acquire all or substantially all of the assets of, or a
majority of the Voting Stock of, another Permitted Business;
(3) to make a capital expenditure in or that is used or useful in a
Permitted Business; or
(4) to acquire other long-term assets that are used or useful in a
Permitted Business.
In the case of Investments under (2), (3) and (4) above, the Company may, within
365 days after the receipt of Net Proceeds from an Asset Sale, enter into a
legally binding agreement to invest such Net Proceeds within one year. If any
such legally binding agreement to invest such Net Proceeds is terminated, then
the Company may, within 90 days of such termination or within 365 days of such
Asset Sale, whichever is later, invest such Net Proceeds as provided in clause
(2), (3) or (4) in the preceding paragraph.
Pending the final application of any such Net Proceeds, the Company may
temporarily reduce revolving credit borrowings or otherwise invest such Net
Proceeds in any manner that is not prohibited by the Indenture.
Any Net Proceeds from Asset Sales that are not applied or invested as
provided in the two preceding paragraphs will constitute "Excess Proceeds." When
the aggregate amount of Excess Proceeds exceeds $15.0 million, the Company will
make an Asset Sale Offer to all Holders of Notes and all holders of other
Indebtedness that is pari passu with the Notes containing provisions similar to
those set forth in the Indenture with respect to offers to purchase or redeem
with the proceeds of sales of assets to purchase the maximum principal amount of
Notes and such other pari passu Indebtedness that may be purchased out of the
Excess Proceeds. The offer price in any Asset Sale Offer will be equal to 100%
of principal amount plus accrued and unpaid interest and Liquidated Damages, if
any, to the date of purchase, and will be payable in cash. If any Excess
Proceeds remain after consummation of an Asset Sale Offer, the Company may use
such Excess Proceeds for any purpose not otherwise prohibited by the Indenture.
If the aggregate principal amount of Notes and such other pari passu
Indebtedness tendered into such Asset Sale Offer exceeds the amount of Excess
Proceeds, the Trustee shall select the Notes and such other pari passu
Indebtedness to be purchased on a pro rata basis based on the principal amount
of Notes and such other pari passu Indebtedness tendered. Upon completion of
each 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 each
repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with the Asset Sales
provisions of the Indenture, the Company will
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comply with the applicable securities laws and regulations and will not be
deemed to have breached its obligations under the Asset Sale provisions of the
Indenture by virtue of such conflict.
The agreements governing the New Credit Facility and certain other Senior
Debt may prohibit the Company from purchasing any Notes, and may also provide
that certain asset sale events with respect to the Company would constitute a
default under these agreements. 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 an Asset Sale occurs at a time when
the Company is prohibited from purchasing Notes, the Company could seek the
consent of its senior 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 Indenture
which would, in turn, constitute a default under such Senior Debt. In such
circumstances, the subordination provisions in the Indenture would likely
restrict payments to the Holders of Notes.
SELECTION AND NOTICE
If less than all of the Notes are to be redeemed at any time, the Trustee
will select Notes for redemption as follows:
(1) if the Notes are listed, in compliance with the requirements of
the principal national securities exchange on which the Notes are listed;
or
(2) if the Notes are not so listed, on a pro rata basis, by lot or by
such method as the Trustee shall deem fair and appropriate.
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 of Notes to be redeemed at its
registered address. Notices of redemption may not be conditional.
If any Note is to be redeemed in part only, the notice of redemption that
relates to that Note shall state the portion of the principal amount thereof to
be redeemed. A new Note in principal amount equal to the unredeemed portion of
the original Note will be issued in the name of the Holder thereof upon
cancellation of the original Note. Notes called for redemption become due on the
date fixed for redemption. On and after the redemption date, interest ceases to
accrue on Notes or portions of them called for redemption.
CERTAIN COVENANTS
Restricted Payments
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly:
(1) 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 (including, without limitation, any payment
in connection with any merger or consolidation involving the Company or any
of its Restricted Subsidiaries) or to the direct or indirect holders of the
Company's or any of its Restricted Subsidiaries' Equity Interests in their
capacity as such (other than dividends or distributions payable in Equity
Interests (other than Disqualified Stock) of the Company or to the Company
or a Restricted Subsidiary of the Company);
(2) purchase, redeem or otherwise acquire or retire for value
(including, without limitation, in connection with any merger or
consolidation involving the Company) any Equity Interests of the Company,
any direct or indirect parent of the Company or any Subsidiary of the
Company (other than a Wholly Owned Restricted Subsidiary);
(3) make any payment on or with respect to, or purchase, redeem,
defease or otherwise acquire or retire for value any Indebtedness that is
subordinated to the Notes or the Subsidiary Guarantees, except a payment of
interest or principal at the Stated Maturity thereof; or
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(4) make any Restricted Investment (all such payments and other
actions set forth in clauses (1) through (4) above being collectively
referred to as "Restricted Payments"),
unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof; and
(2) the Company would, at the time of such Restricted Payment and
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 Preferred Stock"; and
(3) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by the Company and its Restricted
Subsidiaries after the date of the Indenture (excluding Restricted Payments
permitted by clauses (2) and (3) of the next succeeding paragraph), is less
than the sum, without duplication, of:
(a) 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 Indenture 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
(b) 100% of the aggregate net cash proceeds received by the Company
since the date of the Indenture as a contribution to its common equity
capital or from the issue or sale of Equity Interests of the Company
(other than Disqualified Stock) or from the issue or sale of convertible
or exchangeable Disqualified Stock or convertible or exchangeable debt
securities of the Company that have been converted into or exchanged for
such Equity Interests (other than Equity Interests (or Disqualified
Stock or debt securities) sold to a Subsidiary of the Company); plus
(c) (i) to the extent that any Restricted Investment that was made
after the date of the Indenture is sold for cash or otherwise liquidated
or repaid for cash, an amount (to the extent not included in
Consolidated Net Income) equal to the lesser of (x) the cash return of
capital with respect to such Restricted Investment (less the cost of
disposition, if any) and (y) the initial amount of such Restricted
Investment and (ii) in the case of the designation of an Unrestricted
Subsidiary as a Restricted Subsidiary (as long as the designation of
such Subsidiary as an Unrestricted Subsidiary was deemed a Restricted
Investment) an amount equal to the lesser of (x) the fair market value
of all outstanding Investments owned by the Company and its Restricted
Subsidiaries in such Unrestricted Subsidiary and (y) the amount of the
Restricted Investment deemed made at the time the Subsidiary was
designated as an Unrestricted Subsidiary; plus
(d) $5.0 million.
So long as no Default has occurred and is continuing or would be caused
thereby (other than in the case of clause (1) below), the preceding provisions
will not prohibit:
(1) the payment of any dividend within 60 days after the date of
declaration thereof, if at said date of declaration such payment would have
complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other
acquisition of any subordinated Indebtedness of the Company or any
Guarantor or of any Equity Interests of the Company in exchange for, or out
of the net cash proceeds of the substantially concurrent sale (other than
to a Subsidiary of the Company) of, Equity Interests of the Company (other
than Disqualified Stock); provided that the amount of any such net cash
proceeds that are utilized for any such redemption, repurchase, retirement,
defeasance or other acquisition shall be excluded from clause (3)(b) of the
preceding paragraph;
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(3) the defeasance, redemption, repurchase or other acquisition of
subordinated Indebtedness of the Company or any Guarantor with the net cash
proceeds from an incurrence of Permitted Refinancing Indebtedness;
(4) the payment of any dividend by a Restricted Subsidiary of the
Company to the holders of its common Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for
value of any Equity Interests of the Company or any Restricted Subsidiary
of the Company held by employees of the Company or its Subsidiaries upon
death, disability or termination of employment; provided that the aggregate
price paid for all such repurchased, redeemed, acquired or retired Equity
Interests shall not exceed $500,000 in any twelve-month period;
(6) the one-time dividend or distribution of the Company's direct or
indirect interests in the Florida Panthers Hockey Club, Ltd. and in the
National Car Rental Center, together with, at the option of the Company,
all or a portion of any other assets related to the sports and
entertainment segment of the Company, provided that the Fixed Charge
Coverage Ratio for the Company's most recently ended four full fiscal
quarters for which internal financial statements are available immediately
preceding the date on which such dividend or distribution is made would
have been at least 2.25 to 1, determined on a pro forma basis, as if the
dividend or distribution had been made at the beginning of such
four-quarter period;
(7) the repurchase of Equity Interests of the Company that may be
deemed to occur upon the exercise of options to acquire Capital Stock of
the Company if such Equity Interests represent a portion of the exercise
price of such options;
(8) any Permitted Seller Note Payments;
(9) any distributions under Section 5.01(b) of the Limited Partnership
Agreement ("BRHC Limited Partnership Agreement") of Panthers BRHC Limited,
a Florida limited partnership, dated June 25, 1997 (which limited
partnership owns the Boca Raton Resort and Club) in respect of income tax
liabilities of Boca Raton Hotel and Club Limited Partnership (which
formerly owned the Boca Raton Resort and Club) arising from its status as a
non-managing general partner of Panthers BRHC Limited, and any
distributions under Section 5.01(c) of the BRHC Limited Partnership
Agreement to pay Boca Raton Hotel and Club Limited Partnership its
reasonable administrative costs, plus the $75,000 annual amount due
thereunder; and
(10) cash payments in lieu of fractional shares issuable as dividends
on Equity Interests of the Company in an amount, when taken together with
all other cash payments made pursuant to this clause (10) since the date of
the Indenture, not to exceed $500,000.
The amount of all Restricted Payments (other than cash) shall be the fair
market value on the date of the Restricted Payment of the asset(s) or securities
proposed to be transferred or issued to or by the Company or such Subsidiary, as
the case may be, pursuant to the Restricted Payment. The fair market value of
any assets or securities that are required to be valued by this covenant shall
be determined by the Board of Directors whose resolution with respect thereto
shall be delivered to the Trustee. Not later than the date of making any
Restricted Payment, the Company shall deliver to the Trustee an Officers'
Certificate stating that such Restricted Payment is permitted and setting forth
the basis upon which the calculations required by this "Restricted Payments"
covenant were computed, together with a copy of any fairness opinion or
appraisal required by the Indenture.
Incurrence of Indebtedness and Issuance of Preferred Stock
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, "incur" or the "incurrence") any Indebtedness
(including Acquired Debt), and the Company will not issue any Disqualified Stock
and the Company will not permit any of its Restricted Subsidiaries to issue any
Disqualified Stock or preferred stock; provided, however, that the
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Company may incur Indebtedness (including Acquired Debt) or issue Disqualified
Stock, and a Guarantor may incur Indebtedness or issue Disqualified Stock or
preferred stock, if the Fixed Charge Coverage Ratio for the Company's most
recently ended four full fiscal quarters for which internal financial statements
are available immediately preceding the date on which such additional
Indebtedness is incurred or such Disqualified Stock or preferred stock is issued
would have been at least 2 to 1, 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 preferred stock or Disqualified Stock had
been issued, as the case may be, at the beginning of such four-quarter period.
The first paragraph of this covenant will not prohibit the incurrence of
any of the following items of Indebtedness (collectively, "Permitted Debt"):
(1) the incurrence by the Company and any Guarantor of revolving
credit Indebtedness and letters of credit under Credit Facilities in an
aggregate principal amount at any one time outstanding under this clause
(1)(with letters of credit being deemed to have a principal amount equal to
the maximum potential liability of the Company and the Guarantors and the
Guarantors thereunder) not to exceed $200.0 million less the aggregate
amount of all Net Proceeds of Asset Sales applied by the Company or any
Guarantor to repay any revolving credit Indebtedness under a Credit
Facility and effect a corresponding commitment reduction thereunder
pursuant to the covenant described above under the caption "-- Repurchase
at the Option of Holders -- Asset Sales";
(2) the incurrence by the Company and any Guarantor of the Existing
Indebtedness;
(3) the incurrence by the Company and the Guarantors of Indebtedness
represented by the Notes and the related Subsidiary Guarantees to be issued
on the date of the Indenture and the Exchange Notes and the related
Subsidiary Guarantees to be issued pursuant to the Registration Rights
Agreement;
(4) the incurrence by the Company or any Guarantor of Indebtedness
represented by Capital Lease Obligations, mortgage financings or purchase
money obligations, in each case, incurred for the purpose of financing all
or any part of the purchase price or cost of construction or improvement of
property, plant or equipment used in the business of the Company or such
Guarantor (including any refinancing thereof), in an aggregate principal
amount not to exceed $10.0 million at any time outstanding;
(5) the incurrence by the Company or any of Guarantor of Permitted
Refinancing Indebtedness in exchange for, or the net proceeds of which are
used to refund, refinance or replace Indebtedness (other than intercompany
Indebtedness) that was permitted by the Indenture to be incurred under the
first paragraph of this covenant or clauses (2), (3) or (5) of this
paragraph;
(6) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among the Company and
any of its Wholly Owned Restricted Subsidiaries; provided, however, that:
(a) if the Company or any Guarantor is the obligor on such
Indebtedness, such Indebtedness must be expressly subordinated to the
prior payment in full in cash of all Obligations with respect to the
Notes, in the case of the Company, or the Subsidiary Guarantee, in the
case of a Guarantor; and
(b) (i) any subsequent issuance or transfer of Equity Interests
that results in any such Indebtedness being held by a Person other than
the Company or a Restricted Subsidiary thereof and (ii) any sale or
other transfer of any such Indebtedness to a Person that is not either
the Company or a Wholly Owned Restricted Subsidiary thereof; shall be
deemed, in each case, to constitute an incurrence of such Indebtedness
by the Company or such Restricted Subsidiary, as the case may be, that
was not permitted by this clause (6);
(7) the incurrence by the Company or any of its Restricted
Subsidiaries of:
(a) Hedging Obligations that are incurred for the purpose of fixing
or hedging interest rate risk with respect to any floating rate
Indebtedness that is permitted by the terms of this Indenture to be
outstanding; and
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(b) Currency Agreements entered into in the ordinary course of
business in respect of assets or obligations denominated in a foreign
currency;
(8) the guarantee by the Company or any of the Guarantors of
Indebtedness of the Company or a Restricted Subsidiary of the Company that
was permitted to be incurred by another provision of this covenant;
(9) the accrual of interest, the accretion or amortization of original
issue discount, the payment of interest on any Indebtedness of the Company
or any Guarantor in the form of additional Indebtedness with the same
terms, and the payment of dividends on Disqualified Stock in the form of
additional shares of the same class of Disqualified Stock will not be
deemed to be an incurrence of Indebtedness or an issuance of Disqualified
Stock for purposes of this covenant; provided, in each such case, that the
amount thereof is included in Fixed Charges of the Company as accrued;
(10) 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 that was not permitted by this clause (10);
(11) Indebtedness of the Company or any Guarantor arising from the
honoring by a bank or other financial institution of a check, draft or
similar instrument inadvertently (except in the case of daylight
overdrafts) drawn against insufficient funds in the ordinary course of
business; provided, however, that such Indebtedness is extinguished within
two business days of incurrence;
(12) Indebtedness of the Company or any Guarantor represented by
letters of credit for the account of the Company or such Restricted
Subsidiary, as the case may be, in order to provide security for workers'
compensation claims, payment obligations in connection with self-insurance
or similar requirements in the ordinary course of business; and
(13) the incurrence by the Company or any Guarantor of additional
Indebtedness (including any refinancings thereof) in an aggregate principal
amount (or accreted value, as applicable) at any time outstanding, not to
exceed $25.0 million.
For purposes of determining compliance with this "Incurrence of
Indebtedness and Issuance of Preferred Stock" covenant, in the event that an
item of proposed Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in clauses (1) through (13) above, or is
entitled to be incurred pursuant to the first paragraph of this covenant, the
Company will be permitted to classify such item of Indebtedness on the date of
its incurrence in any manner that complies with this covenant.
No Senior Subordinated Debt
The Company will not 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 of the Company and senior in any respect in right of
payment to the Notes. No Guarantor will incur, create, issue, assume, guarantee
or otherwise become liable for any Indebtedness that is subordinate or junior in
right of payment to the Senior Debt of such Guarantor and senior in any respect
in right of payment to such Guarantor's Subsidiary Guarantee.
Liens
The Company will not, and will not permit any of its Restricted
Subsidiaries to, create, incur, assume or otherwise cause or suffer to exist or
become effective any Lien of any kind securing Indebtedness, Attributable Debt
or trade payables (other than Permitted Liens) upon any of their property or
assets, now owned or hereafter acquired, unless:
(a) in the case of Liens securing Indebtedness, Attributable Debt
or trade payables (other than Permitted Liens) that are expressly
subordinated in right of payment to the Notes, the Notes are
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secured on a senior basis to the obligations so secured until such time
as such obligations are no longer secured by a Lien; and
(b) in all other cases, all payments due under the Indenture and
the Notes are secured on an equal and ratable basis with the obligations
so secured until such time as such obligations are no longer secured by
a Lien.
Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to:
(1) pay dividends or make any other distributions on its Capital Stock
to the Company or any of its Restricted Subsidiaries, or with respect to
any other interest or participation in, or measured by, its profits, or pay
any indebtedness owed to the Company or any of its Restricted Subsidiaries;
(2) make loans or advances to the Company or any of its Restricted
Subsidiaries; or
(3) transfer any of its properties or assets to the Company or any of
its Restricted Subsidiaries.
However, the preceding restrictions will not apply to encumbrances or
restrictions existing under or by reason of:
(1) Existing Indebtedness and Indebtedness under the Credit
Agreements, in each case as in effect on the date of the Indenture, and any
amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings thereof, provided that such
amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacement or refinancings are not materially more
restrictive, taken as a whole, with respect to such dividend and other
payment restrictions than those contained in such Existing Indebtedness and
Indebtedness under Credit Agreements, as in effect on the date of the
Indenture;
(2) the Indenture, the Notes and the Subsidiary Guarantees;
(3) applicable law;
(4) (A) 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 acquisition (except to the extent such Indebtedness
was incurred in connection with or in contemplation of 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 of the Indenture
to be incurred, and (B) in the case of any such instruments of a Guarantor,
any amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings thereof, provided
that the amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacement or refinancings are no more
restrictive, taken as a whole, with respect to such dividend and other
payment restrictions than those contained in such instrument at the time of
acquisition;
(5) customary non-assignment provisions in leases entered into in the
ordinary course of business and consistent with past practices;
(6) Capital Lease Obligations, mortgage financings or purchase money
obligations of a Guarantor permitted to be incurred under the Indenture
that impose restrictions of the nature described in clause (3) of the
preceding paragraph on the property acquired, constructed or improved
through such Capital Lease Obligations, mortgage financing or purchase
money obligations;
(7) any agreement for the sale or other disposition of a Restricted
Subsidiary that restricts distributions by that Restricted Subsidiary
pending its sale or other disposition;
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(8) Permitted Refinancing Indebtedness, provided that the restrictions
contained in the agreements governing such Permitted Refinancing
Indebtedness are not materially more restrictive, taken as a whole, than
those contained in the agreements governing the Indebtedness being
refinanced;
(9) Liens securing Indebtedness that limit the right of the debtor to
dispose of the assets subject to such Lien; and
(10) mortgage financings of the Company or a Guarantor not otherwise
covered in clauses (1) through (9) above and permitted to be incurred under
the Indenture so long as (A) such encumbrances and restrictions (x) apply
only in the event of a payment default or a default with respect to a
financial covenant contained in such financings or (y) arise in connection
with the creation of reserves for furniture, fixture and equipment, taxes,
insurance, interest, and for capital repair and replacement or similar
reserves, (B) the encumbrances and restrictions are not materially more
disadvantageous to the Holders of the Notes than is customary in comparable
financings and (C) the Company determines that (absent any payment default
or a default with respect to a financial covenant contained in such
financings) any such encumbrances or restrictions will not materially
affect the Company's ability to make interest and principal payments on the
Notes.
Merger, Consolidation or Sale of Assets
Neither the Company nor any Restricted Subsidiary may, directly or
indirectly: (1) consolidate or merge with or into another Person (whether or not
the Company or such Restricted Subsidiary is the surviving corporation); or (2)
sell, assign, transfer, convey, lease or otherwise dispose of all or
substantially all of the properties or assets of the Company and its
Subsidiaries taken as a whole, in one or more related transactions, to another
Person; unless:
(1) either: (a) the Company or such Restricted Subsidiary, as the case
may be, is the surviving corporation; or (b) the Person formed by or
surviving any such consolidation or merger (if other than the Company or
such Restricted Subsidiary) or to which such sale, assignment, transfer,
conveyance, lease 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;
(2) the Person formed by or surviving any such consolidation or merger
(if other than the Company or such Restricted Subsidiary) or the Person to
which such sale, assignment, transfer, conveyance, lease or other
disposition shall have been made assumes all the obligations of the Company
or such Restricted Subsidiary (if such Restricted Subsidiary is a
Guarantor), as the case may be, under the Notes, the Indenture and the
Registration Rights Agreement pursuant to agreements reasonably
satisfactory to the Trustee;
(3) immediately after such transaction no Default or Event of Default
exists; and
(4) if such transaction involves the Company, the Company or the
Person formed by or surviving any such consolidation or merger (if other
than the Company), or to which such sale, assignment, transfer, conveyance,
lease or other disposition shall have been made will, on the date of such
transaction after giving pro forma effect thereto and any related financing
transactions as if the same 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 Preferred Stock."
Upon any consolidation or merger, or any sale, assignment, transfer,
conveyance, lease or other disposition of all or substantially all of the
properties and assets of the Company or any Restricted Subsidiary in accordance
with the immediately preceding paragraphs, the successor Person formed by such
consolidation or into which the Company or such Restricted Subsidiary, as the
case may be, is merged or the successor Person to which such sale, assignment,
transfer, conveyance, lease or disposition is made shall succeed to, and may
exercise every right and power of, the Company or such Restricted Subsidiary, as
the case may be, under the Indenture and/or the Guarantees, as the case may be,
with the same effect as if such successor had been
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named as the Company or such Restricted Subsidiary, as the case may be, therein
and/or in the Guarantees, as the case may be. When a successor assumes all the
obligations of its predecessor under the Indenture, the Notes or a Guarantee, as
the case may be, the predecessor shall be released from those obligations;
provided that in the case of a transfer by lease, the predecessor shall not be
released from its obligations under the Indenture.
This "Merger, Consolidation or Sale of Assets" covenant will not apply to a
sale, assignment, transfer, conveyance, lease or other disposition of assets
between or among the Company and any of its Restricted Subsidiaries.
Transactions with Affiliates
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 transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate (each, an "Affiliate Transaction"), unless:
(1) 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
(2) the Company delivers to the Trustee:
(a) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of
$1.0 million, an Officers' Certificate certifying that such Affiliate
Transaction complies with this covenant; provided that such Officers'
Certificate shall not be required with respect to any Affiliate
Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $1.0 million and less than $5.0
million where such Transaction or Transactions are incurred in the
ordinary course of business of the Company or such Restricted
Subsidiary;
(b) 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 Board of Directors set forth in an
Officers' Certificate certifying that such Affiliate Transaction
complies with this covenant and that such Affiliate Transaction has been
approved by a majority of the disinterested members of the Board of
Directors; and
(c) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of
$15.0 million, an opinion as to the fairness to the Company or such
Restricted Subsidiary of such Affiliate Transaction from a financial
point of view issued by an accounting, appraisal or investment banking
firm of national standing.
The following items shall not be deemed to be Affiliate Transactions and,
therefore, will not be subject to the provisions of the prior paragraph:
(1) any employment agreement entered into by the Company or any of its
Restricted Subsidiaries in the ordinary course of business and consistent
with the past practice of the Company or such Restricted Subsidiary;
(2) transactions between or among the Company and/or its Restricted
Subsidiaries;
(3) payment of reasonable directors fees to Persons who are not
otherwise Affiliates of the Company;
(4) sales of Equity Interests (other than Disqualified Stock) to
Affiliates of the Company;
(5) Restricted Payments that are permitted by the provisions of the
Indenture described above under the caption "-- Restricted Payments"; and
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(6) any written agreement in existence on the date of the Indenture
between the Company and any Affiliate, and amendments from time to time
thereto, provided that any such amendment is not less favorable in any
material respect to the Company than the terms of such agreement as in
effect on the date of the Indenture.
Additional Subsidiary Guarantees
If the Company or any of its Restricted Subsidiaries acquires or creates
another Domestic Subsidiary after the date of the Indenture, then that newly
acquired or created Domestic Subsidiary must become a Guarantor and execute a
supplemental indenture and deliver an Opinion of Counsel to the Trustee.
Designation of Restricted and Unrestricted Subsidiaries
The Board of Directors may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if that designation would not cause a Default. If a
Restricted Subsidiary is designated as an Unrestricted Subsidiary, the aggregate
fair market value of all outstanding Investments owned by the Company and its
Restricted Subsidiaries in the Subsidiary so designated will be deemed to be a
Restricted Investment made as of the time of such designation and that
designation will only be permitted if such Investment would be permitted at that
time and if such Restricted Subsidiary otherwise meets the definition of an
Unrestricted Subsidiary. 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 (1) such
Indebtedness is permitted under the covenant described under the caption
"-- Certain Covenants -- Incurrence of Indebtedness and Issuance of Preferred
Stock," calculated on a pro forma basis as if such designation had occurred at
the beginning of the four-quarter reference period; and (2) no Default or Event
of Default would be in existence following such designation.
Sale and Leaseback Transactions
The Company will not, and will not permit any of its Restricted
Subsidiaries to, enter into any sale and leaseback transaction; provided that
the Company or any Restricted Subsidiary may enter into a sale and leaseback
transaction if:
(1) the Company or that Restricted Subsidiary, as applicable, could
have incurred Indebtedness in an amount equal to the Attributable Debt
relating to such sale and leaseback transaction under the Fixed Charge
Coverage Ratio test in the first paragraph of the covenant described above
under the caption "-- Incurrence of Indebtedness and Issuance of Preferred
Stock;"
(2) the gross cash proceeds of that sale and leaseback transaction are
at least equal to the fair market value, as determined in good faith by the
Board of Directors and set forth in an Officers' Certificate delivered to
the Trustee, of the property that is the subject of that sale and leaseback
transaction; and
(3) the transfer of assets in that sale and leaseback transaction is
permitted by, and the Company applies the proceeds of such transaction in
compliance with, the covenant described above under the caption
"-- Repurchase at the Option of Holders -- Asset Sales."
Limitation on Sale or Issuance of Capital Stock of Restricted Subsidiaries
The Company will not sell any shares of Capital Stock of a Restricted
Subsidiary, and will not permit any Restricted Subsidiary, directly or
indirectly, to issue or sell any shares of its Capital Stock except: (i) to the
Company or a Wholly Owned Restricted Subsidiary or (ii) (A) in compliance with
the covenant described under "Repurchase at the Option of Holders -- Asset
Sales" if, immediately after giving effect to such issuance or sale, such
Restricted Subsidiary would continue to be a Restricted Subsidiary or (B) if,
immediately after giving effect to such issuance or sale, such Restricted
Subsidiary would no longer be a Restricted Subsidiary and the Investment of the
Company in such Person after giving effect to such issuance
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or sale would have been permitted to be made under the covenant described under
"-- Restricted Payments" as if made on the date of such issuance or sale.
Notwithstanding the foregoing, (i) the Company may sell all, but not less than
all, of the Capital Stock of a Subsidiary as long as the Company is in
compliance with the terms of the covenant described under "-- Repurchase at the
Option of Holders -- Asset Sales" and (ii) the Company and its Restricted
Subsidiaries may issue directors' qualifying shares or shares issued to be held
by foreign nationals (in each case to the extent mandated by applicable law).
The Company will not sell any shares of preferred stock of any Restricted
Subsidiary and will not permit any Restricted Subsidiary, directly or
indirectly, to issue or sell any shares of its preferred stock to any Person
(other than to the Company or a Wholly Owned Restricted Subsidiary).
Limitations on Issuances of Guarantees of Indebtedness
The Company will not permit any of its Restricted Subsidiaries, directly or
indirectly, to Guarantee or pledge any assets to secure the payment of any other
Indebtedness of the Company unless such Restricted Subsidiary simultaneously
executes and delivers a supplemental indenture providing for the Guarantee of
the payment of the Notes by such Restricted Subsidiary, which Guarantee shall be
senior to or pari passu with such Subsidiary's Guarantee of or pledge to secure
such other Indebtedness unless such other Indebtedness is Senior Debt, in which
case the Guarantee of the Notes may be subordinated to the Guarantee of such
Senior Debt to the same extent as the Notes are subordinated to such Senior
Debt.
Notwithstanding the preceding paragraph, any Subsidiary Guarantee of the
Notes will provide by its terms that it will be automatically and
unconditionally released and discharged under the circumstances described above
under the caption "-- Subsidiary Guarantees."
Business Activities
The Company will not, and will not permit any Restricted Subsidiary to,
engage in any business other than Permitted Businesses, except to such extent as
would not be material to the Company and its Restricted Subsidiaries taken as a
whole.
Payments for Consent
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration to or for the benefit of any Holder of Notes for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of the Indenture or the Notes unless such consideration is offered to be paid
and is paid to all Holders of the Notes that consent, waive or agree to amend in
the time frame set forth in the solicitation documents relating to such consent,
waiver or agreement.
REPORTS
Whether or not required by the Commission, so long as any Notes are
outstanding, the Company will furnish to the Trustee and the Holders of Notes,
within the time periods specified in the Commission's rules and regulations:
(1) 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 on
the annual financial statements by the Company's certified independent
accountants; and
(2) all current reports that would be required to be filed with the
Commission on Form 8-K if the Company were required to file such reports.
In addition, whether or not required by the Commission, the Company will
file a copy of all of the information and reports referred to in clauses (1) and
(2) above with the Commission for public availability within the time periods
specified in the Commission's rules and regulations (unless the Commission will
not
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accept such a filing) and make such information available to securities analysts
and prospective investors upon request. In addition, the Company and the
Subsidiary Guarantors have agreed that, for so long as any Notes remain
outstanding, they will furnish to the Holders 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.
If the Company has designated any of its Subsidiaries as Unrestricted
Subsidiaries, then the quarterly and annual financial information required by
the preceding paragraphs shall include a reasonably detailed presentation,
either on the face of the financial statements or in the footnotes thereto, and
in "Management's Discussion and Analysis of Financial Condition and Results of
Operations," of the financial condition and results of operations of the Company
and its Restricted Subsidiaries separate from the financial condition and
results of operations of the Unrestricted Subsidiaries of the Company.
EVENTS OF DEFAULT AND REMEDIES
Each of the following is an Event of Default:
(1) default for 30 days in the payment when due of interest on, or
Liquidated Damages with respect to, the Notes whether or not prohibited by
the subordination provisions of the Indenture;
(2) 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 Indenture;
(3) failure by the Company or any of its Restricted Subsidiaries to
comply with the provisions described under the captions "-- Repurchase at
the Option of Holders -- Change of Control," "-- Repurchase at the Option
of Holders -- Asset Sales," "-- Certain Covenants -- Restricted Payments,"
"-- Certain Covenants -- Incurrence of Indebtedness and Issuance of
Preferred Stock" or "-- Certain Covenants -- Merger, Consolidation or Sale
of Assets";
(4) failure by the Company or any of its Restricted Subsidiaries to
comply with any of the other agreements in the Indenture for 60 days after
notice shall have been given to the Company by the Trustee or to the
Company and the Trustee by the holders of at least 25% in aggregate
principal amount of the Notes then outstanding;
(5) 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 Indenture, if that default:
(a) is caused by a failure to pay principal of, or interest or
premium, if any, on such Indebtedness prior to the expiration of the
grace period provided in such Indebtedness on the date of such default
(a "Payment Default"); or
(b) 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 under
which there has been a Payment Default or the maturity of which has been
so accelerated, aggregates $20.0 million or more;
(6) failure by the Company or any of its Restricted Subsidiaries to
pay final judgments aggregating in excess of $20.0 million, which judgments
are not paid, discharged or stayed for a period of 60 days;
(7) except as permitted by the Indenture, any Subsidiary 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 or any Guarantor,
or any Person acting on behalf of any Guarantor, shall deny or disaffirm
its obligations under its Subsidiary Guarantee; and
(8) certain events of bankruptcy or insolvency with respect to the
Company or any Restricted Subsidiary that constitutes a Significant
Subsidiary.
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In the case of an Event of Default arising from certain events of
bankruptcy or insolvency, with respect to the Company or any Restricted
Subsidiary that constitutes a Significant Subsidiary, all outstanding Notes will
become due and payable immediately without further action or notice. If any
other Event of Default occurs and is continuing, the Trustee or the Holders of
at least 25% in principal amount of the then outstanding Notes may declare all
the Notes to be due and payable immediately, provided that so long as any
Designated Senior Debt shall be outstanding, if any such other Event of Default
shall have occurred and be continuing, any such acceleration shall not be
effective until the earlier to occur of (x) five business days following
delivery by the Trustee or the Company of a written notice of such acceleration
of the Notes to each representative under Designated Senior Debt and (y) the
acceleration of any Indebtedness under any Designated Senior Debt.
Holders of the Notes may not enforce the Indenture or the Notes except as
provided in the Indenture. Subject to certain limitations, Holders of a majority
in principal amount of the then outstanding Notes may direct the Trustee in its
exercise of any trust or power. The 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 or Liquidated
Damages) if it determines that withholding notice is in their interest.
The Holders of a majority in aggregate principal amount of the Notes then
outstanding by notice to the Trustee may on behalf of the Holders of all of the
Notes waive any existing Default or Event of Default and its consequences under
the Indenture except a continuing Default or Event of Default in the payment of
interest or Liquidated Damages on, or the principal of, the Notes.
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 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 during any time that
the Notes are outstanding, 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, then the premium specified in the
Indenture shall also become immediately due and payable to the extent permitted
by law upon the acceleration of the Notes.
The Company is required to deliver to the Trustee annually a statement
regarding compliance with the Indenture. Upon becoming aware of any Default or
Event of Default, the Company is required to deliver to the 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
or any Guarantor, as such, shall have any liability for any obligations of the
Company or the Guarantors under the Notes, the Indenture, the Subsidiary
Guarantees or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder of Notes by accepting a Note waives
and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes. The waiver may not be effective to
waive liabilities under the federal securities laws.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
The Company may, at its option and at any time, elect to have all of its
obligations discharged with respect to the outstanding Notes and all obligations
of the Guarantors discharged with respect to their Subsidiary Guarantees ("Legal
Defeasance") except for:
(1) the rights of Holders of outstanding Notes to receive payments in
respect of the principal of, or interest or premium and Liquidated Damages,
if any, on such Notes when such payments are due from the trust referred to
below;
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(2) 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;
(3) the rights, powers, trusts, duties and immunities of the Trustee,
and the Company's and the Guarantors' obligations in connection therewith;
and
(4) the Legal Defeasance provisions of the 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 Indenture ("Covenant Defeasance")
and thereafter any omission to comply with those covenants shall not constitute
a Default or Event of Default with respect to the Notes. In the event Covenant
Defeasance occurs, certain events (not including non-payment, bankruptcy,
receivership, rehabilitation and insolvency events) described under "Events of
Default" will no longer constitute an Event of Default with respect to the
Notes.
In order to exercise either Legal Defeasance or Covenant Defeasance:
(1) the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders of the Notes, 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, or
interest and premium and Liquidated Damages, if any, on the outstanding
Notes on the stated maturity or on the applicable redemption date, as the
case may be, and the Company must specify whether the Notes are being
defeased to maturity or to a particular redemption date;
(2) in the case of Legal Defeasance, the Company shall have delivered
to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee
confirming that (a) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (b) since the date
of the 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 Notes 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;
(3) in the case of Covenant Defeasance, the Company shall have
delivered to the Trustee an Opinion of Counsel reasonably acceptable to the
Trustee confirming that the Holders of the outstanding Notes 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;
(4) no Default or Event of Default shall have occurred and be
continuing either: (a) on the date of such deposit; or (b) 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;
(5) 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 to which the Company or any of its Subsidiaries is
a party or by which the Company or any of its Subsidiaries is bound;
(6) the Company must have delivered to the Trustee an Opinion of
Counsel to the effect that, assuming no intervening bankruptcy of the
Company or any Guarantor between the date of deposit and the 91st day
following the deposit and assuming that no Holder is an "insider" of the
Company under applicable bankruptcy law, 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;
(7) the Company must deliver to the Trustee an Officers' Certificate
stating that the deposit was not made by the Company with the intent of
preferring the Holders of Notes over the other creditors of
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the Company with the intent of defeating, hindering, delaying or defrauding
creditors of the Company or others; and
(8) the Company must deliver to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
relating to the Legal Defeasance or the Covenant Defeasance have been
complied with.
AMENDMENT, SUPPLEMENT AND WAIVER
Except as provided in the next three succeeding paragraphs, the Indenture
or the Notes may be amended or supplemented with the consent of the Holders of
at least a majority in principal amount of the Notes then outstanding
(including, without limitation, consents obtained in connection with a purchase
of, or tender offer or exchange offer for, Notes), and any existing default or
compliance with any provision of the Indenture or the Notes may be waived with
the consent of the Holders of a majority in principal amount of the then
outstanding Notes (including, without limitation, consents obtained in
connection with a purchase of, or tender offer or exchange offer for, 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):
(1) reduce the principal amount of Notes whose Holders must consent to
an amendment, supplement or waiver;
(2) reduce the principal of or change the fixed maturity of any Note
or alter the provisions, or waive any payment, with respect to the
redemption of the Notes;
(3) reduce the rate of or change the time for payment of interest on
any Note;
(4) waive a Default or Event of Default in the payment of principal
of, or interest or premium, or Liquidated Damages, if any, on the Notes
(except a rescission of acceleration of the Notes by the Holders of at
least a majority in aggregate principal amount of the Notes and a waiver of
the payment default that resulted from such acceleration);
(5) make any Note payable in money other than that stated in the
Notes;
(6) make any change in the provisions of the Indenture relating to
waivers of past Defaults or the rights of Holders of Notes to receive
payments of principal of, or interest or premium or Liquidated Damages, if
any, on the Notes;
(7) release any Guarantor from any of its obligations under its
Subsidiary Guarantee or the Indenture, except in accordance with the terms
of the Indenture; or
(8) make any change in the preceding amendment and waiver provisions.
In addition, any amendment to, or waiver of, the provisions of the
Indenture relating to subordination that adversely affects the rights of the
Holders of the Notes will require the consent of the Holders of at least 75% in
aggregate principal amount of Notes then outstanding. In addition, any amendment
to, or waiver of, such subordination provisions may require the consent of the
holders of Senior Debt.
Notwithstanding the preceding, without the consent of any Holder of Notes,
the Company, the Guarantors and the Trustee may amend or supplement the
Indenture or the Notes:
(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated Notes in addition to or in place of
certificated Notes;
(3) to provide for the assumption of the Company's or any Guarantor's
obligations to Holders of Notes in the case of a merger or consolidation or
sale of all or substantially all of the Company's or such Guarantor's
assets;
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(4) 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 under the Indenture of any such Holder; or
(5) to comply with requirements of the Commission in order to effect
or maintain the qualification of the Indenture under the Trust Indenture
Act.
SATISFACTION AND DISCHARGE
The Indenture will be discharged and will cease to be of further effect as
to all Notes issued thereunder, when:
(1) either:
(a) all Notes that have been authenticated (except lost, stolen or
destroyed Notes that have been replaced or paid and Notes for whose
payment money has theretofore been deposited in trust and thereafter
repaid to the Company) have been delivered to the Trustee for
cancellation; or
(b) all Notes that have not been delivered to the Trustee for
cancellation have become due and payable by reason of the making of a
notice of redemption or otherwise or will become due and payable within
one year and the Company or any Guarantor has irrevocably deposited or
caused to be deposited with the Trustee as trust funds in trust solely
for the benefit of the Holders, cash in U.S. dollars, non-callable
Government Securities, or a combination thereof, in such amounts as will
be sufficient without consideration of any reinvestment of interest, to
pay and discharge the entire indebtedness on the Notes not delivered to
the Trustee for cancellation for principal, premium and Liquidated
Damages, if any, and accrued interest to the date of maturity or
redemption;
(2) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or shall occur as a result of such
deposit and such deposit will not result in a breach or violation of, or
constitute a default under, any other instrument to which the Company or
any Guarantor is a party or by which the Company or any Guarantor is bound;
(3) the Company or any Guarantor has paid or caused to be paid all
sums payable by it under the Indenture; and
(4) the Company has delivered irrevocable instructions to the Trustee
under the Indenture to apply the deposited money toward the payment of the
Notes at maturity or the redemption date, as the case may be.
In addition, the Company must deliver an Officers' Certificate and an
Opinion of Counsel to the Trustee stating that all conditions precedent to
satisfaction and discharge have been satisfied.
CONCERNING THE TRUSTEE
If the Trustee becomes a creditor of the Company or any Guarantor, the
Indenture limits its right 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 Trustee will be permitted to engage in other transactions;
however, if it 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 Notes
will have the right to direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee, subject to
certain exceptions. The Indenture provides that in case an Event of Default
shall occur and be continuing, the Trustee will be required, in the exercise of
its power, to use the degree of care of a prudent man in the conduct of his own
affairs. Subject to such provisions, the Trustee will be under no obligation to
exercise any of its rights or powers under the Indenture at the request of any
Holder of Notes, unless such Holder shall have offered to the Trustee security
and indemnity satisfactory to it against any loss, liability or expense.
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ADDITIONAL INFORMATION
Anyone who receives this Prospectus may obtain a copy of the Indenture and
Registration Rights Agreement without charge by writing to Florida Panthers
Holdings, Inc., 450 East Las Olas Boulevard, Suite 1400, Fort Lauderdale,
Florida 33301, Attention: William M. Pierce.
BOOK-ENTRY, DELIVERY AND FORM
The Notes are being offered and sold to qualified institutional buyers in
reliance on Rule 144A. Except as set forth below, Notes will be issued in
registered, global form in minimum denominations of $1,000 and integral
multiples of $1,000 in excess thereof. Notes will be issued at the closing of
the Private Debt Offering only against payment in immediately available funds.
The Notes initially will be represented by one or more Notes in registered,
global form without interest coupons (collectively, the "Global Notes"). The
Global Notes will be deposited upon issuance with the Trustee as custodian for
The Depository Trust Company ("DTC"), in New York, New York, and registered in
the name of DTC or its nominee, in each case for credit to an account of a
direct or indirect participant in DTC as described below.
Except as set forth below, the Global Notes may be transferred, in whole
and not in part, only to another nominee of DTC or to a successor of DTC or its
nominee. Beneficial interests in the Global Notes may not be exchanged for Notes
in certificated form except in the limited circumstances described below. See
"--Exchange of Global Notes for Certificated Notes." Except in the limited
circumstances described below, owners of beneficial interests in the Global
Notes will not be entitled to receive physical delivery of Notes in certificated
form.
The Notes (including beneficial interests in the Global Notes) will be
subject to certain restrictions on transfer and will bear a restrictive legend
as described under "Notice to Investors." In addition, transfers of beneficial
interests in the Global Notes will be subject to the applicable rules and
procedures of DTC and its direct or indirect participants, which may change from
time to time.
DEPOSITORY PROCEDURES
The following description of the operations and procedures of DTC are
provided solely as a matter of convenience. These operations and procedures are
solely within the control of DTC and are subject to changes by them. The Company
takes no responsibility for these operations and procedures and urges investors
to contact the system or their participants directly to discuss these matters.
DTC has advised the Company that DTC is a limited-purpose trust company
created to hold securities for its participating organizations (collectively,
the "Participants") and to facilitate the clearance and settlement of
transactions in those securities between Participants through electronic
book-entry changes in accounts of its Participants. The Participants include
securities brokers and dealers (including the Initial Purchasers), banks, trust
companies, clearing corporations and certain other organizations. Access to
DTC's system is also available to other entities such as banks, brokers, dealers
and trust companies that clear through or maintain a custodial relationship with
a Participant, either directly or indirectly (collectively, the "Indirect
Participants"). Persons who are not Participants may beneficially own securities
held by or on behalf of DTC only through the Participants or the Indirect
Participants. The ownership interests in, and transfers of ownership interests
in, each security held by or on behalf of DTC are recorded on the records of the
Participants and Indirect Participants.
DTC has also advised the Company that, pursuant to procedures established
by it:
(1) upon deposit of the Global Notes, DTC will credit the accounts of
Participants designated by the Initial Purchasers with portions of the
principal amount of the Global Notes; and
(2) ownership of these interests in the Global Notes will be shown on,
and the transfer of ownership thereof will be effected only through,
records maintained by DTC (with respect to the Participants) or by
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the Participants and the Indirect Participants (with respect to other
owners of beneficial interest in the Global Notes).
Investors in the Global Notes who are Participants in DTC's system may hold
their interests therein directly through DTC. Investors in the Global Notes who
are not Participants may hold their interests therein indirectly through
organizations which are Participants in such system. All interests in a Global
Note may be subject to the procedures and requirements of DTC. Those interests
held through a Participant may also be subject to the procedures and
requirements of such Participant. 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 beneficial interests in a Global Note to
such Persons will be limited to that extent. Because DTC can act only on behalf
of Participants, which in turn act on behalf of Indirect Participants, the
ability of a Person having beneficial interests in a Global Note to pledge such
interests to Persons that do not participate in the DTC system, or otherwise
take actions in respect of such interests, may be affected by the lack of a
physical certificate evidencing such interests.
EXCEPT AS DESCRIBED BELOW, OWNERS OF INTEREST IN THE GLOBAL NOTES WILL NOT
HAVE NOTES REGISTERED IN THEIR NAMES, WILL NOT RECEIVE PHYSICAL DELIVERY OF
NOTES IN CERTIFICATED FORM AND WILL NOT BE CONSIDERED THE REGISTERED OWNERS OR
"HOLDERS" THEREOF UNDER THE INDENTURE FOR ANY PURPOSE.
Payments in respect of the principal of, and interest and premium and
Liquidated Damages, if any, on a Global Note registered in the name of DTC or
its nominee will be payable to DTC in its capacity as the registered Holder
under the Indenture. Under the terms of the Indenture, the Company and the
Trustee will treat the Persons in whose names the Notes, including the Global
Notes, are registered as the owners thereof for the purpose of receiving
payments and for all other purposes. Consequently, neither the Company, the
Trustee nor any agent of the Company or the Trustee has or will have any
responsibility or liability for:
(1) any aspect of DTC's records or any Participant's or Indirect
Participant's records relating to or payments made on account of beneficial
ownership interest in the Global Notes or for maintaining, supervising or
reviewing any of DTC's records or any Participant's or Indirect
Participant's records relating to the beneficial ownership interests in the
Global Notes; or
(2) any other matter relating to the actions and practices of DTC or
any of its Participants or Indirect Participants.
DTC has advised the Company 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 unless DTC has reason to believe it will not receive
payment on such payment date. Each relevant Participant is credited with an
amount proportionate to its beneficial ownership of an interest in the principal
amount of the relevant security as shown on the records of DTC. Payments by the
Participants and the Indirect Participants to the beneficial owners of Notes
will be governed by standing instructions and customary practices and will be
the responsibility of the Participants or the Indirect Participants and will not
be the responsibility of DTC, the Trustee or the Company. Neither the Company
nor the Trustee will be liable for any delay by DTC or any of its Participants
in identifying the beneficial owners of the Notes, and the Company and the
Trustee may conclusively rely on and will be protected in relying on
instructions from DTC or its nominee for all purposes.
Subject to the transfer restrictions set forth under "Notice to Investors,"
transfers between Participants in DTC will be effected in accordance with DTC's
procedures, and will be settled in same-day funds.
DTC has advised the Company that it will take any action permitted to be
taken by a Holder of Notes only at the direction of one or more Participants to
whose account DTC has credited the interests in the Global Notes and only in
respect of such portion of the aggregate principal amount of the Notes as to
which such Participant or Participants has or have given such direction.
However, if there is an Event of Default under the Notes, DTC reserves the right
to exchange the Global Notes for legended Notes in certificated form, and to
distribute such Notes to its Participants.
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Although DTC has agreed to the foregoing procedures to facilitate transfers
of interests in the Global Notes among participants in DTC, it is under no
obligation to perform or to continue to perform such procedures, and may
discontinue such procedures at any time. Neither the Company nor the Trustee nor
any of their respective agents will have any responsibility for the performance
by DTC or its participants or indirect participants of its obligations under the
rules and procedures governing its operations.
EXCHANGE OF GLOBAL NOTES FOR CERTIFICATED NOTES
A Global Note is exchangeable for definitive Notes in registered
certificated form ("Certificated Notes") if:
(1) DTC (a) notifies the Company that it is unwilling or unable to
continue as depositary for the Global Notes and the Company fails to
appoint a successor depositary or (b) has ceased to be a clearing agency
registered under the Exchange Act;
(2) the Company, at its option, notifies the Trustee in writing that
it elects to cause the issuance of the Certificated Notes; or
(3) there shall have occurred and be continuing a Default or Event of
Default with respect to the Notes.
In addition, beneficial interests in a Global Note may be exchanged for
Certificated Notes upon prior written notice given to the Trustee by or on
behalf of DTC in accordance with the Indenture. In all cases, Certificated Notes
delivered in exchange for any Global Note or beneficial interests in Global
Notes will be registered in the names, and issued in any approved denominations,
requested by or on behalf of the depositary (in accordance with its customary
procedures) and will bear the restrictive legend referred to in "Notice to
Investors," unless that legend is not required by applicable law.
EXCHANGE OF CERTIFICATED NOTES FOR GLOBAL NOTES
Certificated Notes may not be exchanged for beneficial interests in any
Global Note unless the transferor first delivers to the Trustee a written
certificate (in the form provided in the Indenture) to the effect that such
transfer will comply with the appropriate transfer restrictions applicable to
such Notes. See "Notice to Investors."
SAME DAY SETTLEMENT AND PAYMENT
The Company will make payments in respect of the Notes represented by the
Global Notes (including principal, premium, if any, interest and Liquidated
Damages, if any) by wire transfer of immediately available funds to the accounts
specified by the Global Note Holder. The Company will make all payments of
principal, interest and premium and Liquidated Damages, if any, with respect to
Certificated Notes by wire transfer of immediately available funds to the
accounts specified by the Holders thereof or, if no such account is specified,
by mailing a check to each such Holder's registered address. The Notes
represented by the Global Notes have been designated eligible to trade in the
PORTAL Market and to trade in DTC's Same-Day Funds Settlement System, and any
permitted secondary market trading activity in such Notes will, therefore, be
required by DTC to be settled in immediately available funds. The Company
expects that secondary trading in any Certificated Notes will also be settled in
immediately available funds.
CERTAIN DEFINITIONS
Set forth below are certain defined terms used in the Indenture. Reference
is made to the Indenture for a full disclosure of all such terms, as well as any
other capitalized terms used herein for which no definition is provided.
"Acquired Debt" means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such other
Person is merged with or into or became a Subsidiary of such specified
Person, whether or not such Indebtedness is incurred in
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connection with, or in contemplation of, such other Person merging with or
into, or becoming a Subsidiary of, such specified Person; and
(2) 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,"
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 Voting Stock of a
Person with the power to vote 10% or more of the total votes entitled to be cast
on any matter submitted to a vote of the shareholders of such Person shall be
deemed to be control. For purposes of this definition, the terms "controlling,"
"controlled by" and "under common control with" shall have correlative meanings.
"Asset Sale" means:
(a)(1) the sale, lease, conveyance or other disposition of any assets
or rights; provided that the sale, conveyance or other disposition of all
or substantially all of the assets of the Company and its Restricted
Subsidiaries taken as a whole will be governed by the provisions of the
Indenture described above under the caption "-- Repurchase at the Option of
Holders -- Change of Control" and/or the provisions described above under
the caption "-- Certain Covenants -- Merger, Consolidation or Sale of
Assets" and not by the provisions of the Asset Sale covenant; and
(2) the issuance of Equity Interests by any of the Company's
Restricted Subsidiaries or the sale of Equity Interests in any of its
Subsidiaries.
(b) Notwithstanding the preceding, the following items shall not be
deemed to be Asset Sales:
(1) any single transaction or series of related transactions that
involves assets having a fair market value of less than $1.0 million;
(2) a transfer of assets between or among the Company and its
Restricted Subsidiaries;
(3) an issuance of Equity Interests by a Restricted Subsidiary to the
Company or to another Restricted Subsidiary;
(4) the sale or lease of equipment, inventory, accounts receivable or
other assets in the ordinary course of business;
(5) the sale or other disposition of cash or Cash Equivalents;
(6) any exchange of like property pursuant to Section 1031 of the
Internal Revenue Code of 1986, as amended, for use in a Permitted Business;
and
(7) a Restricted Payment or Permitted Investment that is permitted by
the covenant described above under the caption "-- Certain
Covenants -- Restricted Payments."
(c) The sale of Florida Panthers Hockey Club, Ltd. (the "Club") or the
assets owned by the Club, including the National Hockey League franchise
for the team known as the Florida Panthers (the "Hockey Assets"):
(i) resulting from the exercise of rights and remedies pursuant to
the Amended and Restated Credit Agreement dated as of December 1, 1997
among The Chase Manhattan Bank, The Chase Manhattan Bank, as
Administrative Agent, and the Club (the "Hockey Club Loan"), or any
credit agreement evidencing any refinancing of such facility secured by
the Club or the Hockey Assets; and
(ii) in accordance with that certain letter agreement dated
December 15, 1997 by and among the Club, the National Hockey League, The
Chase Manhattan Bank, among others (or any similar letter agreement
acknowledging National Hockey League rights of consent in respect of any
sale of the Club or the Hockey Assets entered into in connection with
any refinancing of the Hockey Club Loan),
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shall be an Asset Sale that is required to comply with the provisions
described under the caption "-- Repurchase at the Option of the
Holders--Asset Sales", but shall be deemed to satisfy clauses (1), (2) and
(3) of the first paragraph thereunder if such sale is approved or is
otherwise not objected to by the National Hockey League.
"Attributable Debt" in respect of a sale and leaseback transaction means,
at the time of determination, the present value of the obligation of the lessee
for net rental payments during the remaining term of the lease included in such
sale and leaseback transaction including any period for which such lease has
been extended or may, at the option of the lessor, be extended. Such present
value shall be calculated using a discount rate equal to the rate of interest
implicit in such transaction, determined in accordance with GAAP.
"Beneficial Owner" has the meaning assigned to such term in Rule 13d-3 and
Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular "person" (as that term is used in Section 13(d)(3)
of the Exchange Act), such "person" shall be deemed to have beneficial ownership
of all securities that such "person" has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only upon the occurrence of a subsequent condition. The terms
"Beneficially Owns" and "Beneficially Owned" shall have a corresponding meaning.
"Board of Directors" means:
(1) with respect to a corporation, the board of directors of the
corporation;
(2) with respect to a partnership, the Board of Directors of the
general partner of the partnership; and
(3) with respect to any other Person, the board or committee of such
Person serving a similar function.
"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 that time be required to be capitalized on a balance sheet in accordance with
GAAP.
"Capital Stock" means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock;
(3) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited); and
(4) 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:
(1) United States dollars;
(2) securities issued or directly and fully guaranteed or insured by
the United States government or any agency or instrumentality thereof
(provided that the full faith and credit of the United States is pledged in
support thereof) having maturities of less than one year from the date of
acquisition;
(3) certificates of deposit and eurodollar time deposits with
maturities of less than one year from the date of acquisition, bankers'
acceptances with maturities not exceeding six months and overnight bank
deposits, in each case, with any domestic commercial bank having capital
and surplus in excess of $500.0 million;
(4) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (2) and (3) above
entered into with any financial institution meeting the qualifications
specified in clause (3) above;
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(5) commercial paper having the highest rating obtainable from Moody's
Investors Service, Inc. or Standard & Poor's Rating Services and in each
case maturing within nine months after the date of acquisition; and
(6) money market funds which invest substantially all of their assets
in securities which constitute Cash Equivalents of the kinds described in
clauses (1) through (5) of this definition.
"Change of Control" means the occurrence of any of the following:
(1) the direct or indirect sale, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one or a
series of related transactions, of all or substantially all of the
properties or assets of the Company and its Restricted Subsidiaries, taken
as a whole, to any "person" (as that term is used in Section 13(d)(3) of
the Exchange Act) other than a Principal or a Related Party of a Principal;
(2) the adoption of a plan relating to the liquidation or dissolution
of the Company;
(3) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that any
"person" (as defined above) other than the Principal and his Related
Parties, becomes the Beneficial Owner, directly or indirectly, of Voting
Stock of the Company with the power to vote 50% or more of the total votes
entitled to be cast on any matter submitted to a vote of shareholders;
(4) during any consecutive two year period, individuals who at the
beginning of such period constituted the Board of Directors of the Company
(together with any new directors whose election to such Board of Directors,
or whose nomination for election by the stockholders of the Company, was
approved by a vote of a majority of the directors then still in office who
were either directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority of the Board of Directors of the Company then in
office; or
(5) the Company consolidates with, or merges with or into, any Person,
or any Person consolidates with, or merges with or into, the Company, in
any such event pursuant to a transaction in which any of the outstanding
Voting Stock of the Company or such other Person is converted into or
exchanged for cash, securities or other property, other than any such
transaction where the Voting Stock of the Company outstanding immediately
prior to such transaction is converted into or exchanged for Voting Stock
(other than Disqualified Stock) of the surviving or transferee Person
constituting a majority of the outstanding shares of such Voting Stock of
such surviving or transferee Person (immediately after giving effect to
such issuance) and no Person other than the Principal and his Related
Parties, becomes the Beneficial Owner, directly or indirectly, of Voting
Stock of such Person with the power to vote 50% or more of the total votes
entitled to be cast on any matter submitted to a vote of shareholders.
"Consolidated Cash Flow" means, with respect to any specified Person for
any period, the Consolidated Net Income of such Person for such period:
(1) plus 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;
(2) plus 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
debt issuance costs and 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, imputed interest with respect to Attributable Debt,
commissions, discounts and other fees and charges incurred in respect of
letter of credit or bankers' acceptance financings, and net of the effect
of all payments made or received pursuant to Hedging Obligations or
Currency Agreements, but excluding imputed interest relating to payments
described in clause (ii) of the definition of Permitted Seller Note
Payments), to the extent that any such expense was deducted in computing
such Consolidated Net Income;
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(3) plus 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 expenses
(excluding any such non-cash expense to the extent that it represents an
accrual of or reserve for cash expenses in any future period or
amortization of a prepaid cash expense that was paid in a prior period) of
such Person and its Subsidiaries for such period to the extent that such
depreciation, amortization and other non-cash expenses were deducted in
computing such Consolidated Net Income;
(4) plus the increase or minus the decrease in the amount of deferred
Premier Club membership fees reflected as a component of deferred revenue
on the consolidated balance sheets of the Company at the beginning and end
of such period plus the decrease or minus the increase in Premier Club
notes receivable reflected on such consolidated balance sheets (without
taking into account any write-offs related to such amounts) less all
expenses during such period in connection with such Premier Club operations
(which were not otherwise included in computing Consolidated Net Income for
such period);
(5) minus non-cash items increasing such Consolidated Net Income for
such period, other than the accrual of revenue in the ordinary course of
business, in each case, on a consolidated basis and determined in
accordance with GAAP.
Notwithstanding the preceding, the provision for taxes based on the income
or profits of, and the depreciation and amortization and other non-cash expenses
of, a Restricted Subsidiary of the Company shall be added to Consolidated Net
Income to compute Consolidated Cash Flow of the Company only to the extent that
a corresponding amount would be permitted at the date of determination to be
dividend to the Company by such Restricted Subsidiary without prior governmental
approval (that has not been obtained), and without direct or indirect
restriction pursuant to the terms of its charter and all agreements,
instruments, judgments, decrees, orders, statutes, rules and governmental
regulations applicable to that Subsidiary or its stockholders.
"Consolidated Net Income" means, with respect to any specified 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:
(1) the Net Income (but not loss) 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 specified Person or a Wholly Owned
Restricted Subsidiary thereof;
(2) 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 an amount equal to such Net
Income would not have been permitted on or prior to the date of
determination 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;
(3) 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; and
(4) the cumulative effect of a change in accounting principles shall
be excluded.
"Continuing Directors" means, as of any date of determination, any member
of the Board of Directors of the Company who:
(1) was a member of such Board of Directors on the date of the
Indenture; or
(2) was nominated for election or elected to such Board of Directors
with the approval of a majority of the Continuing Directors who were
members of such Board at the time of such nomination or election.
"Credit Agreements" means the New Credit Facility, and the Amended and
Restated Credit Agreement among The Chase Manhattan Bank, The Chase Manhattan
Bank, as Administrative Agent, and Florida Panthers Hockey Club, Ltd. dated as
of December 1, 1997, in each case, including any related notes,
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guarantees, collateral documents, instruments and agreements executed in
connection therewith, and in each case, as amended, modified, renewed, refunded,
replaced or refinanced from time to time.
"Credit Facilities" means, one or more debt facilities (including, without
limitation, the Credit Agreements) or commercial paper facilities, in each case
with banks or other institutional lenders providing for revolving credit loans,
lines-of-credit, term loans, receivables financing (including through the sale
of receivables to such lenders or to special purpose entities formed to borrow
from such lenders against such receivables) or letters of credit, in each case,
as amended, restated, modified, renewed, refunded, replaced or refinanced in
whole or in part from time to time.
"Currency Agreements" means any spot or forward foreign exchange agreements
and currency swap, currency option or other similar financial agreements or
arrangements entered into by the Company or any of its Restricted Subsidiaries
in the ordinary course of business and designed to protect against or manage
exposure to fluctuations in foreign currency exchange rates.
"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, in each case at the option of the holder thereof), or upon the
happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or redeemable at the option of the holder
thereof, in whole or in part, on or prior to the date that is 91 days after the
date on which the Notes mature. Notwithstanding the preceding sentence, any
Capital Stock that would constitute Disqualified Stock solely because the
holders thereof have the right to require the Company to repurchase such Capital
Stock upon the occurrence of a change of control or an asset sale shall not
constitute Disqualified Stock if the terms of such Capital Stock provide that
the Company may not repurchase or redeem any such Capital Stock pursuant to such
provisions unless such repurchase or redemption complies with the covenant
described above under the caption "-- Certain Covenants -- Restricted Payments."
"Domestic Subsidiary" means any Restricted Subsidiary that was formed under
the laws of the United States or any state thereof or the District of Columbia
or that guarantees or otherwise provides direct credit support for any
Indebtedness of the Company.
"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).
"Existing Credit Agreements" means the New Credit Facility, the Amended and
Restated Credit Agreement among The Chase Manhattan Bank, The Chase Manhattan
Bank, as Administrative Agent, and Florida Panthers Hockey Club, Ltd. dated as
of December 1, 1997, the Amended and Restated Loan Agreement among Panthers BRHC
Limited, The Bank of Nova Scotia, New York agency, individually and as
Administrative Agent for itself and the lenders, and the lenders signatory
thereto, dated as of June 25, 1997, and the Deed of Trust, Security Agreement,
Assignment of Rents and Revenues and Fixture Filing dated as of June 4, 1996, as
amended, by Biltmore Hotel Partners, L.L.L.P., an Arizona limited liability
limited partnership (formerly Biltmore Hotel Partners, an Arizona general
partnership), as Trustor, in favor of First American Title Insurance Company, a
California corporation, as Trustee, and American General Life Insurance Company,
a Texas corporation, The Variable Annuity Life Insurance Company, a Texas
corporation, the Franklin Life Insurance Company, an Illinois corporation, and
American General Life and Accident Insurance Company, a Tennessee corporation,
collectively, as Beneficiary, in each case, including any related notes,
guarantees, collateral documents, instruments and agreements executed in
connection therewith, and, in each case, as amended or modified from time to
time.
"Existing Indebtedness" means up to $564.3 million in aggregate principal
amount of Indebtedness of the Company and its Subsidiaries in existence on the
date of the Indenture, until such amounts are repaid, excluding any revolving
credit Indebtedness and letters of credit outstanding on the date of the
Indenture under any of the Credit Agreements.
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"Fixed Charges" means, with respect to any specified Person for any period,
the sum, without duplication, of:
(1) the consolidated interest expense of such Person and its
Subsidiaries for such period, whether paid or accrued, including, without
limitation, amortization of debt issuance costs and 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, imputed interest with respect to
Attributable Debt, commissions, discounts and other fees and charges
incurred in respect of letter of credit or bankers' acceptance financings,
and net of the effect of all payments made or received pursuant to Hedging
Obligations and Currency Agreements, but excluding imputed interest
relating to payments described in clause (ii) of the definition of
Permitted Seller Note Payments; plus
(2) the consolidated interest of such Person and its Restricted
Subsidiaries that was capitalized during such period; plus
(3) 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; plus
(4) the product of (a) all dividends, whether paid or accrued and
whether or not in cash, on any series of preferred stock of such Person or
any of its Restricted Subsidiaries, other than dividends on Equity
Interests payable solely in Equity Interests of the Company (other than
Disqualified Stock) or to the Company or a Restricted Subsidiary of the
Company, 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, expressed as a decimal, in
each case, on a consolidated basis and in accordance with GAAP.
"Fixed Charge Coverage Ratio" means with respect to any specified Person
for any period, the ratio of the Consolidated Cash Flow of such Person for such
period to the Fixed Charges of such Person for such period. In the event that
the specified Person or any of its Subsidiaries incurs, assumes, Guarantees,
repays, repurchases or redeems any Indebtedness or issues, repurchases or
redeems preferred stock subsequent to the commencement of the period for which
the Fixed Charge Coverage Ratio is being calculated and on or 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,
repayment, repurchase or redemption of Indebtedness, or such issuance,
repurchase or redemption of preferred stock, and the use of the proceeds
therefrom as if the same had occurred at the beginning of the applicable
four-quarter reference period.
In addition, for purposes of calculating the Fixed Charge Coverage Ratio:
(1) acquisitions that have been made by the specified Person 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 given pro forma effect as if they had
occurred on the first day of the four-quarter reference period and
Consolidated Cash Flow for such reference period shall be calculated on a
pro forma basis in accordance with Regulation S-X under the Securities Act,
but without giving effect to clause (3) of the proviso set forth in the
definition of Consolidated Net Income;
(2) 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
(3) 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 specified Person or any of its Subsidiaries following
the Calculation Date.
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"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 from time to time.
"Guarantee" means any guarantee of all or any part of any Indebtedness
other than by endorsement of negotiable instruments for collection in the
ordinary course of business, direct or indirect, in any manner, including,
without limitation, by way of a pledge of assets or through letters of credit or
reimbursement agreements in respect thereof.
"Guarantors" means each of:
(1) the Company's Subsidiaries existing on the date of the Indenture;
and
(2) any other subsidiary that executes a Subsidiary Guarantee in
accordance with the provisions of the Indenture;
and their respective successors and assigns.
"Hedging Obligations" means, with respect to any specified Person, the
obligations of such Person under:
(1) interest rate swap agreements, interest rate cap agreements and
interest rate collar agreements; and
(2) other agreements or arrangements designed to protect such Person
against fluctuations in interest rates.
"Indebtedness" means, with respect to any specified Person, any
indebtedness of such Person, whether or not contingent, in respect of:
(1) borrowed money;
(2) evidenced by bonds, notes, debentures or similar instruments or
letters of credit (or reimbursement agreements in respect thereof);
(3) banker's acceptances;
(4) representing Capital Lease Obligations;
(5) the balance deferred and unpaid of the bargained for consideration
or purchase price in respect of the acquisition of any property, except any
such balance that constitutes an accrued expense or trade payable; or
(6) representing any Hedging Obligations,
if and to the extent any of the preceding items (other than letters of credit
and Hedging Obligations) would appear as a liability upon a balance sheet of the
specified Person prepared in accordance with GAAP. In addition, the term
"Indebtedness" includes all Indebtedness of others secured by a Lien on any
asset of the specified Person (whether or not such Indebtedness is assumed by
the specified Person) and, to the extent not otherwise included, the Guarantee
by the specified Person of any Indebtedness of any other Person.
The amount of any Indebtedness outstanding as of any date shall be:
(1) the accreted value thereof, in the case of any Indebtedness issued
with original issue discount; and
(2) the principal amount thereof, together with any interest thereon
that is more than 30 days past due, in the case of any other Indebtedness.
"Investment" means, with respect to any Person, all direct or indirect
investments by such Person in other Persons (including Affiliates) in the forms
of loans (including Guarantees or other obligations), advances or capital
contributions (excluding commission, travel and similar advances to officers and
employees made in
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the ordinary course of business), purchases or other acquisitions for
consideration 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. If the Company or any Restricted Subsidiary of
the Company sells or otherwise disposes of any Equity Interests of any direct or
indirect Restricted Subsidiary of the Company such that, after giving effect to
any such sale or disposition, such Person is no longer a Restricted Subsidiary
of the Company, 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 Restricted Subsidiary not sold or disposed of in an
amount determined as provided in the final paragraph of the covenant described
above under the caption "-- Certain Covenants -- Restricted Payments." The
acquisition by the Company or any Restricted Subsidiary of the Company of a
Person that holds an Investment in a third Person shall be deemed to be an
Investment by the Company or such Restricted Subsidiary in such third Person in
an amount equal to the fair market value of the Investment held by the acquired
Person in such third Person in an amount determined as provided in the final
paragraph of the covenant described above under the caption "-- Certain
Covenants -- Restricted Payments."
"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.
"Net Income" means, with respect to any specified 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:
(1) 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; 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
(2) any extraordinary gain (but not loss), together with any related
provision for taxes on such extraordinary gain (but not loss).
"Net Proceeds" means the aggregate cash proceeds (including Cash
Equivalents) 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 sales
commissions, and any relocation expenses incurred as a result thereof, taxes
paid or payable as a result thereof, in each case, after taking into account any
available tax credits or deductions and any tax sharing arrangements, and
amounts required to be applied to the repayment of Indebtedness secured by a
Lien on the asset or assets that were the subject of such Asset Sale and any
reserve against indemnification obligations or for adjustment in respect of the
sale price of such asset or assets established in accordance with GAAP.
"New Credit Facility" means the Credit Agreement, to be dated as of April
21, 1999, by and among the Florida Panthers Hotel Corporation, a wholly-owned
subsidiary of the Company, Bear, Stearns & Co. Inc., as syndication agent, and
Bankers Trust Company, as administrative agent, providing for up to $146.0
million of revolving credit borrowings, including any related notes, guarantees,
collateral documents, instruments and agreements executed in connection
therewith, as in effect on the date of the Indenture.
"Non-Recourse Debt" means Indebtedness:
(1) 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;
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(2) 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 (other than the Notes) 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
(3) 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.
"Permitted Business" means any business engaged primarily in the leisure,
recreation, sports and entertainment industries and any related, ancillary or
complementary business.
"Permitted Investment" means:
(1) any Investment in the Company or in a Restricted Subsidiary of the
Company that is a Guarantor;
(2) any Investment in Cash Equivalents;
(3) 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 and
a Guarantor; or
(b) such Person 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
that is a Guarantor;
(4) any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in
compliance with the covenant described above under the caption
"-- Repurchase at the Option of Holders -- Asset Sales";
(5) any acquisition of assets solely in exchange for the issuance of
Equity Interests (other than Disqualified Stock) of the Company;
(6) Hedging Obligations;
(7) loans or advances to employees of the Company in the ordinary
course of business in aggregate amount outstanding at any one time not to
exceed $2.0 million; and
(8) other Investments in any Person having an aggregate fair market
value (measured on the date each such Investment was made and without
giving effect to subsequent changes in value), when taken together with all
other Investments made pursuant to this clause (8) since the date of the
Indenture, not to exceed $20.0 million.
"Permitted Liens" means:
(1) Liens, including floating liens, on the assets of the Company and
any Guarantor securing Senior Debt that was permitted by the terms of the
Indenture to be incurred;
(2) Liens in favor of the Company or any Restricted Subsidiary;
(3) Liens on property of a Person existing at the time such Person is
merged with or into or consolidated with the Company or any Restricted
Subsidiary of the Company; provided that such Liens were in existence prior
to the contemplation of such merger or consolidation and do not extend to
any assets other than those of the Person merged into or consolidated with
the Company or the Restricted Subsidiary;
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(4) Liens on property existing at the time of acquisition thereof by
the Company or any Restricted Subsidiary of the Company, provided that such
Liens were in existence prior to the contemplation of such acquisition and
do not extend to any property other than the property so acquired by the
Company or the Restricted Subsidiary;
(5) Liens existing on the date of the Indenture; and
(6) Liens incurred in the ordinary course of business of the Company
or any Restricted Subsidiary of the Company with respect to obligations
that do not exceed $5.0 million at any one time outstanding.
"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
(other than intercompany Indebtedness); provided that:
(1) 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 all accrued interest thereon
and the amount of all expenses and premiums incurred in connection
therewith);
(2) 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;
(3) 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
(4) such Indebtedness is incurred by (whether as borrower or
guarantor) the Person or Persons which is or are the obligor or obligors on
the Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded.
"Permitted Seller Note Payments" means: (i) any (x) purchase or redemption
of, or (y) the payment of any preference amount to any holder (all former owners
of the Arizona Biltmore Hotel) of, the 500,000 Class A Units (representing
limited partnership interests) issued under the Limited Partnership Agreement,
as in effect on the date of the Indenture, of Biltmore Hotel Partners, L.L.L.P.,
an Arizona limited liability limited partnership ("BHP Limited Partnership
Agreement") which owns the Arizona Biltmore Hotel and which was organized in
connection with the acquisition of such hotel; provided that the aggregate
amount paid under clause (i)(x) shall not exceed $500,000 and the aggregate
amount paid under clause (i)(y) shall not exceed $12,500 per year; (ii) any
purchase or redemption (for an aggregate amount not to exceed $33,333,333) of
the 33,333,333 Class E Units (or any Class C Units for which such Class E Units
may be converted) issued under the BHP Limited Partnership Agreement and held by
the former owners of the Arizona Biltmore Hotel as part of the consideration
paid in connection with the acquisition of the Arizona Biltmore Hotel, which
purchase or redemption shall be in accordance with the terms of the BHP Limited
Partnership Agreement and the Class E Unit or Class C Unit Exchange Agreements
each dated March 2, 1998; and (iii) any payment of fees (not to exceed
$3,000,000) on or prior to June 30, 2001 under Section 5.10(b) of the BHP
Limited Partnership Agreement, if such fees are deemed a distribution upon a
partnership interest and not a fee.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company or government or other entity.
"Principal" means H. Wayne Huizenga.
"Public Equity Offering" means an offer and sale of common stock (which is
not Disqualified Stock) of the Company made on a primary basis by the Company to
any Person other than a Subsidiary of the Company
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pursuant to a registration statement that has been declared effective by the
Commission pursuant to the Securities Act (other than a registration statement
on Form S-8 or otherwise relating to equity securities issuable under any
employee benefit plan of the Company).
"Qualified Equity Offering" means:
(1) any Public Equity Offering; or
(2) an offering of Capital Stock (which is not Disqualified Stock) of
the Company to any Person other than a Subsidiary of the Company with gross
proceeds to the Company in excess of $20.0 million.
"Related Party" means:
(1) any controlling stockholder, 80% (or more) owned Subsidiary, or
immediate family member (in the case of an individual) of the Principal; or
(2) any trust, corporation, partnership or other entity, the
beneficiaries, stockholders, partners, owners or Persons beneficially
holding an 80% or more controlling interest of which, consist of any one or
more of the Principal and/or such other Persons referred to in the
immediately preceding clause (1).
"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 an Unrestricted Subsidiary.
"Significant Subsidiary" means any Subsidiary that would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act, as such Regulation is in effect on the date
hereof, provided that the references to "10 percent" in such definition shall be
deemed to be "two percent".
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Subsidiary" means, with respect to any specified Person:
(1) 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
(2) 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).
"Subsidiary Guarantee" means a Guarantee of the Notes by a Guarantor.
"Unrestricted Subsidiary" means any Subsidiary of the Company that is
designated by the Board of Directors as an Unrestricted Subsidiary pursuant to a
Board Resolution and otherwise complies with the covenant "Designation of
Restricted and Unrestricted Subsidiaries," but only to the extent that such
Subsidiary:
(1) has no Indebtedness other than Non-Recourse Debt;
(2) 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;
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(3) is a Person with respect to which neither the Company nor any of
its Restricted Subsidiaries has any direct or indirect obligation (a) to
subscribe for additional Equity Interests or (b) to maintain or preserve
such Person's financial condition or to cause such Person to achieve any
specified levels of operating results; and
(4) has not guaranteed or otherwise directly or indirectly provided
credit support for any Indebtedness of the Company or any of its Restricted
Subsidiaries.
Any designation of a Subsidiary of the Company as an Unrestricted
Subsidiary shall be evidenced to the Trustee by filing with the Trustee a
certified copy of the Board Resolution giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
preceding conditions and was permitted by the covenant described above under the
caption "-- Certain Covenants -- Restricted Payments." If, at any time, any
Unrestricted Subsidiary would fail to meet the preceding requirements as an
Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of the Indenture 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 the caption "-- Certain
Covenants -- Incurrence of Indebtedness and Issuance of Preferred Stock," the
Company shall be in default of such covenant.
"Voting Stock" of any Person as of any date means the Capital Stock of such
Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing:
(1) 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
(2) the then outstanding principal amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" of any specified Person means a
Restricted 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
Restricted Subsidiaries of such Person and one or more Wholly Owned Restricted
Subsidiaries of such Person.
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REGISTRATION RIGHTS; LIQUIDATED DAMAGES
The following description is a summary of the material provisions of the
Registration Rights Agreement. It does not restate that agreement in its
entirety. We urge you to read the proposed form of Registration Rights Agreement
in its entirety because it, and not this description, defines your registration
rights as Holders of these Notes.
The Company, the Guarantors and the Initial Purchasers entered into the
Registration Rights Agreement at the closing of the Private Debt Offering.
Pursuant to the Registration Rights Agreement, the Company and the Guarantors
agreed to file with the Commission the Registration Statement of which this
Prospectus forms a part (the "Exchange Offer Registration Statement"). Upon the
effectiveness of the Exchange Offer Registration Statement, the Company and the
Guarantors agreed to offer to the holders of Old Notes pursuant to the Exchange
Offer who are able to make certain representations the opportunity to exchange
their Old Notes for New Notes.
If:
(1) the Company and the Guarantors are not permitted to consummate the
Exchange Offer because the Exchange Offer is not permitted by applicable
law or Commission policy; or
(2) any holder of Old Notes notifies the Company prior to the 20th day
following consummation of the Exchange Offer that:
(a) it is prohibited by law or Commission policy from participating
in the Exchange Offer; or
(b) that it may not resell the Exchange Notes acquired by it in the
Exchange Offer to the public without delivering a prospectus and the
prospectus contained in the Exchange Offer Registration Statement is not
appropriate or available for such resales; or
(c) that it is a broker-dealer and owns Notes acquired directly
from the Company or an affiliate of the Company,
the Company and the Guarantors will file with the Commission a Shelf
Registration Statement to cover resales of the Old Notes by the holders thereof
who satisfy certain conditions relating to the provision of information in
connection with the Shelf Registration Statement.
The Company and the Guarantors agreed to use their best efforts to cause
the applicable registration statement to be declared effective as promptly as
possible by the Commission.
The Registration Rights Agreement provides that:
(1) the Company and the Guarantors would file the Exchange Offer
Registration Statement with the Commission on or prior to 60 days after the
closing of the Private Debt Offering;
(2) the Company and the Guarantors will use their best efforts to have
the Exchange Offer Registration Statement declared effective by the
Commission on or prior to 120 days after the closing of the Private Debt
Offering;
(3) unless the Exchange Offer would not be permitted by applicable law
or Commission policy, the Company and the Guarantors agreed to
(a) commence the Exchange Offer; and
(b) use their best efforts to issue on or prior to 30 business
days, or longer, if required by the federal securities laws, after the
date on which the Exchange Offer Registration Statement is declared
effective by the Commission, Exchange Notes in exchange for all Old
Notes tendered prior thereto in the Exchange Offer; and
(4) if obligated to file the Shelf Registration Statement, the Company
and the Guarantors will use their best efforts to file the Shelf
Registration Statement with the Commission on or prior to 30 days after
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such filing obligation arises and to cause the Shelf Registration to be
declared effective by the Commission on or prior to 90 days after such
obligation arises.
If:
(1) the Company and the Guarantors fail to file any of the
registration statements required by the Registration Rights Agreement on or
before the date specified for such filing; or
(2) any of such registration statements is not declared effective by
the Commission on or prior to the date specified for such effectiveness
(the "Effectiveness Target Date"); or
(3) the Company and the Guarantors fail to consummate the Exchange
Offer within 30 business days of the Effectiveness Target Date with respect
to the Exchange Offer Registration Statement; or
(4) the Shelf Registration Statement or the Exchange Offer
Registration Statement is declared effective but thereafter ceases to be
effective or usable in connection with exchanges or resales of Notes during
the periods specified in the Registration Rights Agreement (each such event
referred to in clauses (1) through (4) above, a "Registration Default"),
then the Company and the Guarantors will pay Liquidated Damages to each holder
of Notes, with respect to the first 90-day period immediately following the
occurrence of the first Registration Default in an amount equal to $.05 per week
per $1,000 principal amount of Notes held by such holder.
The amount of the Liquidated Damages will increase by an additional $.05
per week per $1,000 principal amount of Notes with respect to each subsequent
90-day period until all Registration Defaults have been cured, up to a maximum
amount of Liquidated Damages for all Registration Defaults of $.50 per week per
$1,000 principal amount of Notes.
All accrued Liquidated Damages will be paid by the Company and the
Guarantors on each Damages Payment Date to the Global Note Holder by wire
transfer of immediately available funds or by federal funds check and to holders
of Certificated Notes by wire transfer to the accounts specified by them or by
mailing checks to their registered addresses if no such accounts have been
specified.
Following the cure of all Registration Defaults, the accrual of Liquidated
Damages will cease.
Holders of Notes will be required to make certain representations to the
Company (as described in the Registration Rights Agreement) in order to
participate in the Exchange Offer and will be required to deliver certain
information to be used in connection with the Shelf Registration Statement and
to provide comments on the Shelf Registration Statement within the time periods
set forth in the Registration Rights Agreement in order to have their Notes
included in the Shelf Registration Statement and benefit from the provisions
regarding Liquidated Damages set forth above. By acquiring Notes, a holder will
be deemed to have agreed to indemnify the Company and the Guarantors against
certain losses arising out of information furnished by such holder in writing
for inclusion in any Shelf Registration Statement. Holders of Notes will also be
required to suspend their use of the prospectus included in the Shelf
Registration Statement under certain circumstances upon receipt of written
notice to that effect from the Company.
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PLAN OF DISTRIBUTION
Each broker-dealer that receives New Notes for its own account pursuant to
the Exchange Offer must acknowledge that it will deliver a prospectus in
connection with any resale of the New Notes. This Prospectus, as it may be
amended or supplemented from time to time, may be used by a broker-dealer in
connection with resales of New Notes received in exchange for Old Notes acquired
as a result of market-making activities or other trading activities. Any such
broker-dealer who intends to use this Prospectus in connection with the resale
of New Notes received in exchange for Old Notes pursuant to the Exchange Offer
must notify the Company, or cause the Company to be notified, on or prior to the
Expiration Date, that it is such a broker-dealer.
The Company will not receive any proceeds from the issuance of the New
Notes offered hereby or from any sale of New Notes by broker-dealers. New Notes
received by broker-dealers for their own account pursuant to the Exchange Offer
may be sold from time to time in one or more transactions in the over-the-
counter market, in negotiated transactions, through the writing of options on
the New Notes or a combination of such methods of resale, at market prices
prevailing at the time of resale, at prices related to such prevailing market
prices or negotiated prices. Any such resale may be made directly to purchasers
or to or through brokers or dealers who may receive compensation in the form of
commissions or concession from any such broker-dealer and/or the purchasers of
any New Notes. Any broker-dealer that resells New Notes that were received by it
for its own account pursuant to the Exchange Offer and any broker-dealer that
participates in a distribution of New Notes may be deemed to be an "underwriter"
within the meaning of the Securities Act, and any profit on any resale of New
Notes and any commissions or concessions received by any such persons may be
deemed to be underwriting compensation under the Securities Act. The Letter of
Transmittal states that by acknowledging that it will deliver and by delivering
a prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
The Company has not entered into any arrangement or understanding with any
person to distribute the New Notes to be received in the Exchange Offer, and to
the best of the Company's information and belief, each person participating in
the Exchange Offer is acquiring the New Notes in its ordinary course of business
and has no arrangement or understanding with any person to participate in the
distribution of the New Notes to be received in the Exchange Offer.
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CERTAIN UNITED STATES FEDERAL TAX CONSIDERATIONS
The following is a summary of certain United States federal income tax
considerations relating to the purchase, ownership and disposition of the Notes,
but does not purport to be a complete analysis of all the potential tax
considerations relating thereto (possibly with retroactive effect). This summary
is based on the Internal Revenue Code of 1986, as amended (the "Code"),
existing, temporary, and proposed Treasury Regulations, and laws, rulings and
decisions now in effect, all of which are subject to change. This summary deals
only with holders that will hold Notes as "capital assets" (within the meaning
of Section 1221 of the Code). This summary does not address holders subject to
special rules, such as tax-exempt organizations, insurance companies, dealers in
securities or currencies, or persons that will hold Notes as a position in a
hedging transaction, "straddle" or "conversion transaction" for tax purposes.
For the purposes of this discussion, a "U.S. holder" means any holder of a
Note that is (i) a citizen or resident of the United States, (ii) a corporation,
partnership or other entity created or organized in or under the laws of the
United States or any state thereof (except, in the case of a partnership, to the
extent future Treasury Regulations provide otherwise), (iii) an estate the
income of which is subject to United States federal income taxation regardless
of its source, (iv) a trust other than a "foreign trust," as such term is
defined in Section 7701(a)(31) of the Code or (v) otherwise subject to United
States federal income tax on a net income basis in respect of its worldwide
taxable income. A "Non-U.S. holder" means any holder of a Note that is not a
U.S. holder.
THE FOLLOWING DISCUSSION OF CERTAIN FEDERAL INCOME TAX CONSEQUENCES IS FOR
GENERAL INFORMATION ONLY AND IS NOT TAX ADVICE. ACCORDINGLY, INVESTORS
CONSIDERING THE PURCHASE OF NOTES SHOULD CONSULT THEIR OWN TAX ADVISERS WITH
RESPECT TO THE APPLICATION OF THE UNITED STATES FEDERAL INCOME AND ESTATE TAX
LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY TAX CONSEQUENCES ARISING
UNDER THE LAWS OF ANY STATE, LOCAL OR FOREIGN TAXING JURISDICTION OR UNDER ANY
APPLICABLE TAX TREATY.
UNITED STATES FEDERAL INCOME TAXATION OF U.S. HOLDERS
Payment of Interest
Stated interest on a Note generally will be includable in the income of the
U.S. holder of such Note as ordinary income at the time such interest is
received or accrued, in accordance with such holder's method of accounting for
United States federal income tax purposes because such interest represents
qualified stated interest. Further, if the Notes are issued with original issue
discount ("OID"), a holder must include OID in income as interest over the term
of the Note under a constant yield method in advance of the receipt of cash
representing that income. However, if the amount of OID with respect to the
Notes is less than a de minimis amount, the amount of OID is treated as zero.
The de minimis amount is an amount equal to 0.25% multiplied by the principal
amount generally of the Notes multiplied by the number of complete years to
maturity from the issue date. It is expected that the Notes will be issued
without OID.
OID is equal to the "stated redemption price at maturity" minus the
"original issue price." The stated redemption price at maturity generally equals
the principal amount. When the issuer has an unconditional call option (i.e., an
option to call all or a portion of the debt at a fixed premium), the issuer is
considered to exercise, or not exercise, the option in a manner that minimizes
the yield on the debt instrument. After April 15, 2004, the Company has an
unconditional call option to redeem the notes at specified premiums if redeemed
during the twelve-month period beginning on April 15 of 2004, 2005 or 2006. If
the yield to maturity of the Notes exceeds the yield to maturity of the Notes
determined by assuming the call option is exercised, the maturity date would be
determined by assuming the call option is exercised and the stated redemption
price at maturity would include the call premium. It is not expected that this
condition will be satisfied and, therefore, the call should not be considered as
exercised and the call premium should not be included in the stated redemption
price at maturity.
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The Notes may be redeemed prior to their stated maturity at the option of
the Company or the U.S. holder upon certain other circumstances. The Company
believes that none of such redemption rights or obligations are more likely than
not to occur, and thus, under applicable Treasury Regulations, none of such
redemption rights or obligations will affect the yield of the Notes or increase
the stated redemption price at maturity.
The original issue price for the Notes is the price at which a substantial
amount of the Notes is sold for money. The sale of the Notes to the Initial
Purchasers should be disregarded for this purpose. Thus, the original issue
price should be determined as the price at which a substantial amount of the
Notes are sold by the Initial Purchasers to holders.
Failure of the Company to consummate the Exchange Offer or to file or cause
to be declared effective the Shelf Registration Statement as described under
"Description of Notes -- Registration Rights; Liquidated Damages" will cause
additional interest to accrue on the Notes in the manner described therein.
According to U.S. Treasury Regulations, the possibility of a change in the
interest rate will not affect the amount of interest income recognized by a U.S.
holder (or the timing of such recognition) if the likelihood of the change, as
of the date the Notes are issued, is remote. The Company believes that the
likelihood of a change in the interest rate on the Notes is remote and do not
intend to treat the possibility of a change in the interest rate as affecting
the yield to maturity of any Note. In the unlikely event that the interest rate
on the Notes is increased, the Company believes that any additional interest
will be taxable to the U.S. holder as ordinary income in accordance with the
U.S. holder's method of accounting for federal income tax purposes. The Internal
Revenue Service may take a different position, however, and require the U.S.
holder to report such income as original issue discount or contingent interest
in advance of its receipt of the cash payment of additional interest.
If a holder purchases a Note having OID at a purchase price which exceeds
the sum of original issue price of the Note plus OID included in a prior
holder's gross income ("acquisition premium"), the holder reduces the OID
otherwise includible in income by a percentage determined by comparing the
acquisition premium to the remaining OID to be accrued on the Note.
Alternatively, such a holder can elect to treat the purchase price as if it were
a purchase at original issue and compute remaining OID accruals by applying the
rules of the constant yield method. If a holder purchases a Note having OID at a
price in excess of the stated redemption price at maturity of the Note
("amortizable premium"), the holder does not include any OID in income and, as
discussed below, would be entitled to deduct a portion of the amortizable
premium over the remaining term of the Note.
The discussion below assumes the Notes will be issued without OID.
Market Discount
If a U.S. holder purchases a Note for an amount that is less than its
principal amount, the amount of the difference will be treated as "market
discount" for United States federal income tax purposes, unless such difference
is less than a specified de minimus amount. Under the market discount rules, a
U.S. holder will be required to treat any partial principal payment on, or any
gain on the sale, exchange, retirement or other disposition of, a Note as
ordinary income to the extent of the market discount which has not previously
been included in income and is treated as having accrued on such Note at the
time of such payment or disposition. In addition, the U.S. holder may be
required to defer, until the maturity of the Note or its earlier disposition in
a taxable transaction, the deduction of all or a portion of the interest expense
on any indebtedness incurred or continued to purchase or carry such Note.
Any market discount will be considered to accrue ratably during the period
from the date of acquisition to the maturity date of the Note, unless the U.S.
holder elects to accrue on a constant interest method. A U.S. holder may elect
to include market discount in income currently as it accrues (on either a
ratable or constant interest method), in which case the rule described above
regarding deferral of interest deductions will not apply. This election to
include market discount in income currently, once made, applies to all market
discount obligations acquired on or after the first taxable year to which the
election applies and may not be revoked without the consent of the Internal
Revenue Service (the "IRS").
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Amortizable Bond Premium
A U.S. holder that purchases a Note for an amount in excess of the
principal amount will be considered to have purchased the Note at a "premium." A
U.S. holder generally may elect to amortize the premium over the remaining term
of the Note on a constant yield method. However, if the Note is purchased at a
time when the Note may be optionally redeemed for an amount that is in excess of
its principal amount, special rules would apply that could result in a deferral
of the amortization of bond premium until later in the term of the Note. The
amount amortized in any year will be treated as a reduction of the U.S. holder's
interest income from the Note. Bond premium on a Note held by a U.S. holder that
does not make such an election will decrease the gain or increase the loss
otherwise recognized on disposition of the Note. The election to amortize
premium on a constant yield method, once made, applies to all debt obligations
held or subsequently acquired by the electing U.S. holder on or after the first
day of the first taxable year to which the election applies and may not be
revoked without the consent of the IRS.
Sale, Exchange or Retirement of the Notes
Upon the sale, exchange or redemption of a Note, a U.S. holder generally
will recognize capital gain or loss equal to the difference between (i) the
amount of cash proceeds and the fair market value of any property received on
the sale, exchange or redemption (except to the extent such amount is
attributable to either additional interest discussed above, or accrued interest
income not previously included in income, which is, in either case, taxable as
ordinary income) and (ii) such holder's adjusted tax basis in the Note. A
holder's adjusted tax basis in a Note generally will equal the cost of the Note
to the U.S. holder increased by the amount of market discount, if any,
previously taken in income by the U.S. holder or decreased by any bond premium
theretofore amortized by the U.S. holder with respect to the Note. Such capital
gain or loss will be long-term capital gain or loss if the Note was held by the
U.S. holder for more than 12 months. The net capital gain of an individual
derived in respect of the Notes generally will be taxed at a maximum rate of 20%
if it is long-term capital gain.
Exchange of Old Notes for New Notes
The exchange of Old Notes for New Notes pursuant to the Exchange Offer
should not be considered a taxable exchange for U.S. federal income tax purposes
because the New Notes should not constitute a material modification of the terms
of the Old Notes. Accordingly, such exchange should have no U.S. federal income
tax consequences to U.S. holders of Old Notes, and the basis and holding period
of such a holder in a New Note will be the same as such holder's adjusted tax
basis and holding period in the Old Note exchanged therefor.
Information Reporting and Backup Withholding
In general, information reporting requirements will apply to payments of
principal, premium, if any, and interest on a Note and payments of the proceeds
of the sale of a Note to certain noncorporate holders, and a 31% backup
withholding tax may apply to such payments if the U.S. holder (i) fails to
furnish or certify his correct taxpayer identification number to the payer in
the manner required, (ii) is notified by the Internal Revenue Service that he
has failed to report payments of interest and dividends properly, (iii) under
certain circumstances, fails to certify that he has not been notified by the
Internal Revenue Service that he is subject to backup withholding for failure to
report interest and dividend payments or (iv) the Internal Revenue Service
notifies the Company or its paying agent that the taxpayer identification number
furnished by the U.S. holder is incorrect. Any amounts withheld under the backup
withholding rules from a payment to a U.S. holder will be allowed as a credit
against such holder's United States federal income tax and may entitle the
holder to a refund, provided that the required information is furnished to the
Internal Revenue Service.
UNITED STATES FEDERAL TAXATION OF NON-U.S. HOLDERS
Any capital gain realized on the sale, redemption, retirement or other
taxable disposition of a Note by a Non-U.S. holder generally will not be subject
to U.S. federal income tax provided (i) such gain is not effectively connected
with the conduct by such holder of a trade or business in the United States, and
(ii) in the case of gains derived by an individual, such individual is not
present in the United States for 183 days or more in the taxable year of the
disposition.
130
<PAGE> 137
Payments of interest on the Notes to a Non-U.S. holder will generally not
be subject to United States withholding tax if such Non-U.S. holder (a) does not
actually or constructively own 10% or more of the total combined voting power of
all classes of stock of the Company); (b) is not a controlled foreign
corporation with respect to which the Company, directly or indirectly, is a
"related person" within the meaning of the Code; (c) is not a bank making a loan
in its ordinary course of business; and (d) either (A) the beneficial owner of
the Note certifies to the Company or its agent, under penalties of perjury, that
such owner is not a United States person and provides its name and address
(which certification can be made on IRS Form W-8 or Form, W-8BEN) or (B) a
securities clearing organization, bank or other financial institution that holds
customers' securities in the ordinary course of its trade or business (a
"Financial Institution") certifies to the Company or to its agent, under
penalties of perjury, that the certification described in clause (A) hereof has
been received from the beneficial owner or by another financial institution
acting for the beneficial owner. Recently issued final Treasury Regulations,
which apply to payments on a Note after December 31, 1999, also provide that the
certification requirements set forth above in clause (A) and (B) generally will
be fulfilled if beneficial owners (including partners of certain foreign
partnerships), as well as certain foreign partnerships, meet either of the two
conditions set forth in (d) of the preceding sentence. However, certain
beneficial owners, including foreign estates or trusts (or a fiduciary thereof)
and foreign partnerships that have entered into a withholding agreement with the
IRS will be required to provide their U.S. "taxpayer identification number" in
addition to their name and address on Form W-8. Foreign partnerships and their
partners should consult their tax advisors regarding possible additional
reporting requirements.
If a Non-U.S. holder of a Note is engaged in a trade or business in the
United States and interest on the Note is effectively connected with the conduct
of such trade or business, such Non-U.S. holder, although exempt from U.S.
federal withholding tax (provided the Non-U.S. holder files the appropriate
certification with the Company or its U.S. agent) will be subject to U.S.
federal income tax on such interest in the same manner as if it were a U.S.
holder. In addition, if such Non-U.S. holder is a foreign corporation, it may be
subject to a branch profits tax equal to 30% of its effectively connected
earnings and profits (subject to adjustment) for that taxable year unless it
qualifies for a lower rate under an applicable income tax treaty.
If interest on the Notes is exempt from United States federal income and
withholding tax under the rules described above, the Notes will not be included
in the estate of a deceased Non-U.S. holder for United States federal estate tax
purposes.
INFORMATION REPORTING AND BACKUP WITHHOLDING
The Company will, where required, report to the holders of Notes and the
Internal Revenue Service the amount of any interest paid on the Notes in each
calendar year and the amounts of tax withheld, if any, with respect to such
payments. Copies of these information returns may also be made available under
the provisions of a specific treaty agreement to the tax authorities of the
country in which the Non-U.S. holder resides.
In the case of payments of interest to Non-U.S. holders, Treasury
Regulations provide that the 31% backup withholding tax and certain information
reporting will not apply to such payments on a Note issued in registered form
with respect to which either the requisite certification, as described above in
"United States Federal Taxation of Non-U.S. Holders," has been received or an
exemption has otherwise been established; provided that neither the Company nor
its payment agent has actual knowledge that the holder is a United States person
or that the conditions of any other exemption are not in fact satisfied. If
payments of principal and interest are made to the beneficial owner of a Note by
or through the foreign office of a custodian, nominee or other agent of such
beneficial owner, or if the proceeds of the sale, exchange or other disposition
of a Note are paid to the beneficial owner of a Note through a foreign office of
a "broker" (as defined in the regulations), the proceeds will not be subject to
backup withholding (absent actual knowledge that the payee is a U.S. person).
Information reporting requirements, but not backup withholding, will also apply
to a payment of the proceeds of a disposition of the Notes by or through a
foreign office of a custodian, nominee, agent or broker that is (i) a U.S.
person, (ii) a controlled foreign corporation for United States federal income
tax purposes, or (iii) 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, unless such broker has documentary evidence in its file that the holder
of the Notes is not a United States person, and such broker has no actual
knowledge to the contrary, or the holder establishes an exception.
131
<PAGE> 138
In October 1997, Treasury Regulations were issued which alter the foregoing
rules in certain respects and which generally will apply to any payments in
respect of a Note or proceeds from the sale of a Note that are made after
December 31, 1999. Among other things, such regulations expand the number of
foreign intermediaries that are potentially subject to information reporting and
address certain documentary evidence requirements relating to exemption from the
general backup withholding requirements. Holders of the Notes should consult
their tax advisers concerning the possible application of such regulations to
any payments made on or with respect to the Notes.
Backup withholding is not an additional tax. Any amounts withheld under the
backup withholding rules may be refunded or credited against the Non-U.S.
holder's United States federal income tax liability, provided that the required
information is furnished to the Internal Revenue Service.
LEGAL MATTERS
The validity of the New Notes offered hereby will be passed upon for the
Company by Akerman, Senterfitt & Eidson, P.A., Miami, Florida. Certain attorneys
at Akerman, Senterfitt & Eidson, P.A. currently own shares of Class A common
stock.
EXPERTS
The financial statements of Florida Panthers Holdings, Inc. as of June 30,
1998 and 1997 and for each of the three years in the period ended June 30, 1998;
the audited financial statements of 2301 S.E. 17th St., Ltd. as of December 31,
1996 and the year then ended; the audited financial statements of Rahn Bahia
Mar, Ltd. as of December 31, 1996 and 1995, and for the years ended December 31,
1996 and 1995 and the period from inception (June 28, 1994) to December 31,
1994; and the audited financial statements of LeHill Partners L.P. and
consolidated entities as of December 31, 1996 and for the year then ended
included in this Prospectus and elsewhere in this Registration Statement have
been audited by Arthur Andersen LLP, independent certified public accountants.
As indicated in their reports with respect thereto, and are included herein in
reliance upon the authority of said firm as experts (or, as experts in
accounting and auditing) in giving said reports.
The audited financial statements of 2301 SE 17th St., Ltd. as of December
31, 1995, and for each of the years in the two year period ended December 31,
1995 have been included elsewhere in this Registration Statement in reliance
upon the report of KPMG LLP, independent certified public accountants, included
elsewhere in this Registration Statement and upon the authority of said firm as
experts in accounting and auditing.
The financial statements of the Boca Raton Hotel and Club Limited
Partnership as of December 31, 1996 and for the year then ended included in this
Prospectus have been so included in reliance on the report of
PricewaterhouseCoopers LLP, independent certified public accountants, given on
the authority of said firm as experts in auditing and accounting.
The financial statements of Boca Raton Hotel and Club Limited Partnership
at December 31, 1995, and for each of the two years in the period ended December
31, 1995, appearing in this Prospectus and Registration Statement have been
audited by Ernst & Young LLP, independent certified public accountants, as set
forth in their report thereon, appearing elsewhere herein, and are included in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
The financial statements of Biltmore Hotel Partners at December 31, 1997
and 1996 and each of the three years in the period ended December 31, 1997 and
the Historical Summaries of Revenues and Direct Operating Expenses of The Rental
Pool Operations of the Biltmore Villas for the years ended December 31, 1997 and
1996, have been audited by Ernst & Young LLP, independent auditors, as set forth
in their report thereon included elsewhere in this Registration Statement and
are included in reliance upon such report given upon the authority of such firm
as experts in accounting and auditing.
132
<PAGE> 139
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
THE REGISTRANT
FLORIDA PANTHERS HOLDINGS, INC.
Unaudited Condensed Consolidated Balance Sheets........... F-3
Unaudited Condensed Consolidated Statements of Operations
for the six months ended December 31, 1998 and 1997.... F-4
Unaudited Condensed Consolidated Statements of Cash Flows
for the six months ended December 31, 1998 and 1997.... F-5
Notes to Unaudited Condensed Consolidated Financial
Statements............................................. F-6
Report of Independent Certified Public Accountants........ F-8
Consolidated Balance Sheets as of June 30, 1998 and
1997................................................... F-9
Consolidated Statements of Operations for the years ended
June 30, 1998, 1997 and 1996........................... F-10
Consolidated Statements of Shareholders' Equity (Deficit)
for the years ended June 30, 1998, 1997 and 1996....... F-11
Consolidated Statements of Cash Flows for the years ended
June 30, 1998, 1997 and 1996........................... F-12
Notes to Consolidated Financial Statements................ F-13
BUSINESSES ACQUIRED
2301 SE 17TH ST., LTD. ("PIER 66")
Reports of Independent Certified Public Accountants....... F-32
Balance Sheets as of December 31, 1996 and 1995........... F-34
Statements of Operations for the years ended December 31,
1996, 1995 and 1994.................................... F-35
Statements of Partners' Equity for the years ended
December 31, 1996, 1995 and 1994....................... F-36
Statements of Cash Flows for the years ended December 31,
1996, 1995 and 1994.................................... F-37
Notes to Financial Statements............................. F-38
RAHN BAHIA MAR, LTD. ("BAHIA MAR")
Report of Independent Certified Public Accountants........ F-44
Balance Sheets as of December 31, 1996 and 1995........... F-45
Statements of Operations for the years ended December 31,
1996 and 1995 and for the Period from Inception (June
28, 1994) to December 31, 1994......................... F-46
Statements of Partners' Equity for the years ended
December 31, 1996 and 1995 and for the Period from
Inception (June 28, 1994) to December 31, 1994......... F-47
Statements of Cash Flows for the years ended December 31,
1996 and 1995 and for the Period from Inception (June
28, 1994) to December 31, 1994......................... F-48
Notes to Financial Statements............................. F-49
BOCA RATON HOTEL AND CLUB LIMITED PARTNERSHIP ("BOCA
RESORT")
Reports of Independent Certified Public Accountants....... F-53
Balance Sheets as of December 31, 1996 and 1995........... F-55
Statements of Operations for the years ended December 31,
1996, 1995 and 1994.................................... F-56
Statements of Changes in Partners' Deficit for the years
ended December 31, 1996, 1995 and 1994................. F-57
Statements of Cash Flows for the years ended December 31,
1996, 1995 and 1994.................................... F-58
Notes to Financial Statements............................. F-59
</TABLE>
F-1
<PAGE> 140
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
LEHILL PARTNERS L.P. AND CONSOLIDATED ENTITIES ("REGISTRY
RESORT")
Report of Independent Certified Public Accountants........ F-71
Consolidated Balance Sheet as of December 31, 1996........ F-72
Consolidated Statement of Operations for the Year Ended
December 31, 1996...................................... F-73
Consolidated Statement of Changes in Partners' Capital for
the Year Ended December 31, 1996....................... F-74
Consolidated Statement of Cash Flows for the Year Ended
December 31, 1996...................................... F-75
Notes to the Consolidated Financial Statements............ F-76
BILTMORE HOTEL PARTNERS ("BILTMORE RESORT")
Report of Independent Certified Public Accountants........ F-79
Balance Sheets as of December 31, 1997 and 1996........... F-80
Statements of Income for the Years Ended December 31,
1997, 1996, and 1995................................... F-81
Statements of Changes in Partners' Capital (Deficit) for
the Years Ended December 31, 1997, 1996 and 1995....... F-82
Statements of Cash Flows for the Years Ended December 31,
1997, 1996 and 1995.................................... F-83
Notes to Financial Statements............................. F-84
THE RENTAL POOL OPERATIONS OF THE BILTMORE VILLAS
Report of Independent Certified Public Accountants........ F-89
Historical Summaries of Revenues and Direct Operating
Expenses............................................... F-90
Notes to Historical Summaries of Revenues and Direct
Operating Expenses..................................... F-91
</TABLE>
F-2
<PAGE> 141
FLORIDA PANTHERS HOLDINGS, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
1998 1998
------------ ----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................. $ 12,884 $ 37,228
Restricted cash........................................... 24,790 29,296
Accounts receivable, net.................................. 31,821 28,574
Inventory................................................. 7,812 6,499
Current portion of Premier Club notes receivable.......... 3,986 4,089
Other current assets...................................... 14,760 5,496
---------- ----------
Total current assets.............................. 96,053 111,182
Property and equipment, net................................. 1,008,288 959,214
Intangible assets, net...................................... 81,027 36,926
Long-term portion of Premier Club notes receivable, net..... 7,714 7,828
Other assets................................................ 21,545 13,057
---------- ----------
Total assets...................................... $1,214,627 $1,128,207
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses..................... $ 45,387 $ 41,326
Current portion of deferred revenue....................... 58,955 35,114
Short-term debt........................................... 329,690 318,250
Current portion of long-term debt......................... 21,998 4,540
Other current liabilities................................. 6,406 3,866
---------- ----------
Total current liabilities......................... 462,436 403,096
Long-term debt.............................................. 255,338 217,836
Premier Club refundable membership fees..................... 63,864 65,046
Other non-current liabilities............................... 11,561 9,826
Minority interest........................................... 1,957 1,892
Shareholders' equity:
Class A Common Stock, $.01 par value, 100,000,000 shares
authorized and 34,890,358 and 34,888,358 shares issued
and outstanding at December 31, 1998 and June 30, 1998,
respectively........................................... 349 349
Class B Common Stock, $.01 par value, 10,000,000 shares
authorized and 255,000 shares issued and outstanding at
December 31, 1998 and June 30, 1998.................... 3 3
Contributed capital....................................... 432,130 432,110
Accumulated deficit....................................... (13,011) (1,951)
---------- ----------
Total shareholders' equity........................ 419,471 430,511
---------- ----------
Total liabilities and shareholders' equity........ $1,214,627 $1,128,207
========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
F-3
<PAGE> 142
FLORIDA PANTHERS HOLDINGS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED DECEMBER 31,
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
1998 1997
-------- --------
<S> <C> <C>
Revenue:
Leisure and recreation.................................... $128,872 $ 88,380
Entertainment and sports.................................. 28,455 21,149
-------- --------
Total revenue..................................... 157,327 109,529
Operating expenses:
Cost of leisure and recreation services................... 63,042 43,468
Cost of entertainment and sports services................. 22,161 21,577
Selling, general and administrative expenses.............. 46,226 40,364
Amortization and depreciation............................. 15,031 8,915
-------- --------
Total operating expenses.......................... 146,460 114,324
-------- --------
Operating income (loss)..................................... 10,867 (4,795)
Interest and other income................................... 1,470 1,318
Interest and other expense.................................. (23,217) (6,663)
Minority interest........................................... (180) (856)
-------- --------
Net loss.................................................... $(11,060) $(10,996)
======== ========
Net loss per share -- basic and diluted..................... $ (0.31) $ (0.33)
======== ========
Shares used in computing net loss per share -- basic and
diluted................................................... 35,145 33,552
======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
F-4
<PAGE> 143
FLORIDA PANTHERS HOLDINGS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED DECEMBER 31,
(IN THOUSANDS)
<TABLE>
<CAPTION>
1998 1997
--------- ---------
<S> <C> <C>
Operating activities:
Net loss.................................................. $ (11,060) $ (10,996)
Adjustments to reconcile net loss to net cash provided by
operating activities:
Amortization and depreciation.......................... 15,031 8,915
Income applicable to minority interests................ 180 856
Changes in operating assets and liabilities (excluding the
effects of business acquisitions):
Accounts receivable.................................... (3,247) (9,892)
Other assets........................................... (8,333) 20,243
Accounts payable and accrued expenses.................. 4,061 (5,346)
Deferred revenue and other liabilities................. 26,934 22,509
--------- ---------
Net cash provided by operating activities......... 23,566 26,289
--------- ---------
Investing activities:
Cash acquired in business acquisitions.................... -- 12,476
Cash used in business acquisitions........................ -- (83,534)
Acquisition of additional interest in consolidated
subsidiary............................................. -- (12,082)
Restricted cash........................................... 4,506 (9,901)
Capital expenditures...................................... (61,781) (30,518)
--------- ---------
Net cash used in investing activities............. (57,275) (123,559)
--------- ---------
Financing activities:
Net proceeds from the sale of common stock................ -- 108,760
Borrowings under credit facilities, net of financing costs
paid................................................... 131,838 22,800
Payments on long-term debt and other credit facilities.... (122,378) (35,000)
Proceeds from exercise of stock options................... 20 74
Distribution to minority interests........................ (115) (206)
--------- ---------
Net cash provided by financing activities......... 9,365 96,428
--------- ---------
Decrease in cash and cash equivalents............. (24,344) (842)
Cash and cash equivalents, at beginning of period........... 37,228 13,709
--------- ---------
Cash and cash equivalents, at end of period................. $ 12,884 $ 12,867
========= =========
SUPPLEMENTAL SCHEDULE OF NON-CASH OPERATING, INVESTING AND
FINANCING ACTIVITIES:
Issuance of note payable in connection with acquisition..... $ 45,287 $ --
========= =========
Reduction in other assets in connection with acquisition of
additional interest in units of consolidated subsidiary... $ -- $ 1,474
========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
F-5
<PAGE> 144
FLORIDA PANTHERS HOLDINGS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying unaudited Consolidated Financial Statements of Florida
Panthers Holdings, Inc. and subsidiaries (the "Company") have been prepared in
accordance with generally accepted accounting principles for interim financial
statements and with the instructions to Form 10-Q and Article 10 of Regulation
S-X. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements.
In the opinion of management, the financial information furnished in this
report reflects all adjustments (including normal recurring accruals) necessary
for a fair presentation of the results for the interim period. The results of
operations for the six-month period ended December 31, 1998 are not necessarily
indicative of the results to be expected for the entire year primarily due to
seasonal variations. All significant intercompany accounts have been eliminated.
2. ORGANIZATION
The Company is a holding company with subsidiaries currently operating in
two business segments: (1) leisure and recreation and (2) entertainment and
sports. The leisure and recreation business consists of the ownership of the
Boca Raton Resort and Club, the Arizona Biltmore Hotel, the Registry Hotel at
Pelican Bay, the Edgewater Beach Hotel, the Hyatt Regency Pier 66 Hotel and
Marina, the Radisson Bahia Mar Resort and Yachting Center and newly redesigned
Grande Oaks Golf Club (formerly known as Rolling Hills Golf Club).
The entertainment and sports business consists of the Florida Panthers
Hockey Club (the "Panthers"), arena development, arena management and ice
skating rink operations. The Company's arena development operations recently
completed construction of the National Car Rental Center, a new multi-purpose
state-of-the-art entertainment and sports complex. In addition to serving as
home to the Panthers during the 1998-99 season, the National Car Rental Center
showcases other spectator entertainment and sports events, and provides a
centrally located site for meetings and conferences.
3. EARNINGS (LOSS) PER COMMON SHARE
The Company adopted Statement of Financial Accounting Standards No. 128,
"Earnings Per Share" during fiscal 1998. This statement supersedes APB No. 15
and replaces primary and fully diluted earnings per share with a dual
presentation of basic and diluted earnings per share. Basic earnings per share
equals net income (loss) divided by the number of weighted average common shares
outstanding. Diluted earnings per share includes the effects of common stock
equivalents to the extent they are dilutive. Options were antidilutive during
the 1998 periods and during the six months ended December 31, 1997 and,
therefore, have been excluded. The following table sets forth weighted average
shares used to compute basic and diluted earnings per share (in 000's):
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
ENDED ENDED
DECEMBER 31, DECEMBER 31,
--------------- ---------------
1998 1997 1998 1997
------ ------ ------ ------
<S> <C> <C> <C> <C>
Basic weighted average shares outstanding..... 35,145 35,104 35,145 33,552
Stock options................................. -- 498 -- --
------ ------ ------ ------
Diluted weighted average shares outstanding... 35,145 35,602 35,145 33,552
====== ====== ====== ======
</TABLE>
F-6
<PAGE> 145
FLORIDA PANTHERS HOLDINGS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS -- (CONTINUED)
4. RECENT DEVELOPMENTS
In connection with the acquisition of the Arizona Biltmore Hotel in March
1998, the Company agreed to pay up to $50.0 million to the sellers conditioned
upon their satisfactory execution of certain developmental plans. The plans were
delivered to the Company in acceptable form in December 1998. The $50.0 million
note has no stated interest rate and, accordingly, is presented net of an
unamortized discount of $4.7 million on the Consolidated Balance Sheet. A
corresponding increase of $45.3 million is also reflected as a component of
intangible assets. The effective interest rate on the note is 8.8%. The $50.0
million is payable at the election of the seller, either in cash or in shares of
the Company's Class A Common Stock, par value $.01 per share, (the "Class A
Common Stock") in three equal annual installments commencing in April 1999.
F-7
<PAGE> 146
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To Florida Panthers Holdings, Inc.:
We have audited the accompanying consolidated balance sheets of Florida
Panthers Holdings, Inc. (a Florida corporation) and subsidiaries as of June 30,
1998 and 1997, and the related consolidated statements of operations,
shareholders' equity (deficit) and cash flows for each of the three years in the
period ended June 30, 1998. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Florida Panthers Holdings,
Inc. and subsidiaries as of June 30, 1998 and 1997, and the results of their
operations and their cash flows for each of the three years in the period ended
June 30, 1998 in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Fort Lauderdale, Florida,
August 3, 1998.
F-8
<PAGE> 147
FLORIDA PANTHERS HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30,
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
1998 1997
---------- --------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................. $ 37,228 $ 13,709
Restricted cash........................................... 29,296 30,110
Accounts receivable, net.................................. 28,574 13,087
Inventory................................................. 6,499 5,763
Current portion of Premier Club notes receivable.......... 4,089 3,778
Other current assets...................................... 5,496 4,143
---------- --------
Total current assets.............................. 111,182 70,590
Property and equipment, net................................. 959,214 475,391
Intangible assets, net...................................... 36,926 40,987
Long-term portion of Premier Club notes receivable, net..... 7,828 8,240
Other assets................................................ 13,057 5,184
---------- --------
Total assets...................................... $1,128,207 $600,392
========== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses..................... $ 41,326 $ 26,867
Current portion of deferred revenue....................... 35,114 17,738
Short-term debt........................................... 318,250 --
Current portion of long-term debt......................... 4,540 --
Other current liabilities................................. 3,866 1,770
---------- --------
Total current liabilities......................... 403,096 46,375
Long-term debt.............................................. 217,836 186,056
Premier Club refundable membership fees..................... 65,046 63,499
Other non-current liabilities............................... 9,826 1,448
Minority interest........................................... 1,892 1,861
Commitments and contingencies (Note 12)
Shareholders' equity:
Class A Common Stock, $.01 par value, 100,000,000 shares
authorized and 34,888,358 and 27,929,570 shares issued
and outstanding at June 30, 1998 and 1997,
respectively........................................... 349 279
Class B Common Stock, $.01 par value, 10,000,000 shares
authorized and 255,000 shares issued and outstanding at
June 30, 1998 and 1997................................. 3 3
Contributed capital....................................... 432,110 304,095
Accumulated deficit....................................... (1,951) (3,224)
---------- --------
Total shareholders' equity........................ 430,511 301,153
---------- --------
Total liabilities and shareholders' equity........ $1,128,207 $600,392
========== ========
</TABLE>
See accompanying notes to consolidated financial statements.
F-9
<PAGE> 148
FLORIDA PANTHERS HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED JUNE 30,
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
1998 1997 1996
-------- -------- --------
<S> <C> <C> <C>
Revenue:
Leisure and recreation.................................... $252,603 $ 17,567 $ --
Entertainment and sports.................................. 43,586 36,695 34,087
-------- -------- --------
Total revenue..................................... 296,189 54,262 34,087
Operating expenses:
Cost of leisure and recreation services................... 110,084 6,658 --
Cost of entertainment and sports services................. 45,919 35,135 35,958
Selling, general and administrative expenses.............. 91,579 15,150 8,371
Amortization and depreciation............................. 23,155 5,698 9,815
-------- -------- --------
Total operating expenses.......................... 270,737 62,641 54,144
-------- -------- --------
Operating income (loss)..................................... 25,452 (8,379) (20,057)
Interest and other income................................... 2,307 1,923 122
Interest and other expense.................................. (24,673) (3,364) (5,030)
Minority interest........................................... (1,813) (440) (174)
-------- -------- --------
Net income (loss)................................. $ 1,273 $(10,260) $(25,139)
======== ======== ========
Net income (loss) per share -- basic and
diluted......................................... $ 0.04 $ (0.74) $ (4.76)
======== ======== ========
Shares used in computing net income (loss) per
share -- basic............................................ 34,334 13,829 5,276
======== ======== ========
Shares used in computing net income (loss) per
share -- diluted.......................................... 34,888 13,829 5,276
======== ======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
F-10
<PAGE> 149
FLORIDA PANTHERS HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)
(IN THOUSANDS)
<TABLE>
<CAPTION>
CLASS A CLASS B
COMMON STOCK COMMON STOCK
---------------- --------------- TOTAL
NUMBER NUMBER CONTRIBUTED SHAREHOLDERS'
OF OF CAPITAL ACCUMULATED EQUITY
SHARES AMOUNT SHARES AMOUNT (DEFICIT) DEFICIT (DEFICIT)
------- ------ ------ ------ ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, June 30, 1995...... 871 $ 9 -- $-- $(22,357) $ -- $(22,348)
Net loss.................. -- -- -- -- (25,139) -- (25,139)
Dividends -- Decoma
Entities............... -- -- -- -- (816) -- (816)
------- ---- --- -- -------- ------- --------
Balance, June 30, 1996...... 871 9 -- -- (48,312) -- (48,303)
Recapitalization.......... 4,150 41 255 3 40,919 -- 40,963
Sales of common stock..... 9,760 98 -- -- 131,780 -- 131,878
Stock issued in
acquisitions........... 13,149 131 -- -- 181,884 -- 182,015
Warrants issued in
acquisition............ -- -- -- -- 5,000 -- 5,000
Net loss.................. -- -- -- -- (7,036) (3,224) (10,260)
Dividends -- Decoma
Entities............... -- -- -- -- (140) -- (140)
------- ---- --- -- -------- ------- --------
Balance, June 30, 1997...... 27,930 279 255 3 304,095 (3,224) 301,153
Sales of common stock..... 6,000 60 -- -- 108,456 -- 108,516
Stock issued in
acquisitions........... 918 9 -- -- 16,778 -- 16,787
Warrants issued in
acquisition............ -- -- -- -- 2,375 -- 2,375
Net income................ -- -- -- -- -- 1,273 1,273
Exercise of stock
options................ 40 1 -- -- 406 -- 407
------- ---- --- -- -------- ------- --------
Balance, June 30, 1998...... 34,888 $349 255 $3 $432,110 $(1,951) $430,511
======= ==== === == ======== ======= ========
</TABLE>
See accompanying notes to consolidated financial statements.
F-11
<PAGE> 150
FLORIDA PANTHERS HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30,
(IN THOUSANDS)
<TABLE>
<CAPTION>
1998 1997 1996
--------- --------- --------
<S> <C> <C> <C>
Operating activities:
Net income (loss)......................................... $ 1,273 $ (10,260) $(25,139)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Amortization and depreciation.......................... 23,155 5,698 9,815
Deferred compensation.................................. 373 100 1,334
Income applicable to minority interest................. 1,813 440 174
Changes in operating assets and liabilities (excluding the
effects of business acquisitions):
Accounts receivable.................................... (489) 1,876 (1,195)
Other assets........................................... (4,059) (512) (3,425)
Accounts payable and accrued expenses.................. (20,091) 2,205 938
Deferred revenue and other liabilities................. 35,713 3,323 138
--------- --------- --------
Net cash provided by (used in) operating
activities...................................... 37,688 2,870 (17,360)
--------- --------- --------
Investing activities:
Cash acquired in business acquisitions.................... 16,548 2,055 --
Cash used in business acquisitions........................ (230,219) (1,076) --
Acquisition of additional interest in consolidated
subsidiary............................................. (30,613) -- --
Capitalization of interest................................ (1,300) -- --
Capital expenditures...................................... (47,806) (1,494) (140)
--------- --------- --------
Net cash used in investing activities............. (293,390) (515) (140)
--------- --------- --------
Financing activities:
Net proceeds from the sale of common stock................ 108,516 131,878 --
Payments of related party indebtedness.................... -- (20,340) (3,500)
Borrowings under related party loan agreements............ -- -- 19,040
Increase in interest payable on related party
indebtedness........................................... -- 1,131 2,406
Borrowings under credit facilities........................ 251,200 35,000 --
Payments under long-term debt and credit facilities....... (80,509) (135,915) --
Proceeds from exercise of stock options................... 407 -- --
Payment of dividends -- Decoma Entities................... -- (140) (816)
Distribution to minority interests -- Decoma Entities..... (393) (725) (402)
--------- --------- --------
Net cash provided by financing activities......... 279,221 10,889 16,728
--------- --------- --------
Increase (decrease) in cash and cash
equivalents..................................... 23,519 13,244 (772)
Cash and cash equivalents, at beginning of period........... 13,709 465 1,237
--------- --------- --------
Cash and cash equivalents, at end of period................. $ 37,228 $ 13,709 $ 465
========= ========= ========
</TABLE>
See accompanying notes to consolidated financial statements.
F-12
<PAGE> 151
FLORIDA PANTHERS HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1998
1. ORGANIZATION
Florida Panthers Holdings, Inc. (the "Company") currently conducts
substantially all of its business through its subsidiaries, which include
Panthers BRHC Limited ("Boca Resort"), Panthers RPN Limited ("Edgewater
Resort"), 2301 SE 17th St., Ltd. ("Pier 66") and Rahn Bahia, Ltd. ("Bahia Mar"),
each a limited partnership formed for the purpose of owning and operating Boca
Raton Resort and Club, the Edgewater Beach Hotel, the Hyatt Regency Pier 66
Hotel and Marina and the Radisson Bahia Mar Resort and Yachting Center,
respectively, and Wright-Bilt Corp. ("Arizona Biltmore") and FPH/RHI Merger
Corp., Inc. ("Registry Resort") formed for the purpose of owning and operating
the Arizona Biltmore Hotel and the Registry Hotel at Pelican Bay, respectively,
and Rolling Hills Golf Course ("Rolling Hills"). The Company also owns the
Florida Panthers Hockey Club, Ltd. ("Panthers" or the "Club"), a professional
hockey team of the National Hockey League (the "NHL"), Arena Development
Company, Ltd. ("Arena Development"), a limited partnership formed for the
purpose of developing a new multi-purpose sports and entertainment center in
Broward County, Florida recently named National Car Rental Center (the "National
Center"), Arena Operating Company Ltd., a limited partnership formed for the
purpose of managing and operating the National Center, and Florida Panthers Ice
Ventures, Inc., a corporation formed for the purpose of developing ice rink
facilities. In addition, the Company owns approximately 78% of the partnership
interests in Decoma Miami Associates, Ltd. ("Decoma"), a Florida limited
partnership, which operates the Miami Arena.
In November 1996, the Company sold 7.3 million shares of Class A Common
Stock, par value $.01, (the "Class A Common Stock") in connection with its
initial public offering ("IPO"). An additional 2.5 million shares of Class A
Common Stock were sold in connection with a private placement in January 1997
and 6.0 million shares of Class A Common Stock were sold in connection with an
underwritten public offering in August 1997.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The accompanying Consolidated Financial Statements include the accounts of
the Company and all majority-owned subsidiaries after the elimination of all
significant intercompany accounts and transactions. Minority interest represents
minority shareholders' proportionate share of the equity in Decoma and Registry
Resort.
USE OF ESTIMATES
The preparation of the Consolidated Financial Statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the Consolidated Financial
Statements and accompanying Notes. Actual results may differ from those
estimates.
CASH AND CASH EQUIVALENTS/RESTRICTED CASH
Cash and cash equivalents consist primarily of cash in banks and highly
liquid investments with original maturities of 90 days or less. Restricted cash
consists principally of escrow accounts maintained in accordance with the terms
of various mortgage-notes payable agreements and cash collected by the Company
in its capacity as operator of the National Center. See Note 12. Concentration
of credit risk and market risk associated with cash, cash equivalents and
restricted cash are considered low due to the credit quality of the issuers of
the financial instruments held by the Company and due to their short term
nature.
F-13
<PAGE> 152
FLORIDA PANTHERS HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
ACCOUNTS RECEIVABLE
Accounts receivable are primarily from major credit card companies and
other large corporations. The Company performs ongoing credit evaluations of its
significant customers and generally does not require collateral or a significant
allowance for uncollectible balances.
INVENTORY
Inventory is stated at the lower of cost or market value and primarily
consists of food, beverages, marina fuel, retail merchandise and operating
supplies. Cost is determined using the first-in, first-out method.
PREMIER CLUB NOTES RECEIVABLE
Premier Club notes receivable are carried at amortized cost. Interest
income is suspended on all notes receivable when principal or interest payments
are more than three months contractually past due and is not resumed until such
loans become contractually current. The Company performs credit evaluations of
customers who finance their Premier Club membership and generally does not
require collateral or a significant allowance for uncollectible balances.
PROPERTY AND EQUIPMENT
Property and equipment is stated at cost less accumulated depreciation and
amortization. Expenditures for maintenance, repairs and renewals of relatively
minor items are charged to expense as incurred. Renewals of significant items
are capitalized along with interest during the construction period for
significant additions to the Company's resorts. Interest is capitalized using
rates associated with direct borrowings for such construction, if applicable, or
the equivalent to the average borrowing rate of the Company. Interest
capitalized for the year ended June 30, 1998 totaled $1.3 million. No interest
was capitalized during the years ended June 30, 1997 and 1996. Depreciation and
amortization has been computed using the straight-line method over the following
estimated useful lives:
<TABLE>
<CAPTION>
YEARS
-----
<S> <C>
Building and improvements................................... 40
Land improvements........................................... 15
Leasehold improvements...................................... 5-20
Furniture, fixtures and equipment........................... 3-7
</TABLE>
INTANGIBLE ASSETS
The components of unamortized intangible assets as of June 30 were as
follows (in 000's):
<TABLE>
<CAPTION>
1998 1997
------- -------
<S> <C> <C>
Franchise cost.............................................. $21,273 $21,881
Player contract acquisition costs........................... 995 3,916
Investment in Miami Arena Contract.......................... 8,146 8,516
Goodwill.................................................... 6,512 6,674
------- -------
$36,926 $40,987
======= =======
</TABLE>
The Club paid a $50.0 million franchise fee to the NHL when joining the
league, of which approximately $25.7 million was allocated to the contracts of
players selected in the 1993 expansion draft. The allocation was based upon an
independent appraisal of the fair value of the player contracts and is being
amortized on a straight-line basis over the estimated useful lives of the
contracts. The remaining portion of the franchise fee is being amortized on a
straight-line basis over 40 years.
F-14
<PAGE> 153
FLORIDA PANTHERS HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The Miami Arena is owned by the Miami Sports and Exhibition Authority
("MSEA"), an agency of the City of Miami. Under the terms of the Miami Arena
Contract ("MAC") between MSEA and Decoma, Decoma operates the Arena. The MAC is
scheduled to expire on July 8, 2020. Amounts invested in the MAC are being
amortized using the straight-line method over the remaining term of the MAC.
Goodwill represents the excess of the cost over the fair value of net
assets of the acquired business. Goodwill is stated at amortized cost and is
amortized on a straight-line basis over 40 years.
ACCOUNTING FOR IMPAIRMENT OF LONG-LIVED ASSETS
The Company continually evaluates whether events and circumstances have
occurred indicating the remaining estimated useful life of long-lived assets may
warrant revision, or long-lived asset balances may not be recoverable. If
factors indicate long-lived assets have been impaired, the Company uses an
estimate of the remaining value of the long-lived assets in measuring
recoverability.
Unrecoverable amounts are charged to operations in the applicable period.
FINANCIAL INSTRUMENTS
Statement of Financial Accounting Standards ("SFAS") No. 107, "Disclosures
about Fair Value of Financial Instruments" requires disclosure of the fair value
of financial instruments held by the Company. SFAS No. 107 defines the fair
value of a financial instrument as the amount at which the instrument could be
exchanged in a current transaction between willing parties. Fair value estimates
are made at a specific point in time, based on relevant market information about
the financial instrument. These estimates are subjective in nature and involve
uncertainties and matters of significant judgment, and therefore can not be
determined with precision. The assumptions used have a significant effect on the
estimated amounts reported. The following methods and assumptions are used to
estimate fair value:
- The carrying amounts of cash and cash equivalents, restricted cash,
accounts receivable, accounts payable and short-term debt approximate
fair value due to their short-term nature.
- The carrying amounts of Premier Club notes receivable and long-term debt
approximates fair value based on discounted future cash flows using
current rates at which similar loans with similar maturities would be
made to borrowers with similar credit risk.
- The fair value of Premier Club refundable membership fees can not be
reasonably estimated based on the uncertainty of the maturity.
REVENUE RECOGNITION
Revenue associated with room rentals, food and beverage sales and other
recreational amenity use at the Company's resort properties is recognized when
services are rendered. Boca Resort's club membership annual dues revenue is
recognized ratably over the membership year commencing October 1. Initiation
fees relating to memberships originating prior to December 31, 1997 are fully
refundable and, accordingly, are reflected as a liability captioned Premier Club
refundable membership fees on the accompanying Consolidated Balance Sheets. See
Note 10. Initiation fees associated with Premier Club memberships originating
after December 31, 1997 are non-refundable and are recorded as deferred revenue
and recognized as revenue over the estimated life of the membership.
Receipts from tickets, broadcasting, advertising and promotions associated
with the Panthers are recorded as revenue on a per game basis over the NHL
regular season.
F-15
<PAGE> 154
FLORIDA PANTHERS HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
PLAYER CONTRACT COSTS
Player salaries are recorded on a per game basis during the regular season.
Player signing bonuses are amortized over the life of the player contract. The
Company accounts for trades of player contracts as like-kind exchanges, whereby
the recorded basis of the contract of the acquired player(s) is equal to the net
book value of the contract of the traded player(s), plus or minus any cash
consideration.
Employment contracts with certain players require future compensation under
certain circumstances. These contracts are generally performance in nature and,
accordingly, related payments are charged to operations over the contract
playing seasons.
The Company has obtained disability insurance policies for several of its
players under multi-year contracts. Benefits would become payable after thirty
consecutive games were missed by the insured player. The policies provide for
payment of a portion of the player's salary for the remaining term of the
contract or until the player can resume playing.
ADVERTISING EXPENSE
The Company expenses advertising costs the first time the advertising takes
place. Advertising expense was $5.3 million and $672,000 for the years ended
June 30, 1998 and 1997, respectively. Prepaid advertising for each the periods
presented and advertising expense for 1996 was not considered material by
management.
INCOME TAXES
The Company accounts for income taxes under the liability method in
accordance with SFAS No. 109, "Accounting for Income Taxes". See Note 18.
STOCK-BASED COMPENSATION
The Company grants stock options for a fixed number of shares to employees
with an exercise price equal to the fair value of the shares at the date of
grant. The Company has elected to account for stock option grants in accordance
with APB No. 25 "Accounting for Stock Issued to Employees" and, accordingly,
recognizes no compensation expense in connection with stock option grants made
to employees. See Note 11.
EARNINGS (LOSS) PER COMMON SHARE
The Company adopted SFAS No. 128, "Earnings Per Share" during fiscal 1998.
This statement supersedes APB No. 15 and replaces primary and fully diluted
earnings per share with a dual presentation of basic and diluted earnings per
share. Basic earnings per share equals net income (loss) divided by the number
of weighted average common shares outstanding. Diluted earnings per share
includes the effects of common stock equivalents to the extent they are
dilutive. Such options were antidilutive in 1997 and 1996 and, thus, have been
excluded. Additionally, approximately 1.4 million weighted average shares
issuable pursuant to convertible debt obligations have been excluded from 1998
since such shares were antidilutive. The following table sets forth weighted
average shares used to compute basic and diluted earnings per share (in 000's):
<TABLE>
<CAPTION>
1998 1997 1996
------ ------ -----
<S> <C> <C> <C>
Basic weighted average shares outstanding................... 34,334 13,829 5,276
Stock options............................................... 554 -- --
------ ------ -----
Diluted weighted average shares outstanding................. 34,888 13,829 5,276
====== ====== =====
</TABLE>
F-16
<PAGE> 155
FLORIDA PANTHERS HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
RECENTLY ISSUED ACCOUNTING STANDARDS
In 1997, the Financial Accounting Standard Board (the "FASB") issued SFAS
No. 130, "Reporting Comprehensive Income". This Statement requires all items
required to be recognized under accounting standards as components of
comprehensive income be reported in a financial statement displayed with the
same prominence as other financial statements. The Company adopted SFAS No. 130
on July 1, 1998.
In 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information". This Statement establishes standards for
the way public business enterprises report information about operating segments
in annual financial statements and requires those enterprises report selected
information about operating segments in interim financial reports. SFAS No. 131
also establishes standards for related disclosures about products and services,
geographic areas of operations and major customers. The Company adopted SFAS No.
131 on July 1, 1998. In the opinion of management, adoption of this standard
will not have a material impact on the Company's existing segment reporting
disclosures.
In April 1998, the American Institute of Certified Public Accountants
issued Statement of Position No. 98-5 ("SOP 98-5"). SOP 98-5 requires all
non-governmental entities to expense costs of start-up activities, including
pre-operating, pre-opening and organization activities, as those costs are
incurred. Adoption of this statement is not expected to have a material effect
on the Company's results of operations.
In 1998, the FASB issued SFAS No. 132, "Employers Disclosures about
Pensions and Other Post Retirement Benefits". This Statement revises employers'
disclosures about pension and other post retirement benefit plans. In the
opinion of management, adoption of this standard will not have a material impact
on the Company's existing reporting.
In 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities". This Statement establishes accounting and
reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts, (collectively referred to as
derivatives) and for hedging activities. It requires that an entity recognize
all derivatives as either assets or liabilities in the statement of financial
position and measure those instruments at fair value. In the opinion of
management, adoption of this standard will not have a material impact on the
Company's existing reporting.
RECLASSIFICATIONS
Certain amounts in the prior years' financial statements have been
reclassified to conform to the current year's presentation.
3. SUPPLEMENTAL CASH FLOW INFORMATION
Interest paid during the years ended June 30, 1998, 1997 and 1996 was
approximately $22.3 million, $1.2 million and $3.8 million, respectively. In
addition, the Company issued 918,174 and 13,148,893 shares of Class A Common
Stock in connection with business acquisitions during the years ended June 30,
1998 and 1997, respectively. During the year ended June 30, 1997, in conjunction
with the IPO, a note payable of approximately $41.0 million to the Company's
Chairman, Mr. Huizenga, was exchanged for 4,149,710 shares of Class A Common
Stock and 255,000 shares of Class B Common Stock.
4. BUSINESS COMBINATIONS
Prior to the completion of the IPO, the Company acquired from Mr. Huizenga
approximately 78% of the partnership interest in Decoma in exchange for 870,968
shares of Class A Common Stock. Decoma derives revenue from the operations of
the Miami Arena. As this transaction was among entities under common control, it
was accounted for on a historical cost basis in a manner similar to a pooling of
interests as of the date of the acquisition by Mr. Huizenga.
F-17
<PAGE> 156
FLORIDA PANTHERS HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The acquisitions of the businesses discussed below have been accounted for
under the purchase method of accounting and are included in the historical
financial statements from the date of acquisition.
ACQUISITIONS MADE DURING THE YEAR ENDED JUNE 30, 1998
In April 1998, the Company acquired Edgewater Resort for $41.2 million.
Approximately $20.7 million of the purchase price was paid in cash at closing
and the remainder bears interest at a rate of 5.0% per annum and is payable, at
the election of the seller, in either cash on October 22, 1999 or shares of
Class A Common Stock at a per share price of $24.50 at any time up through
October 22, 1999.
In March 1998, the Company acquired an ownership interest in Arizona
Biltmore in exchange for: (i) payment of $126.0 million in cash, (ii) payment in
the future of $500,000 in cash, (iii) payment in the future of $99.8 million
either in cash or shares of Class A Common Stock, (iv) warrants to purchase
500,000 shares of Class A Common Stock exercisable at $24.00 per share at any
time, in whole or in part, through March 2003 and (v) the assumption of $63.1
million of debt. The $500,000 bears interest at a rate of 2.5% per annum and is
payable in April 2001. The $99.8 million bears interest at a rate of 5.0% per
annum and, at the election of the seller, shall be paid in either cash or shares
of Class A Common Stock. If the seller elects to receive cash, it must make such
election during specified election periods occurring through March 2, 2000. If
an election for cash is made, the Company will be required to make payment
within 120 days after such election. Alternatively, the seller may elect to
receive shares of Class A Common Stock at a per share price of $26.00 at any
time through March 2, 2008. Subject to implementing certain developmental
strategies or meeting certain profit levels over a 36 month period ending on
March 31, 2001, up to an additional $50 million may be payable at the election
of the seller, either in cash or shares of Class A Common Stock at a per share
price of not less than $19.00.
In November 1997, the Company acquired certain assets associated with
Rolling Hills in exchange for $8.0 million in cash. The assets acquired consist
of an 18-hole golf course and a separate 9-hole golf course (both of which are
currently being redesigned), a parking lot and 79 acres of undeveloped land
adjacent to the golf courses.
In August 1997, the Company acquired its initial 68% ownership interest
(325 of the 474 units) in Registry Resort for (i) 918,174 shares of Class A
Common Stock, (ii) warrants to purchase 325,000 shares of Class A Common Stock
(300,000 of which are exercisable at $25.85 per share and 25,000 of which are
exercisable at $23.50 per share) and (iii) $75.5 million in cash. The warrants
vest ratably on a quarterly basis and become fully exercisable on December 31,
1999. The warrants expire in October 2003. As of June 30, 1998 the Company had
acquired all but one of the remaining units of Registry Resort for additional
payments of $30.6 million (net of the payoff of certain mortgage notes
receivable to the Company associated with additional units). The Company
acquired the last unit in July 1998.
ACQUISITIONS MADE DURING THE YEAR ENDED JUNE 30, 1997
In June 1997, the Company acquired substantially all of the net assets of
Boca Resort in exchange for (i) 272,303 shares of Class A Common Stock, (ii)
rights to acquire 4,242,586 shares of Class A Common Stock for no additional
consideration and (iii) warrants to purchase 869,810 shares of Class A Common
Stock at a purchase price of $29.01 per share. The warrants are currently
exercisable with 50% expiring in December 1998 and the remainder expiring in
December 1999.
In May 1997, the Company acquired the rights to operate Gold Coast Ice
Arena ("Gold Coast") in exchange for 34,760 shares of Class A Common Stock. Gold
Coast is the current practice facility of the Panthers and provides open
skating, ice hockey leagues and other programs to the public.
F-18
<PAGE> 157
FLORIDA PANTHERS HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
In March 1997, the Company acquired all of the ownership interests,
comprised of capital stock and partnership interests, of each of the entities
which own, directly or indirectly, all of the general and limited partnership
interests in Pier 66 for 4,450,000 shares of Class A Common Stock.
In March 1997, the Company acquired all of the ownership interests,
comprised of capital stock and partnership interests, of each of the entities
which own, directly or indirectly, all of the general and limited partnership
interests in the Bahia Mar in exchange for 3,950,000 shares of Class A Common
Stock.
In January 1997, the Company acquired certain assets relating to Incredible
Ice in exchange for (i) $1.0 million in cash, (ii) 212,766 shares of Class A
Common Stock and (iii) the assumption by the Company of a maximum of $8.1
million in construction-related obligations. Incredible Ice provides open
skating, ice hockey leagues and other ice programs to the public.
The Company's unaudited pro forma consolidated results of operations
assuming the above acquisitions had been consummated as of the beginning of the
period are as follows for the years indicated (in 000's, except per share
amounts):
<TABLE>
<CAPTION>
1998 1997
-------- --------
<S> <C> <C>
Revenue..................................................... $346,947 $308,174
Net operating income........................................ 37,067 39,304
Net loss.................................................... (2,732) (914)
Pro forma net loss per common share -- basic and diluted.... (0.08) (0.03)
</TABLE>
The preliminary purchase price allocation for business combinations
accounted for under the purchase method of accounting, including the subsequent
acquisition of additional units of Registry Resort, during the years ended June
30, 1998 and 1997 are as follows (in 000's):
<TABLE>
<CAPTION>
1998 1997
--------- ---------
<S> <C> <C>
Cash acquired in business acquisitions...................... $ 16,548 $ 2,055
Current assets, excluding cash.............................. 19,850 55,195
Property and equipment...................................... 455,851 474,577
Other assets................................................ 39 9,152
Intangible assets........................................... -- 6,743
Current liabilities......................................... (28,355) (34,161)
Debt........................................................ (183,879) (261,971)
Minority interest........................................... (60) --
Other non-current liabilities............................... -- (63,499)
Common stock issued or reserved for issuance................ (19,162) (187,015)
--------- ---------
Cash used in business acquisitions.......................... $ 260,832 $ 1,076
========= =========
</TABLE>
F-19
<PAGE> 158
FLORIDA PANTHERS HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
5. PREMIER CLUB NOTES RECEIVABLE
The Company offers internal financing to qualified purchasers of Premier
Club memberships at Boca Resort. Based on the terms of the agreements, the gross
membership notes will be collected as follows (in 000's):
<TABLE>
<S> <C>
1999........................................................ $ 4,089
2000........................................................ 3,129
2001........................................................ 1,981
2002........................................................ 1,748
2003........................................................ 1,009
Thereafter.................................................. 206
-------
$12,162
=======
</TABLE>
6. PROPERTY AND EQUIPMENT, NET
A summary of property and equipment at June 30 is as follows (in 000's):
<TABLE>
<CAPTION>
1998 1997
-------- --------
<S> <C> <C>
Land and land improvements.................................. $244,243 $134,815
Buildings and improvements.................................. 675,175 297,061
Furniture, fixtures and equipment........................... 52,147 30,556
Construction in progress.................................... 8,196 15,517
-------- --------
979,761 477,949
Less: accumulated depreciation and amortization............. (20,547) (2,558)
-------- --------
$959,214 $475,391
======== ========
</TABLE>
Depreciation and amortization expense on property and equipment included in
the Consolidated Statements of Operations was approximately $19.0 million, $1.9
million and $280,000 for the years ended June 30, 1998, 1997 and 1996,
respectively.
7. ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts payable and accrued expenses as of June 30 consists of the
following (in 000's):
<TABLE>
<CAPTION>
1998 1997
------- -------
<S> <C> <C>
Other accrued liabilities................................... $19,298 $13,000
Accounts payable............................................ 8,406 6,401
Accrued taxes............................................... 6,367 2,379
Accrued payroll and related costs........................... 5,872 4,454
Accrued interest payable.................................... 1,383 633
------- -------
$41,326 $26,867
======= =======
</TABLE>
8. SHORT-TERM DEBT
In connection with the Company's acquisition of Edgewater Resort, a portion
of the purchase price ($20.5 million) was financed by the seller. The
indebtedness bears interest at a rate of 5.0% per annum and is payable, at the
election of the seller, in either cash on October 22, 1999 or shares of Class A
Common Stock at a per share price of $24.50 at any time through October 22,
1999.
F-20
<PAGE> 159
FLORIDA PANTHERS HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
In connection with the Company's acquisition of an ownership interest in
Arizona Biltmore, a portion of the purchase price ($100.3 million) was financed
by the seller. The note payable for $500,000 is payable in April 2001 and,
therefore, is classified as long-term debt on the Consolidated Balance Sheet.
See Note 9. The note payable for $99.8 million bears interest at a rate of 5.0%
per annum and, at the election of the seller, shall be paid in either cash or
shares of Class A Common Stock. If the seller elects to receive cash, it must
make such election during specified election periods occurring through March 2,
2000. If an election for cash is made, the Company will be required to make
payment within 120 days after such election. Alternatively, the seller may elect
to receive shares of Class A Common Stock at a per share price of $26.00 at any
time through March 2, 2008.
The Company has an interim loan from a bank in the principal amount of
$220.0 million (the "Interim Loan"), of which $198.0 million was outstanding at
June 30, 1998. The proceeds from the Interim Loan were used to acquire the
Company's interests in Arizona Biltmore, to acquire remaining units of Registry
Resort, to repay certain outstanding indebtedness and for working capital
purposes. The Interim Loan carries a variable interest rate, which was 8.4% at
June 30, 1998. The Interim Loan matures on September 15, 1998. The Company is in
the process of refinancing a portion of its short-term debt.
The weighted average interest rate on the Company's aggregate short-term
debt at June 30, 1998 was 7.1%.
9. LONG-TERM DEBT
Long-term debt at June 30 is as follows (in 000's):
<TABLE>
<CAPTION>
1998 1997
-------- --------
<S> <C> <C>
Mortgage note payable, collateralized by substantially all
Pier 66 property and equipment, variable interest rate
(8.8% at June 30, 1998), due June 28, 2000................ $ 25,951 $ 25,951
Mortgage note payable, collateralized by substantially all
Arizona Biltmore property and equipment, fixed interest
rate of 8.25%, due July 1, 2016........................... 62,725 --
Note payable to bank, collateralized by substantially all
Bahia Mar property and equipment, repaid in March 1998.... -- 15,105
Senior note payable to bank, secured by a first mortgage and
lien on all Boca Resort assets, variable interest rate
(9.0% at June 30, 1998), due on August 22, 2001........... 110,000 110,000
Revolving credit facility with bank, collateralized by all
assets of the Panthers, variable interest rate (7.2% at
June 30, 1998), due on April 30, 2000..................... 23,200 35,000
Note payable to seller, fixed interest rate of 2.5% due
April 2001................................................ 500 --
-------- --------
Total debt outstanding including current
portion......................................... $222,376 $186,056
======== ========
</TABLE>
F-21
<PAGE> 160
FLORIDA PANTHERS HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
At June 30, 1998, $11.8 million was available under the revolving credit
facility outlined above. The Company's loan agreements require the maintenance
of customary capital expenditure reserves for the replacement of assets and
restricts the Company's ability to pay dividends in certain circumstances. In
addition, the Company is required to comply with certain covenants under several
of its debt agreements discussed above, including without limitation,
requirements to (i) maintain net worth of $15.0 million and (ii) maintain
certain leverage ratios. The Company was in compliance with these covenants at
June 30, 1998. Minimum principal payments required on the Company's long-term
debt for each of the five fiscal years subsequent to fiscal 1998 and thereafter
are as follows (in 000's):
<TABLE>
<S> <C>
1999........................................................ $ 4,540
2000........................................................ 55,811
2001........................................................ 9,302
2002........................................................ 96,957
2003........................................................ 2,124
Thereafter.................................................. 53,642
--------
$222,376
========
</TABLE>
10. PREMIER CLUB REFUNDABLE MEMBERSHIP FEES
Fully paid initiation fees associated with Premier Club memberships at Boca
Resort executed prior to December 31, 1997 are refundable upon the death of a
member or a member's spouse and upon the expiration of the 30-year membership
term (subject to renewal at the member's option). The fee is also refundable
upon a member's resignation from the Premier Club, but only out of the proceeds
of the membership fee of the fifth new member to join the Premier Club following
refund of all previously resigned members' fees. If any member paying over time
suspends payment, amounts paid to date are forfeited and recognized as income.
Amounts forfeited to date have not been material. Such Premier Club refundable
membership fees of approximately $65.0 million and $63.5 million at June 30,
1998 and 1997, respectively, have been reflected as a non-current liability on
the Company's Consolidated Balance Sheets.
F-22
<PAGE> 161
FLORIDA PANTHERS HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
11. STOCK OPTIONS
The Company has a stock option plan under which options to purchase shares
of common stock may be granted to key employees and directors of the Company.
Options granted under the plan are non-qualified and are granted at a price
equal to the fair market value of the common stock at the date of grant.
Generally, options granted will have a term of ten years from the date of grant,
and will vest in increments of 25% per year over a four-year period on the
annual anniversary of the date of grant. A summary of stock option transactions
for the three years ended June 30, 1998 is as follows:
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF
SHARES RANGE IN OPTIONS
RESERVED OPTIONS OPTION PRICES EXERCISABLE
---------- --------- --------------- -----------
<S> <C> <C> <C> <C>
Balance at June 30, 1996.............. -- -- -- --
Shares reserved under plan............ 2,600,000 -- --
Granted............................... (2,049,747) 2,049,747 $10.00 - $27.30
Forfeited............................. 21,605 (21,605) $10.00
---------- ---------
Balance at June 30, 1997.............. 571,858 2,028,142 $10.00 - $27.30 --
Additional shares reserved under
plan................................ 2,400,000 -- --
Granted............................... (1,402,414) 1,402,414 $17.25 - $23.25
Exercised............................. -- (40,614) $10.00
Forfeited............................. 93,748 (93,748) $10.00 - $26.38
---------- ---------
Balance at June 30, 1998.............. 1,663,192 3,296,194 $10.00 - $27.30 466,422
========== =========
</TABLE>
The weighted average exercise price and weighted average remaining
contractual life of the Company's outstanding options at June 30, 1998 is set
forth below.
<TABLE>
<CAPTION>
WEIGHTED (VESTED ONLY)
AVERAGE WEIGHTED WEIGHTED
REMAINING AVERAGE AVERAGE
CONTRACTUAL EXERCISE OPTIONS EXERCISE
RANGE OF EXERCISE PRICES OPTIONS LIFE PRICE EXERCISABLE PRICE
- ------------------------ --------- ----------- -------- ----------- -------------
<S> <C> <C> <C> <C> <C>
$10.00................................... 900,702 8.4 years $10.00 200,533 $10.00
$16.63 - $19.13.......................... 1,364,132 9.4 years 17.26 4,500 17.01
$21.13 - $27.30.......................... 1,031,360 8.9 years 25.47 261,389 25.48
--------- -------
3,296,194 466,422
========= =======
</TABLE>
The weighted average exercise price of all options at June 30, 1998 and
1997 was $17.93. Pro forma information relating to net income and earnings per
share is required by SFAS No. 123, and has been determined as if the Company had
accounted for its employee stock options under the fair value method of that
Statement. The fair value for these options was estimated at the date of grant
using a Black-Scholes option pricing model with the following assumptions for
the year ended June 30:
<TABLE>
<CAPTION>
1998 1997
----------- ------------
<S> <C> <C>
Pro forma net loss...................................... $(4,924,000) $(11,271,000)
Pro forma net loss per share............................ $ (.14) $ (.82)
Pro forma weighted average fair value of options
granted............................................... $ 8.91 $ 8.74
Risk free interest rate................................. 6.35% 6.35%
Expected lives.......................................... 5-7 years 5-7 years
Expected volatility..................................... 42% 42%
</TABLE>
F-23
<PAGE> 162
FLORIDA PANTHERS HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
12. COMMITMENTS AND CONTINGENCIES
LEASES
The Company leases the Bahia Mar resort site from the City of Fort
Lauderdale under an operating lease, which has a term through August 31, 2062.
Under the lease agreement, the Company is required to pay annual rent equal to
the greater of a percentage (4.0% through September 30, 2012 and 4.25%
thereafter) of annual gross operating revenue, as defined, or a $300,000 minimum
annual rent (escalating on a formula percentage after September 2037). Rent
expense under this lease totaled $775,000 for the year ended June 30, 1998 and
$247,000 for the period from the date of the Bahia Mar acquisition (March 4,
1997) to June 30, 1997. The lease agreement also requires the Company to
annually set aside 3% of Bahia Mar's revenue, as defined in the lease agreement,
for the purchase, replacement and upgrade of furniture, fixtures and equipment.
All such restricted funds have been spent on their required purpose through June
30, 1998.
Future minimum lease obligations under various noncancellable operating
leases with initial terms in excess of one year at June 30, 1998 are as follows
(in 000's):
<TABLE>
<S> <C>
1999........................................................ $ 3,114
2000........................................................ 1,781
2001........................................................ 1,088
2002........................................................ 887
2003........................................................ 668
Thereafter.................................................. 17,700
-------
$25,238
=======
</TABLE>
As of June 30, 1998, the Company has two letters of credit which secure two
operating leases. The letters of credit are collateralized by certificates of
deposit totaling $500,000, which mature in August 1998 and are included in
restricted cash.
EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements with various player and
non-player employees which expire at various dates through June of 2002. The
terms of these employment agreements require future payments, excluding bonuses,
at June 30, 1998 as follows (in 000's):
<TABLE>
<S> <C>
1999........................................................ $27,119
2000........................................................ 18,647
2001........................................................ 8,604
2002........................................................ 150
-------
$54,520
=======
</TABLE>
NATIONAL CAR RENTAL CENTER ("NATIONAL CENTER")
In June 1996, the Company entered into an agreement with Broward County to
develop the National Center, which will be owned by Broward County. The Company
will bear all costs relating to the development of the National Center in excess
of $184.7 million, including additional construction costs in excess of the
$184.7 million resulting from certain litigation. See Litigation. In June 1996,
the Company also entered into a 30-year license agreement (the "Broward License
Agreement") for the use of the National Center. In connection therewith, Broward
County will receive revenue from the operations of the National Center. The
Company has provided Broward County a guaranty pursuant to which the Company
will be obligated to pay Broward County its contracted share of the county's
annual debt service obligation (the "County Preferred Revenue Allocation"). The
Company believes that the revenue generated from the operations of the National
F-24
<PAGE> 163
FLORIDA PANTHERS HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Center will be sufficient to cover the County Preferred Revenue Allocation. The
Broward License Agreement commences upon the completion of construction of the
National Center, which is currently scheduled for October 1, 1998. The Broward
License Agreement is for a term of 30 years, which may be extended for
additional five-year periods, subject to certain conditions.
Pursuant to the Broward License Agreement, the Company is entitled to
receive all (a) revenue from the sale of (i) general seating ticket sales for
its home games to be played at the National Center, (ii) non-consumable
concession items at the National Center during its home games, (iii) items in
the Club's retail store to be located within the National Center, (iv) (in
conjunction with and subject to the rights of the NHL) the rights to all
television and radio and other media broadcasting rights for hockey related
events at the National Center, (v) advertising within or on certain designated
locations at the National Center during hockey related events and (vi) Panthers'
related sponsorships or NHL league-wide sponsorships; and (b) the first $14.0
million of "net operating income" generated by the National Center and 80% of
all net operating income generated by the National Center in excess of $14.0
million with Broward County receiving 20%. "Net operating income" is defined to
include revenue from building naming rights fees, food and beverage concessions,
parking, non-hockey related advertising and all other revenue generated from
non-hockey related events offset by certain arena operating and financing costs
including the County Preferred Revenue Allocation.
The Company will be obligated to pay rent in the amount of approximately
$7,500 per home game played by the Panthers at the National Center and to pay
certain utility and event staffing expenses, but the combined amounts payable by
the Panthers under the Broward License Agreement will not exceed 5% of the gross
receipts from the sale of general seating tickets to Panthers' home games.
LITIGATION
On April 9, 1997, Allied Minority Contractors Association, Inc., South
Florida Chapter of NAMC, Overnight Success Construction, Inc., Reed Jr.
Plumbing, Inc. and Christopher Mallard (collectively, the "Broward County
Plaintiffs") filed a suit against Broward County and Arena Development in the
Seventeenth Judicial Circuit in and for Broward County, Florida. This suit
alleges that Broward County entered into the agreement with the Company to
develop the National Center in violation of Florida law and Broward County
ordinances. The Broward County Plaintiffs seek, among other things, to nullify
the agreement between Broward County and the Company to develop the National
Center. The Company believes that this suit is without merit and intends to
vigorously defend against this suit. On July 10, 1997, the trial court denied
the Broward County Plaintiffs' motion for a temporary restraining order and on
November 17, 1997 the trial court also denied plaintiff's motion for summary
judgement. Plaintiffs have appealed both of those orders. On May 19, 1998, the
trial court granted the Joint Motion of Broward County and Arena Development to
Disqualify Plaintiffs and Their Counsel and to Dismiss. Plaintiffs motion for
rehearing was denied, and plaintiffs have filed a notice of appeal. An
unfavorable outcome of the suit may have a material adverse effect on the
Company's financial condition or results of operations.
On January 28, 1997, February 4, 1997 and March 18, 1997, purported class
action lawsuits were filed against the Company and Messrs. Huizenga, Johnson,
Rochon, Berrard, Hudson, Dauria and Evans in the United States District Court
for the Southern District of Florida. On May 7, 1998, a consolidated and amended
class action complaint was filed combining these claims into one action. The
suits allege, among other things, that the defendants violated Section 10(b) of
the Exchange Act and Rule 10b-5 thereunder, by making untrue statements or
omitting material facts, in connection with sales of the Company's Class A
Common Stock by the plaintiff and others in the purported class between November
13, 1996 and December 22, 1996. The suit generally seeks, among other things,
certification as a class and an award of damages in an amount to be determined
at trial. The Company believes that this suit is without merit and
F-25
<PAGE> 164
FLORIDA PANTHERS HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
intends to defend vigorously against this suit. An unfavorable outcome of the
suit may have a material adverse effect on the Company's financial condition or
results of operations.
On October 9, 1997, Bernard Kalishman filed a purported shareholder
derivative and class action lawsuit on behalf of the Company, as nominal
defendant, against Messrs. Huizenga, Berrard, Johnson, Rochon, Hudson and Egan,
each as director of the Company and Richard Evans and William Torrey, both
former directors of the Company, in the Seventeenth Judicial Circuit in and for
Broward County, Florida. The suit alleges, among other things, that each of the
defendants (other than Mr. Egan) breached contractual and fiduciary obligations
owed to the Company and its stockholders by engaging in self-dealing
transactions in connection with the Company's purchase of Pier 66 and Bahia Mar.
The suit seeks to impose a constructive trust on alleged excessive compensation
paid to the prior owners of Pier 66 and Bahia Mar or to have damages assessed
against the defendants or to rescind the transaction. The amended complaint also
added claims similar to those alleged in the class action lawsuit described in
the paragraph above and dropped Mr. Egan as a defendant. The Company believes
that this suit is without merit and intends to defend vigorously against this
suit. An unfavorable outcome of the suit may have a material adverse effect on
the Company's financial condition or results of operations.
A lawsuit was filed on January 9, 1997 by Arena Development seeking a
determination as to the applicability of the Prevailing Wage Ordinance to the
construction of National Center. The suit was filed in the Seventeenth Judicial
Circuit in and for Broward County, Florida. The complaint filed alleged that the
Prevailing Wage Ordinance did not apply to the construction of the National
Center for two reasons: (i) the Prevailing Wage Ordinance only applies to
construction contracts in excess of $250,000 to which Broward County is a party
and Broward County is not a party to the construction contract between Arena
Development and the general contractor, and (ii) the development agreement
contains all the obligations and responsibilities of both parties and does not
include a provision mandating that Arena Development Company Ltd. comply with
the Prevailing Wage Ordinance. The Prevailing Wage Ordinance requires that all
contracts to which the ordinance applies must contain such a provision. The
lawsuit asked for a declaratory judgment finding that the Prevailing Wage
Ordinance did not apply to the construction of the National Center and that
Arena Development Company Ltd. could continue without reference to the
ordinance. On February 21, 1997, the Seventeenth Judicial Circuit Court ruled
against the Company's complaint, finding that the Prevailing Wage Ordinance was
applicable. On March 18, 1998, in a 2-1 decision, the Fourth District Court of
Appeals affirmed the trial court's finding. On May 8, 1998, the Court of Appeals
denied the Company's motion for rehearing and the Company decided not to pursue
any further appeals. The Company estimates it will be liable for additional
construction costs of up to $6.5 million.
The Company is not presently involved in any other material legal
proceedings. However, the Company may from time to time become a party to legal
proceedings arising in the ordinary course of business, which are incidental to
the business. While the results of the legal proceedings described above and
other proceedings which arose in the normal course of business cannot be
predicted with certainty, management believes that losses, if any, resulting
from the ultimate resolution of these matters will not have a material adverse
effect on the Company's consolidated results of operations, consolidated cash
flows or consolidated financial position. However, unfavorable resolution of
each matter individually or in the aggregate could have a material affect on the
consolidated results of operations or cash flows for the periods in which they
are resolved.
ENVIRONMENTAL MATTERS
Under various federal, state, and local environmental laws and regulations,
an owner or operator of real estate may be liable for the costs of removal or
remediation of certain hazardous or toxic substances on such property. In
connection with the ownership and operation of its properties, the Company may
be potentially liable for any such costs. Phase I environmental site assessments
(the "Phase I Assessments") have been
F-26
<PAGE> 165
FLORIDA PANTHERS HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
obtained for the real property on which each of the Resort Facilities is
located. In addition, Phase II environmental assessments (the "Phase II
Assessments") have been conducted at several properties. Phase I Assessments are
intended to identify existing, potential and suspected environmental
contamination and regulatory compliance concerns, and generally include
historical reviews of the property, reviews of certain public records,
preliminary investigations of the site and surrounding properties and the
preparation and issuance of written reports. Phase II Assessments involve the
sampling of environmental media, such as subsurface soil and groundwater, to
confirm whether contamination is present at areas of concern identified during
the course of a Phase I Assessment.
The Phase I and Phase II Assessments have not revealed any environmental
liability or compliance concerns that the Company believes would have a material
adverse effect on the Company's business, assets, results of operations or
liquidity of its Leisure and Recreation Business, nor is the Company aware of
any such material liability or concern. However, the environmental assessments
have revealed the presence of limited areas of contamination on the properties,
some of which will require remediation. The environmental assessments have also
identified operations that are not strictly in compliance with applicable
environmental laws or that will need to be upgraded to remain in compliance with
applicable environmental laws (including underground storage tanks at a few of
the properties). The most significant area of contamination identified by the
Phase I and Phase II Assessment involves an area within the maintenance area of
Rolling Hills used when mixing pesticides and herbicides. Pursuant to an
agreement with the former owner of Rolling Hills, the Company has the benefit of
an indemnity that the Company believes will defray the costs associated with the
investigation and remediation at this location.
13. LICENSE AND FRANCHISE AGREEMENTS
Upon the acquisition of Pier 66, the Company assumed the rights of the
franchise agreement with Hyatt Franchise Corporation. The franchise agreement
expires in November 2014 with various early termination provisions and
liquidated damages for early termination. The franchise agreement provides a
reimbursement of not more than $15,000 for out-of-pocket expenses incurred
relating to the granting of the franchise and monthly royalty fees equal to 5.0%
of gross room revenue. The franchise agreement also provides for the pro-rata
allocation of certain Hyatt "allocable chain expenses". Aggregate Hyatt fees and
expenses amounted to $1.3 million for the year ended June 30, 1998 and $398,000
for the period from the Pier 66 acquisition (March 4, 1997) to June 30, 1997.
The franchise agreement also requires maintenance of a customary reserve for
replacement of furniture, fixtures and equipment equal to 4.0% of gross room
revenue. All such cash has been utilized for its required purpose through June
30, 1998.
Upon the acquisition of Bahia Mar, the Company assumed the rights of a
ten-year license agreement with Radisson Hotels International, Inc.
("Radisson"). The terms of the agreement allow the Company to operate Bahia Mar
using the Radisson system. Annual fees payable to Radisson pursuant to the
agreement equal 5.0% of gross room sales. Fees paid to Radisson pursuant to the
license agreement totaled $422,000 for the year ended June 30, 1998 and $134,000
from the date of Bahia Mar's acquisition (March 4, 1997) to June 30, 1997.
14. MANAGEMENT AGREEMENTS
The Company is a party to the Pier 66 Management Agreement with Pier 66
Management pursuant to which Pier 66 Management operates Pier 66. The Pier 66
Management Agreement expires in March 2000 and provides for an annual management
fee of $500,000.
The Company is a party to the Bahia Mar Management Agreement with Bahia Mar
Management pursuant to which Bahia Mar Management operates Bahia Mar. The Bahia
Mar Management Agreement expires in March 2000 and requires annual fees equal to
2.0% of total revenue. Management fees under the
F-27
<PAGE> 166
FLORIDA PANTHERS HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Bahia Mar Management Agreement totaled $394,000 and $127,000 for the years ended
June 30, 1998 and 1997, respectively, and are included as a component of
Selling, general and administrative expenses.
The Company is also a party to the Edgewater Resort Management Agreement
and Arizona Biltmore Management Agreement. The Edgewater Management Agreement
expires in October 1999 and requires annual fees equal to 2.0% of total revenue.
Management fees under the Edgewater Resort Management Agreement were not
material for the period from the date of acquisition through June 30, 1998. The
Arizona Biltmore Management Agreement expires in April 2008 and provides for an
annual management fee of $1.0 million through April 2001 and $500,000
thereafter.
15. RELATED PARTY TRANSACTIONS
It is the Company's policy to enter into transactions with related parties
on terms that, on the whole, are no less favorable than those which would be
available from unaffiliated parties.
The Company pays a management fee to Huizenga Holdings, Inc., a corporation
whose sole shareholder is the Company's Chairman, equal to 1% of total revenue,
excluding all NHL national television revenue, enterprise rights and expansion
fees. Such fees totaled approximately $2.9 million, $498,000 and $293,000 for
the years ended June 30, 1998, 1997 and 1996, respectively, and are reflected as
a component of Selling, general and administrative expenses in the accompanying
Consolidated Statements of Operations.
In August 1994, the Company's Chairman purchased a 50% interest in Leisure
Management International, Inc., ("LMI") which manages the Miami Arena pursuant
to a management agreement (the "Management Agreement") with Decoma. Under the
terms of the Management Agreement, LMI received from Decoma a management fee of
$137,000, $120,000 and $109,000 for the years ended June 30, 1998, 1997 and
1996, respectively. The Company has also entered into an agreement with LMI to
manage the National Center, which is scheduled to open in October 1998.
In June 1993, the Company, along with an affiliate, Panthers Investment
Venture borrowed $20.0 million bearing interest at LIBOR plus .75% per annum for
the purpose of financing a portion of the NHL franchise fee. Following the
completion of the IPO, this note was repaid in full. In conjunction with the
IPO, the Chairman received in exchange for this note 4,149,710 shares of Class A
Common Stock and 255,000 shares of Class B Common Stock. Prior to the IPO, the
Company incurred related party interest expense of $1.6 million and $3.4 million
for the years ended June 30, 1997 and 1996, respectively.
On March 4, 1997, the Company acquired all of the ownership interests,
comprised of capital stock and partnership interests, of each of the entities
which own, directly or indirectly, all of the general and limited partnership
interests in Pier 66 and Bahia Mar for 8,400,000 shares of Class A Common Stock.
Four of the Company's directors collectively received 2,395,205 shares of the
Company's Class A Common Stock in connection with the acquisitions.
16. OPERATIONS BY BUSINESS SEGMENT
The Company is a holding company, operating in the United States, with
major business operations in the leisure and recreation and entertainment and
sports industries. The following table presents financial information relating
to the Company's business segments as of and for the years ended June 30 (in
000's):
<TABLE>
<CAPTION>
1998 1997 1996
---------- -------- --------
<S> <C> <C> <C>
Revenue:
Leisure and recreation.............................. $ 252,603 $ 17,567 $ --
Entertainment and sports............................ 43,586 36,695 34,087
---------- -------- --------
$ 296,189 $ 54,262 $ 34,087
========== ======== ========
</TABLE>
F-28
<PAGE> 167
FLORIDA PANTHERS HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
<TABLE>
<CAPTION>
1998 1997 1996
---------- -------- --------
<S> <C> <C> <C>
Amortization and depreciation:
Leisure and recreation.............................. $ 17,950 $ 1,459 $ --
Entertainment and sports............................ 5,168 4,239 9,815
Corporate........................................... 37 -- --
---------- -------- --------
$ 23,155 $ 5,698 $ 9,815
========== ======== ========
Operating income (loss):
Leisure and recreation.............................. $ 52,769 $ 4,053 $ --
Entertainment and sports............................ (17,503) (10,533) (20,057)
Corporate........................................... (9,814) (1,899) --
---------- -------- --------
$ 25,452 $ (8,379) $(20,057)
========== ======== ========
Capital expenditures:
Leisure and recreation.............................. $ 46,892 $ 419 $ --
Entertainment and sports............................ 530 1,058 140
Corporate........................................... 384 17 --
---------- -------- --------
$ 47,806 $ 1,494 $ 140
========== ======== ========
Assets:
Leisure and recreation.............................. $1,046,074 $533,493 $ --
Entertainment and sports............................ 76,441 65,338 47,760
Corporate........................................... 5,692 1,561 --
---------- -------- --------
$1,128,207 $600,392 $ 47,760
========== ======== ========
</TABLE>
17. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
(IN THOUSANDS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER
-------- ------- -------- -------
<S> <C> <C> <C> <C> <C>
Revenue........................................... 1998 $ 32,949 $76,580 $105,752 $80,908
1997 1,167 14,216 21,754 17,125
Operating income (loss)........................... 1998 (9,246) 4,451 22,306 7,941
1997 (3,904) (2,556) 782 (2,701)
Net income (loss)................................. 1998 (12,157) 1,161 13,919 (1,650)
1997 (5,274) (3,525) 1,277 (2,738)
Basic and diluted income (loss) per share......... 1998 (0.38) 0.03 0.39 (0.05)
1997 (1.00) (0.37) 0.07 (0.10)
</TABLE>
18. INCOME TAXES
There is no current or deferred tax expense for the years ended June 30,
1998, 1997 and 1996. The Company utilized net operating loss carryforwards in
1998 and was in a loss position in 1997 and 1996. The benefits of timing
differences have not previously been recorded.
The deferred tax consequences of temporary differences in reporting items
for financial statement and income tax purposes are recognized, if appropriate.
Realization of the future tax benefits related to the deferred tax assets is
dependent on many factors, including the Company's ability to generate taxable
income within the net operating loss carryforward period. Management has
considered these factors in reaching its conclusion as to the valuation
allowance for financial reporting purposes. The income tax effect of temporary
F-29
<PAGE> 168
FLORIDA PANTHERS HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
differences comprising the deferred tax assets and deferred tax liabilities on
the accompanying Consolidated Balance Sheets is set forth below (in 000's):
<TABLE>
<CAPTION>
1998 1997
------ -------
<S> <C> <C>
Deferred tax assets:
Federal tax operating loss and general tax credit
carryforwards.......................................... $5,160 $ 6,193
Deferred revenue.......................................... 2,297 --
Depreciation and other.................................... -- 81
Deferred tax liabilities:
Depreciation and other.................................... (361) --
Valuation allowance....................................... (6,564) ( 6,274)
------ -------
Net deferred tax assets........................... $ 532 $ --
====== =======
</TABLE>
A reconciliation between the statutory federal income tax expense and the
income tax expense at the Company's effective rate for the period ended June 30,
1998 and 1997 is set forth below (in 000's). No reconciliation is necessary for
the year ended June 30, 1996 as the Company was organized as a partnership.
<TABLE>
<CAPTION>
1998 1997
------- -------
<S> <C> <C>
Computed expected income tax expense (benefit) based on
statutory federal income tax rate......................... $ 433 $(3,488)
State income taxes, net of federal benefit.................. (114) (873)
Non-deductible amortization................................. 507 165
Adjustments relating to business acquisitions............... (1,906) (2,521)
Other....................................................... 259 444
Increase in net operating loss carryforwards................ 821 6,273
------- -------
Provision for income taxes.................................. $ -- $ --
======= =======
</TABLE>
The Company has available net operating loss carryforwards of approximately
$13.1 million for tax purposes to offset future taxable income. The net
operating loss carryforwards, if not fully utilized, begin to expire in 2012.
19. EMPLOYEE BENEFITS
Certain of the Company's employees are participants in a 401(k) Savings and
Retirement Plan (the "401(k)"), a defined contribution plan for non-players. The
401(k) is available to employees over the age of 21 with at least one year of
service who work a minimum of 1,000 hours per year. The Company may match a
discretionary percentage of the amount contributed by the participant up to a
limit of 6% of annual compensation. Employees may contribute up to 10% of their
annual compensation. Participants are automatically vested in compensation
deferrals. Vesting in Company matching contributions is at the rate of 20% each
year, after one year of plan participation, reaching 100% after five years. The
Company did not make any matching contributions during the years ended June 30,
1998, 1997 or 1996.
Boca Resort has in place a 401(a) Plan (the "Boca Plan") for which
substantially all of Boca Resort's employees are eligible to participate. The
Boca Plan allows participants to contribute up to 16% of their total
compensation. The Company is required to contribute 50% of the first 6% of the
employee's earnings. The Company has until December 31, 1998 to bring the Boca
Plan into compliance with IRS coverage regulations.
The Club's NHL hockey players are covered under the NHL Club Pension Plan
and Trust (the "Pension Plan") which is administered by the NHL and represents a
multi-employer defined contribution plan. The Club's contributions to the
Pension Plan totaled $148,000, $157,000 and $180,000 for the years ended June
30, 1998, 1997 and 1996, respectively.
F-30
<PAGE> 169
FLORIDA PANTHERS HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The Company has commercial insurance coverage to cover employees' (other
than players and coaches) health care costs for which employees make partial
contributions. Players and coaches are covered under the NHL Medical and Dental
Plan administered by the NHL, for which the Company pays 100% of the premiums.
20. SUBSEQUENT EVENT
In August 1998, the Company closed in escrow, subject to receiving certain
zoning approvals, on approximately 200 acres of undeveloped land located in
Collier County, Florida for $19.7 million.
F-31
<PAGE> 170
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Partners of
2301 SE 17th St., Ltd.:
We have audited the accompanying balance sheet of 2301 SE 17th St., Ltd.
(the "Partnership", a Florida limited partnership) as of December 31, 1996, and
the related statements of operations, partners' equity and cash flows for the
year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of 2301 SE 17th St., Ltd. as of
December 31, 1996, and the results of its operations and its cash flows for the
year then ended in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Fort Lauderdale, Florida,
January 10, 1997.
F-32
<PAGE> 171
INDEPENDENT AUDITORS' REPORT
The Partners
2301 SE 17th St., Ltd.:
We have audited the accompanying balance sheet of 2301 SE 17th St., Ltd. (a
Florida limited partnership) as of December 31, 1995, and the related statements
of operations, partners' equity and cash flows for each of the years in the two
year period ended December 31, 1995. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of 2301 SE 17th St., Ltd. at
December 31, 1995, and the results of its operations and its cash flows for each
of the years in the two year period ended December 31, 1995 in conformity with
generally accepted accounting principles.
KPMG LLP
Fort Lauderdale, Florida,
April 19, 1996
F-33
<PAGE> 172
2301 SE 17TH ST., LTD.
BALANCE SHEETS
DECEMBER 31, 1996 AND 1995
ASSETS
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents................................. $ 5,665,918 $ 5,296,563
Accounts receivable, net of allowance for doubtful
accounts of $25,000 as of December 31, 1996 and 1995... 1,270,539 1,510,354
Inventories............................................... 417,775 360,691
Prepaid expenses and other current assets................. 52,650 112,827
----------- -----------
Total current assets.............................. 7,406,882 7,280,435
PROPERTY AND EQUIPMENT, net of accumulated depreciation of
$4,989,415 and $3,402,512 as of December 31, 1996 and
1995, respectively........................................ 28,435,871 29,045,675
OTHER ASSETS, net of accumulated amortization of $1,659,860
and $1,575,526 as of December 31, 1996 and 1995,
respectively.............................................. 350,338 387,638
----------- -----------
Total assets...................................... $36,193,091 $36,713,748
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
CURRENT LIABILITIES:
Accounts payable.......................................... $ 734,140 $ 1,210,721
Accrued liabilities....................................... 974,562 1,070,441
Advance deposits.......................................... 400,049 522,622
----------- -----------
Total current liabilities......................... 2,108,751 2,803,784
LONG-TERM DEBT.............................................. 25,741,929 25,522,398
----------- -----------
Total liabilities................................. 27,850,680 28,326,182
COMMITMENTS AND CONTINGENCIES (Notes 1 and 9)
PARTNERS' EQUITY:
General Partner........................................... 83,424 83,875
Class A Limited Partners.................................. 8,258,887 8,303,591
Class B Limited Partners.................................. 100 100
----------- -----------
Total partners' equity............................ 8,342,411 8,387,566
----------- -----------
Total liabilities and partners' equity............ $36,193,091 $36,713,748
=========== ===========
</TABLE>
The accompanying notes to financial statements are an integral part of these
balance sheets.
F-34
<PAGE> 173
2301 SE 17TH ST., LTD.
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
1996 1995 1994
------------ ------------ ------------
<S> <C> <C> <C>
OPERATING REVENUES:
Rooms.......................................... $ 12,885,858 $ 11,778,303 $ 9,784,119
Yachting and marina service.................... 3,613,361 3,186,513 3,157,742
Food, beverage and banquets.................... 8,756,909 8,151,581 6,889,860
Telephone, retail and other.................... 2,466,427 2,516,960 2,100,903
------------ ------------ ------------
Total operating revenues............... 27,722,555 25,633,357 21,932,624
COSTS AND EXPENSES:
Rooms.......................................... 2,801,808 2,659,149 2,443,787
Yachting and marina service.................... 1,199,177 984,456 869,688
Food, beverage and banquets.................... 6,543,959 6,273,101 5,670,050
Telephone, retail and other.................... 1,098,451 1,121,172 1,082,039
Selling, general and administrative............ 3,389,522 3,488,941 3,020,107
Property operations, maintenance and energy
costs....................................... 2,723,454 2,535,241 2,423,787
Royalty fees, property taxes, insurance,
etc......................................... 1,404,356 1,189,549 1,103,749
Depreciation and amortization.................. 1,675,608 1,566,582 1,428,172
Related party management fee................... 530,000 514,000 560,000
------------ ------------ ------------
Total costs and expenses............... 21,366,335 20,332,191 18,601,379
Income from operations................. 6,356,220 5,301,166 3,331,245
OTHER INCOME (EXPENSE):
Interest income................................ 233,859 225,111 120,989
Interest expense............................... (2,375,634) (2,424,040) (2,168,908)
Loss on disposal of fixed assets............... (59,600) (114,230) (12,523)
------------ ------------ ------------
NET INCOME....................................... 4,154,845 2,988,007 1,270,803
PRO FORMA INCOME TAX PROVISION (Note 3).......... 1,620,389 1,165,323 495,613
------------ ------------ ------------
PRO FORMA NET INCOME AFTER INCOME TAXES.......... $ 2,534,456 $ 1,822,684 $ 775,190
============ ============ ============
NET INCOME ALLOCATED TO:
General Partner................................ $ 41,549 $ 29,880 $ 12,708
Class A Limited Partners....................... 4,113,296 2,958,127 1,258,095
Class B Limited Partners....................... -- -- --
------------ ------------ ------------
Total Net income....................... $ 4,154,845 $ 2,988,007 $ 1,270,803
============ ============ ============
</TABLE>
The accompanying notes to financial statements are an integral part of these
statements.
F-35
<PAGE> 174
2301 SE 17TH ST., LTD.
STATEMENTS OF PARTNERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
CLASS A CLASS B
GENERAL PARTNER LIMITED PARTNERS LIMITED PARTNERS TOTAL
--------------- ---------------- ---------------- -----------
<S> <C> <C> <C> <C>
PARTNERS' EQUITY,
December 31, 1993.............. $ 76,287 $ 7,552,369 $100 $ 7,628,756
Partner distributions.......... (10,000) (990,000) -- (1,000,000)
Net income..................... 12,708 1,258,095 -- 1,270,803
-------- ----------- ---- -----------
PARTNERS' EQUITY,
December 31, 1994.............. 78,995 7,820,464 100 7,899,559
Partner distributions.......... (25,000) (2,475,000) -- (2,500,000)
Net income..................... 29,880 2,958,127 -- 2,988,007
-------- ----------- ---- -----------
PARTNERS' EQUITY,
December 31, 1995.............. 83,875 8,303,591 100 8,387,566
Partner distributions.......... (42,000) (4,158,000) -- (4,200,000)
Net income..................... 41,549 4,113,296 -- 4,154,845
-------- ----------- ---- -----------
PARTNERS' EQUITY,
December 31, 1997.............. $ 83,424 $ 8,258,887 $100 $ 8,342,411
======== =========== ==== ===========
</TABLE>
The accompanying notes to financial statements are an integral part of these
statements.
F-36
<PAGE> 175
2301 SE 17TH ST., LTD.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income........................................ $ 4,154,845 $ 2,988,007 $ 1,270,803
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization.................. 1,675,608 1,566,582 1,428,172
Amortization of debt discount.................. 219,532 484,462 540,505
Loss on disposal of fixed assets............... 59,600 114,230 12,523
Changes in assets and liabilities:
Accounts receivable.......................... 239,815 (553,103) 262,716
Inventories.................................. (57,084) 4,009 67,323
Prepaid expenses and other current assets.... 60,177 13,538 91,229
Other assets................................. 6,706 37,494 31,515
Restricted cash fund......................... -- 21,357 482,585
Accounts payable and accrued liabilities..... (572,461) 794,087 (1,386,047)
Advance deposits............................. (122,573) (124,738) 304,176
----------- ----------- -----------
Total adjustments......................... 1,509,320 2,357,918 1,834,697
----------- ----------- -----------
Net cash provided by operating
activities.............................. 5,664,165 5,345,925 3,105,500
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment............... (1,094,810) (1,049,310) (1,103,095)
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt...................... -- -- 994,105
Repayment of long-term debt....................... -- -- (48,000)
Distributions to partners......................... (4,200,000) (2,500,000) (1,000,000)
----------- ----------- -----------
Net cash used in financing activities..... (4,200,000) (2,500,000) (53,895)
----------- ----------- -----------
Net increase in cash and cash
equivalents............................. 369,355 1,796,615 1,948,510
CASH AND CASH EQUIVALENTS, beginning of period...... 5,296,563 3,499,948 1,551,438
----------- ----------- -----------
CASH AND CASH EQUIVALENTS, end of period............ $ 5,665,918 $ 5,296,563 $ 3,499,948
=========== =========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for interest.......... $ 2,156,102 $ 1,936,838 $ 1,628,403
=========== =========== ===========
</TABLE>
The accompanying notes to financial statements are an integral part of these
statements.
F-37
<PAGE> 176
2301 SE 17TH ST., LTD.
NOTES TO FINANCIAL STATEMENTS
(1) BACKGROUND OF THE PARTNERSHIP AND OPERATIONS:
2301 SE 17th St., Ltd. (the "Partnership"), a Florida limited partnership,
was formed on March 5, 1993 for the purpose of acquiring, owning and operating
Hyatt Regency Pier 66 Resort Hotel and Marina, a 380-room resort hotel and
conference facility and a marina which accommodates 142 yachts, located on
approximately 23 acres in Fort Lauderdale, Florida, (the "Resort"). The
partnership agreement, amended and modified on June 29, 1993, is hereinafter
referred to as the "Partnership Agreement".
The Partnership acquired its interest in the Resort from SSA Associates and
Pier Operating Associates, Ltd. on June 29, 1993. The aggregate purchase price
paid by the Partnership for its interest in the Resort was approximately
$30,310,000. Of this amount, $22,000,000 was funded by refinancing the existing
mortgage loan on the Resort.
The Partnership will terminate on December 31, 2035, or sooner, in
accordance with the terms of the Partnership Agreement (see Note 11). The
General Partner of the Partnership is 2301 Mgt., Ltd. (the "General Partner").
2301 Joint Venture and Rahn Pier, Inc. are Class A Limited Partners and First
Winthrop Corporation and Sixty-Six Inc. are Class B Limited Partners.
Class B Limited Partners are not required to make additional capital
contributions, have no rights to vote on partnership matters and do not
participate in the allocation of partnership profits and losses. If the General
Partner and the Class A Limited Partners have both received the Minimum
Qualified Distributions (as defined in the Partnership Agreement), then 15
percent of the distributions with respect to a Capital Transaction (as defined
in the Partnership Agreement) that would otherwise have been made to the General
Partner and the Class A Limited Partners will instead be made to the Class B
Limited Partners.
After any special allocations required by the Partnership Agreement,
profits and losses of the Partnership shall be allocated 1 percent to the
General Partner and 99 percent to the Class A Limited Partners.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
(a) Basis of Accounting --
The accompanying financial statements include the accounts of the
Partnership prepared on the accrual basis of accounting in accordance with
generally accepted accounting principles.
(b) Cash and Cash Equivalents --
The Partnership considers all highly liquid investments purchased with a
maturity of three months or less to be cash equivalents. Cash equivalents are
stated at cost, which approximates market, and consist of repurchase agreements
and money market funds at December 31, 1996 and 1995.
(c) Inventories --
Inventories are stated at the lower of first-in, first-out cost or market.
Inventories consist of food and beverage, marina fuel, retail merchandise and
general store items.
(d) Depreciation --
The following estimated useful lives are used for depreciating property and
equipment on a straight-line basis.
<TABLE>
<S> <C>
Land improvements.............................. 20 years
Building and improvements...................... 40 years
Furnishings and equipment...................... 5-7 years
</TABLE>
F-38
<PAGE> 177
2301 SE 17TH ST., LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(e) Property and Equipment --
The Partnership's assets are carried at the lower of cost or estimated fair
value. All subsequent expenditures for improvements are capitalized. The costs
of repairs and maintenance are charged to expense as incurred.
The Partnership adopted Statement of Financial Accounting Standards No.
121 -- Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed of, as of January 1, 1995, and accordingly evaluates its
real estate investments periodically to assess whether any impairment
indications are present, including recurring operating losses and significant
adverse changes in legal factors or business climate that affect the recovery of
the recorded value. If any real estate investment is considered impaired, a loss
is provided to reduce the carrying value of the property to its estimated fair
value. The implementation of this standard had no impact on the financial
statements.
(f) Use of Estimates --
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect certain reported amounts in the financial statements and
accompanying notes. Actual results could differ from those estimates.
(g) Fair Value of Financial Instruments --
The fair values of the Partnership's financial instruments, including
accounts receivable, long-term debt, accounts payable and accrued liabilities,
advance deposits, and other financial instruments, generally determined using
the present value of estimated future cash flows using a discount rate
commensurate with the risks involved, approximate their carrying or contract
values.
(h) Business Risk --
Any substantial change in economic conditions or any significant price
fluctuations related to the travel and tourism industry could affect
discretionary consumer spending and have a material impact on the Company's
business. In addition, the Company is subject to competition from other entities
engaged in the business of resort development and operation, including interval
ownership, condominiums, hotels and motels.
(i) Concentration of Credit Risk --
The Partnership's receivables contain significant amounts due from cruise
lines which are granted credit by the Partnership. The amount of such credit is
determined by the Partnership's management on an individual basis. Amounts
outstanding at December 31, 1996 are $181,228 and are included in Accounts
receivable in the accompanying balance sheet.
(3) INCOME TAXES:
No provision for income taxes is reflected in the accompanying financial
statements. The partners are required to report on their individual income tax
returns, their allocable share of income, gains, losses, deductions and credits
of the Partnership. The pro forma income tax provision in the accompanying
statements of operations is presented for informational purposes as if the
Partnership was a C corporation during the years presented. Pro forma taxes have
been computed based on an overall estimated effective rate of 39%.
F-39
<PAGE> 178
2301 SE 17TH ST., LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(4) ACCRUED LIABILITIES:
Accrued liabilities consist of the following as of December 31, 1996 and
1995:
<TABLE>
<CAPTION>
1996 1995
-------- ----------
<S> <C> <C>
Accrued salaries and wages........................... $195,613 $ 168,736
Accrued vacation..................................... 227,883 191,046
Sales tax payable.................................... 129,306 108,621
Other accrued liabilities............................ 421,760 602,038
-------- ----------
$974,562 $1,070,441
======== ==========
</TABLE>
(5) LONG-TERM DEBT:
The property was acquired subject to assumption of a portion of the
existing mortgage loan in the principal amount of $22,000,000 ("Note 1") from
Kemper Investors Life Insurance Company. In addition, the Partnership obtained
an additional mortgage note from Kemper for $4,000,000 ("Note 2") to be drawn
upon to finance the cost of certain capital improvements, to provide initial
working capital, and to fund interest accrued on the mortgage notes between
January 1, 1994 and December 31, 1995 to the extent cash flows from operations
are insufficient for such payment. Both mortgage notes mature on June 28, 2000
and bear interest at varying rates for specified periods. This rate was 8.39
percent and 8.0 percent at December 31, 1996 and 1995, respectively. The
mortgage notes require monthly payments of interest only throughout the term. A
balloon payment on the entire outstanding principal amount, together with the
final monthly payment of interest, will be due at maturity. Both mortgage notes
are collateralized by substantially all property and equipment including the
alcoholic beverage license, a security interest in the Hyatt franchise
agreement, an assignment of leases, rents and profits, trademarks and the
management agreement.
The outstanding balances of the notes at December 31, 1996 and 1995 were as
follows:
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
Note 1............................................ $21,951,325 $21,951,325
Note 2............................................ 4,000,000 4,000,000
----------- -----------
25,951,325 25,951,325
Less: Unamortized discount based on imputed
interest rate of 9%............................. (209,396) (428,927)
----------- -----------
$25,741,929 $25,522,398
=========== ===========
</TABLE>
As required by the loan agreement, the Partnership maintains a Capital
Expenditure Program ("CEP") reserve fund for the replacement of capital assets.
The CEP reserve equals 3 percent of gross revenues net of amounts expended by
the Resort for replacement of capital assets and is funded quarterly for the
preceding quarter. The CEP establishes a minimum level of fixed asset
expenditures to be made by the Partnership. To the extent these minimum
expenditure levels are not achieved, such shortfall is to be included in the CEP
fund. Beginning July 1, 1995, the Resort voluntarily increased the CEP reserve
to 4 percent of gross revenues; however, the loan agreement fund is only funded
for the required 3 percent. The CEP fund is also pledged as additional security
for the loan obligation. At December 31, 1996 and 1995, the balance of the CEP
reserve is $1,284 and $9,218, respectively, and is included in Other assets in
the accompanying balance sheets.
(6) MANAGEMENT AGREEMENT:
The Partnership entered into a hotel management agreement with Rahn Pier
Mgt., Inc., a company affiliated by common ownership and management with the
general partner and Class A limited partners, effective June 29, 1993. The
agreement provides for a management fee equal to three percent of gross
F-40
<PAGE> 179
2301 SE 17TH ST., LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
revenues during the first year, payable monthly. Management fees for the second
year equal two percent of gross revenues and for each year thereafter through
December 31, 2003, an amount equal to the total management fee during the second
year.
Management fees for the Resort amounted to approximately $530,000, $514,000
and $560,000, in 1996, 1995 and 1994, respectively, and are included in Related
party management fee in the accompanying statements of operations. Fees payable
to Rahn Pier Mgt., Inc. were approximately $50,000 as of December 31, 1996 and
1995. In addition, during 1994 construction management fees of $48,000 were paid
to Rahn Properties, Inc., an affiliate of the general partner and Class A
limited partners and are included in Royalty fees, property taxes, insurance,
etc., in the accompanying statements of operations.
(7) LICENSE AND FRANCHISE AGREEMENTS:
Hyatt Franchise--
As of November 14, 1994, Rahn Pier Mgt., Inc. entered into a franchise
agreement with Hyatt Franchise Corporation. The agreement is for a 20 year term
ending November 14, 2014 with various early termination provisions and
liquidated damages for early termination. The franchise agreement provides a
reimbursement of not more than $15,000 for out-of-pocket expenses incurred
relating to the granting of the franchise and monthly royalty fees based on a
percentage of gross room revenue: one percent from December 1, 1994 through
November 30, 1995, three percent from December 1, 1995 through November 30,
1996, four percent from December 1, 1996 through November 30, 1997 and five
percent thereafter. Royalty fees amounted to $398,175 and $132,449 in 1996 and
1995, respectively.
The agreement also provides for the pro-rata allocation of certain Hyatt
"allocable chain expenses" based on the relation of the Resort's total number of
guest rooms to the average number of guest rooms in all Hyatt Resorts in the
United States along with assessments for Gold Passport and national/regional
sales promotions. A fee for the use of the Hyatt reservation system is also
allocated to the Hotel. Total Hyatt expenses other than the royalty fees
amounted to $501,752 and $502,658 for the years ended December 31, 1996 and
1995, respectively, and are included in Rooms and Selling, general, and
administrative expenses in the accompanying statements of operations.
The franchise agreement requires the Partnership to maintain a reserve for
replacement of furniture, fixtures and equipment and those repairs and
maintenance costs which are capitalizable under generally accepted accounting
principles. This reserve is determined as a percentage of gross room revenues:
three percent through November 1995 and four percent thereafter.
The franchise agreement requires the significant renovation of guest rooms,
corridors and other public areas to be performed every five to six years. In
addition, the replacement of other furniture, fixtures and equipment, as defined
in the agreement, is to occur every 10 to 12 years.
F-41
<PAGE> 180
2301 SE 17TH ST., LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(8) PROPERTY AND EQUIPMENT:
Property and equipment consists of the following:
<TABLE>
<CAPTION>
1996 1995
-------------------- --------------------
<S> <C> <C>
Land and land improvements........................ $ 6,547,452 $ 6,547,452
Building and improvements......................... 18,937,564 18,396,035
Furnishings and equipment......................... 7,742,848 7,315,209
Operating equipment............................... 197,422 189,491
----------- -----------
33,425,286 32,448,187
Less: Accumulated depreciation.................... (4,989,415) (3,402,512)
----------- -----------
$28,435,871 $29,045,675
=========== ===========
</TABLE>
(9) LEASES:
Leases for operating equipment are contracted under the Partnership's name.
The following is a schedule of future minimum lease payments for the operating
leases, with initial or remaining terms in excess of one year, as of December
31, 1996:
<TABLE>
<S> <C>
1997............................................ $ 75,825
1998............................................ 48,196
1999............................................ 2,136
2000............................................ 356
Thereafter...................................... --
--------
$126,513
========
</TABLE>
Operating lease costs totaled $89,073, $92,717 and $91,820, for 1996, 1995
and 1994, respectively.
The Resort also has various marina and long-term tenant leases. The
receipts on these tenant leases are included in Telephone, retail and other.
Lease income totaled $381,296, $351,006 and $347,949, for 1996, 1995 and 1994,
respectively.
The Partnership leased a restaurant located at the Resort to an unrelated
party in August 1993 for a period of 5 years beginning November 1, 1993 with
four, five-year renewal options. Annual rent is $204,000 plus 7 percent of
annual gross sales in excess of $3,500,000.
Other leases for building space have been contracted with unrelated parties
for operation of a spa and a yacht broker. The spa lease is for a period of
three years beginning February 1, 1992 with two three-year renewal options. The
lease was renewed on February 1, 1995 with annual rent of $27,336 plus five
percent of gross sales. The yacht broker lease is for three years beginning
January 1, 1995 with one three-year renewal option. Annual rent is $92,812.
The following is a schedule of future minimum cash receipts for tenant
operating leases with initial term in excess of one year, as of December 31,
1996:
<TABLE>
<S> <C>
1997............................................ $239,373
1998............................................ 191,554
Thereafter...................................... --
</TABLE>
F-42
<PAGE> 181
2301 SE 17TH ST., LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(10) DEFERRED COMPENSATION PLAN:
The Rahn Pier Mgt., Inc. offers its employees a deferred compensation plan
(the "Plan") created in accordance with Internal Revenue Code Section 401(k).
The Plan is available to all employees with a minimum of 21 years of age and one
year of service. All of the costs are reimbursed by the Partnership.
The Plan's participants may contribute from one percent to 14 percent of
their compensation during the Plan year. Rahn Pier Mgt., Inc. matches 25 percent
of the first four percent contributed by each Plan participant and effective
January 1, 1996, the matched contributed percentage was increased to six
percent. Rahn Pier Mgt., Inc. incurred expenses related to the Plan of $48,359,
$40,791 and $45,973, in 1996, 1995 and 1994, respectively.
(11) EXCHANGE AGREEMENT:
On December 22, 1996, the Partnership entered into a definitive exchange
agreement with Florida Panthers Holdings, Inc. ("Holdings"), whereby Holdings
will acquire the Partnership in exchange for 4.45 million shares of Holdings'
Class A common stock. The transaction is subject to the approval of Holdings'
shareholders and as of January 10, 1997, had not been finalized.
F-43
<PAGE> 182
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Partners of
Rahn Bahia Mar, Ltd.:
We have audited the accompanying balance sheets of Rahn Bahia Mar, Ltd.
(the "Partnership", a Florida limited partnership) as of December 31, 1996 and
1995, and the related statements of operations, partners' equity and cash flows
for the years ended December 31, 1996 and 1995 and for the period from inception
(June 28, 1994) to December 31, 1994. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Rahn Bahia Mar, Ltd. as of
December 31, 1996 and 1995, and the results of its operations and its cash flows
for the years ended December 31, 1996 and 1995 and for the period from inception
(June 28, 1994) to December 31, 1994 in conformity with generally accepted
accounting principles.
ARTHUR ANDERSEN LLP
Fort Lauderdale, Florida,
January 10, 1997.
F-44
<PAGE> 183
RAHN BAHIA MAR, LTD.
BALANCE SHEETS
DECEMBER 31, 1996 AND 1995
ASSETS
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents................................. $ 2,653,789 $ 1,010,993
Accounts receivable, net of allowance for doubtful
accounts of $9,506 and $9,600 as of December 31, 1996
and 1995............................................... 604,720 519,779
Inventories............................................... 204,860 180,713
Prepaid expenses and other current assets................. 63,522 124,681
----------- -----------
Total current assets................................... 3,526,891 1,836,166
PROPERTY AND EQUIPMENT, net of accumulated depreciation of
$4,311,773 and $2,381,116 as of December 31, 1996 and
1995...................................................... 28,907,213 30,005,394
OTHER ASSETS................................................ 191,591 287,375
----------- -----------
Total assets...................................... $32,625,695 $32,128,935
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
CURRENT LIABILITIES:
Accounts payable.......................................... $ 292,067 $ 434,870
Accrued liabilities....................................... 567,160 476,064
Advance deposits.......................................... 486,313 385,864
Current portion of long-term debt......................... 15,495,000 710,000
----------- -----------
Total current liabilities......................... 16,840,540 2,006,798
LONG-TERM DEBT, net of current portion...................... -- 15,495,000
----------- -----------
Total liabilities................................. 16,840,540 17,501,798
COMMITMENTS AND CONTINGENCIES (Notes 1 and 7)
PARTNERS' EQUITY:
General Partner........................................... 157,852 146,272
Limited Partners.......................................... 15,627,303 14,480,865
----------- -----------
Total partners' equity............................ 15,785,155 14,627,137
----------- -----------
Total liabilities and partners' equity............ $32,625,695 $32,128,935
=========== ===========
</TABLE>
The accompanying notes to financial statements are an integral part of these
balance sheets.
F-45
<PAGE> 184
RAHN BAHIA MAR, LTD.
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995 AND
FOR THE PERIOD FROM INCEPTION (JUNE 28, 1994) TO DECEMBER 31, 1994
<TABLE>
<CAPTION>
PERIOD FROM
INCEPTION
(JUNE 28, 1994) TO
1996 1995 DECEMBER 31, 1994
----------- ----------- ------------------
<S> <C> <C> <C>
OPERATING REVENUES:
Rooms.......................................... $ 6,881,263 $ 5,338,328 $1,421,161
Yachting and marina service.................... 3,870,609 4,213,381 1,995,704
Food, beverage and banquets.................... 2,686,536 1,782,380 621,207
Telephone, retail and other.................... 2,571,326 2,135,405 671,859
----------- ----------- ----------
Total operating revenues............... 16,009,734 13,469,494 4,709,931
COSTS AND EXPENSES:
Rooms.......................................... 1,499,432 1,294,583 572,516
Yachting and marina service.................... 765,719 996,900 536,137
Food, beverage and banquets.................... 2,104,675 1,593,065 758,372
Telephone, retail and other.................... 1,126,165 1,060,365 399,090
Selling, general and administrative............ 1,789,949 1,759,968 671,422
Property operations, maintenance and energy
costs....................................... 1,406,022 1,286,357 760,174
Royalty fees, property taxes, insurance,
etc......................................... 1,881,905 1,851,898 745,386
Depreciation and amortization.................. 1,970,770 1,848,544 593,033
----------- ----------- ----------
Total costs and expenses............... 12,544,637 11,691,680 5,036,130
----------- ----------- ----------
Income (loss) from operations............... 3,465,097 1,777,814 (326,199)
OTHER INCOME (EXPENSE):
Interest income................................ 98,126 57,983 18,288
Interest expense............................... (1,405,205) (1,455,129) (443,629)
Loss on disposal of fixed assets............... -- (1,991) --
----------- ----------- ----------
(1,307,079) (1,399,137) (425,341)
----------- ----------- ----------
NET INCOME (LOSS)................................ 2,158,018 378,677 (751,540)
PRO FORMA INCOME TAX BENEFIT (PROVISION)
(Note 3)....................................... (841,626) (147,684) 293,101
----------- ----------- ----------
PRO FORMA NET INCOME (LOSS) AFTER INCOME TAXES... $ 1,316,392 $ 230,993 $ (458,439)
=========== =========== ==========
NET INCOME (LOSS) ALLOCATED TO:
General Partner................................ $ 21,580 $ 3,787 $ (7,515)
Limited Partners............................... 2,136,438 374,890 (744,025)
----------- ----------- ----------
Total Net income (loss)................ $ 2,158,018 $ 378,677 $ (751,540)
=========== =========== ==========
</TABLE>
The accompanying notes to financial statements are an integral part of these
statements.
F-46
<PAGE> 185
RAHN BAHIA MAR, LTD.
STATEMENTS OF PARTNERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995 AND
FOR THE PERIOD FROM INCEPTION (JUNE 28, 1994) TO DECEMBER 31, 1994
<TABLE>
<CAPTION>
GENERAL PARTNER LIMITED PARTNERS
(1%) (99%) TOTAL
--------------- ---------------- -----------
<S> <C> <C> <C>
PARTNERS' CONTRIBUTION, June 28, 1994............ $150,000 $14,850,000 $15,000,000
Net loss....................................... (7,515) (744,025) (751,540)
-------- ----------- -----------
PARTNERS' EQUITY, December 31, 1994.............. 142,485 14,105,975 14,248,460
Net income..................................... 3,787 374,890 378,677
-------- ----------- -----------
PARTNERS' EQUITY, December 31, 1995.............. 146,272 14,480,865 14,627,137
Partner Distributions.......................... (10,000) (990,000) (1,000,000)
Net income..................................... 21,580 2,136,438 2,158,018
-------- ----------- -----------
PARTNERS' EQUITY, December 31, 1996.............. $157,852 $15,627,303 $15,785,155
======== =========== ===========
</TABLE>
The accompanying notes to financial statements are an integral part of these
statements.
F-47
<PAGE> 186
RAHN BAHIA MAR, LTD.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995 AND
FOR THE PERIOD FROM INCEPTION (JUNE 28, 1994) TO DECEMBER 31, 1994
<TABLE>
<CAPTION>
PERIOD FROM
INCEPTION
(JUNE 28, 1994) TO
1996 1995 DECEMBER 31, 1994
----------- ----------- ------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss).............................. $ 2,158,018 $ 378,677 $ (751,540)
Adjustments to reconcile net income (loss) to
cash provided by operating activities --
Depreciation and amortization............... 1,970,770 1,848,544 593,033
Loss on disposal of fixed assets............ -- 1,991 --
Changes in assets and liabilities:
Accounts receivable....................... (84,941) (143,063) (376,716)
Inventories............................... (24,147) (5,469) (175,244)
Prepaid expenses and other current
assets................................. 61,159 (2,270) (122,411)
Other assets.............................. 95,784 (44,983) (302,522)
Accounts payable, accrued liabilities and
advance deposits....................... 48,742 (1,298,268) 2,595,066
----------- ----------- ------------
Total adjustments...................... 2,067,367 356,482 2,211,206
----------- ----------- ------------
Net cash provided by operating
activities........................... 4,225,385 735,159 1,459,666
----------- ----------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment............ (872,589) (3,776,347) (28,612,485)
----------- ----------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Long-term debt proceeds........................ -- 3,553,715 13,196,285
Long-term debt repayments...................... (710,000) (545,000) --
Partners' capital contribution................. -- -- 15,000,000
Partners' capital distribution................. (1,000,000) -- --
----------- ----------- ------------
Net cash provided by (used in)
financing activities................. (1,710,000) 3,008,715 28,196,285
----------- ----------- ------------
Net increase (decrease) in cash and
cash equivalents..................... 1,642,796 (32,473) 1,043,466
CASH AND CASH EQUIVALENTS, beginning of period... 1,010,993 1,043,466 --
----------- ----------- ------------
CASH AND CASH EQUIVALENTS, end of period......... $ 2,653,789 $ 1,010,993 $ 1,043,466
=========== =========== ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for interest....... $ 1,405,205 $ 1,328,496 $ 497,043
=========== =========== ============
</TABLE>
The accompanying notes to financial statements are an integral part of these
statements.
F-48
<PAGE> 187
RAHN BAHIA MAR, LTD.
NOTES TO FINANCIAL STATEMENTS
(1) BACKGROUND OF THE PARTNERSHIP AND OPERATIONS:
Rahn Bahia Mar, Ltd. (the "Partnership"), a Florida limited partnership,
was formed and began operations on June 28, 1994 for the purpose of owning the
Radisson Bahia Mar Resort and Yachting Center (the "Resort"), in Fort
Lauderdale, Florida. Rahn Bahia Mar, G.P., Ltd. (the "General Partner"), a
Florida limited partnership, is the general partner of the Partnership (1%
owner) and engages in transactions on the Partnership's behalf. Limited partners
include Rahn Bahia Mar, Inc., a Florida corporation (19.5% owner), and Bahia Mar
Joint Venture, a Florida general partnership (79.5% owner). The term of the
partnership agreement is 50 years and expires December 31, 2044.
The Partnership's tax basis profits, losses and excess net cash flows, as
defined by the Partnership agreement (the "Agreement"), are allocated to the
partners on the basis of their respective percentage interests in the
Partnership, as defined by the Agreement.
On June 28, 1994, the Partnership entered into a license agreement with
Radisson Hotels International, Inc. ("Radisson"), covering a period of 10 years.
The terms of the agreement allow the Partnership to operate the Resort using the
Radisson system. Annual fees payable to Radisson pursuant to the agreement range
from one percent to four percent (increasing one percent each year) of the first
$7,000,000 of gross room sales and five percent of gross room sales (as defined
by the agreement) in excess of $7,000,000 through December 31, 1997. The
remainder of the term requires fees in the amount of five percent of gross room
sales.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
(a) Basis of Accounting --
The accompanying financial statements include the accounts of the
Partnership prepared on the accrual basis of accounting in accordance with
generally accepted accounting principles.
(b) Cash and Cash Equivalents --
The Partnership considers all highly liquid investments purchased with a
maturity of three months or less to be cash equivalents. Cash equivalents are
stated at cost, which approximates market, and consist of repurchase agreements
and money market funds at December 31, 1996 and 1995.
(c) Inventories --
Inventories are stated at the lower of first-in, first-out cost or market.
Inventories consist of food and beverage, marina fuel, retail merchandise and
general store items.
(d) Depreciation --
The following estimated useful lives are used for depreciating property and
equipment on a straight-line basis:
<TABLE>
<S> <C>
Land improvements.................................. 15 years
Building and improvements.......................... 40 years
Furnishings........................................ 7 years
</TABLE>
(e) Property and Equipment --
The Partnership's assets are carried at the lower of cost or estimated fair
value. All subsequent expenditures for improvements are capitalized. The costs
of repairs and maintenance are charged to expense as incurred.
F-49
<PAGE> 188
RAHN BAHIA MAR, LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The Partnership adopted Statement of Financial Accounting Standards No.
121 -- Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed of, as of January 1, 1995, and accordingly evaluates its
real estate investments periodically to assess whether any impairment
indications are present, including recurring operating losses and significant
adverse changes in legal factors or business climate that affect the recovery of
the recorded value. If any real estate investment is considered impaired, a loss
is provided to reduce the carrying value of the property to its estimated fair
value. At the date of implementation, this standard had no impact on the
Partnership's financial statements.
(f) Use of Estimates --
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect certain reported amounts in the financial statements and
accompanying notes. Actual results could differ from those estimates.
(g) Fair Value of Financial Instruments --
The fair values of the Partnership's financial instruments, including
accounts receivable, long-term debt, accounts payable and accrued liabilities,
advance deposits, and other financial instruments, generally determined using
the present value of estimated future cash flows using a discount rate
commensurate with the risks involved, approximate their carrying or contract
values.
(h) Business Risk --
Any substantial change in economic conditions or any significant price
fluctuations related to the travel and tourism industry could affect
discretionary consumer spending and have a material impact on the Partnership's
business. In addition, the Partnership is subject to competition from other
entities engaged in the business of resort development and operation, including
interval ownership, condominiums, hotels and motels.
(i) Concentration of Credit Risk --
The Partnership's receivables contain significant amounts due from cruise
lines which are granted credit by the Partnership. The amount of such credit is
determined by the Partnership's management on an individual basis.
(3) INCOME TAXES:
Provisions for federal and state income taxes have not been made in the
accompanying financial statements, as the Partnership's tax basis profits and
losses are allocated to the partners (see Note 1). The pro forma income tax
provision in the accompanying statement of operations is presented for
informational purposes as if the Partnership was a C corporation during the
years for which pro forma information is presented. Such pro forma taxes have
been computed on an overall estimated effective rate of 39%.
(4) RELATED PARTY TRANSACTIONS:
Rahn Properties, Inc. ("Rahn"), provided renovation management services to
the Partnership. Fees totaling $88,000 and $114,000 in 1995 and 1994,
respectively, were paid to Rahn in connection with the renovation of the Hotel
and are reflected in the cost of the property. The Partnership also reimbursed
Rahn for various expenses incurred in performing these services including the
renovation management and administrative staff salaries, telephone, utilities
and postage. Reimbursements totaling $9,955 and $9,862 in 1995 and 1994,
respectively, are also reflected in the cost of the property. No such fees or
reimbursements were made in 1996. Included in accounts payable at December 31,
1995 are amounts due to Rahn of $8,576. No such amounts were payable at December
31, 1996.
F-50
<PAGE> 189
RAHN BAHIA MAR, LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The Partnership has a management agreement with Rahn Bahia Mar Mgmt., Inc.
("Rahn Management") for a period of ten years ending June 30, 2004. The
agreement requires a management fee of three percent of gross revenues, as
defined in the management agreement, during the first eighteen months of the
agreement and a two percent fee for 1996 and thereafter. Management fees paid to
Rahn Management totaled $321,193, $405,261 and $141,298 in 1996, 1995 and 1994,
respectively.
The management agreement requires Rahn Management to set aside cash from
Hotel operations for the purchase, replacement and renewal of furniture,
fixtures and equipment and non-routine repairs and maintenance to the building.
The amount to be restricted is three percent of the Hotel's gross revenues each
month during the term of the agreement. All cash was spent on its required
purpose at December 31, 1996.
Fees paid to Radisson pursuant to the license agreement with Radisson (see
Note 1) totaled $206,438 $107,127, and $13,395, in 1996, 1995 and 1994,
respectively.
(5) LONG-TERM DEBT:
Long-term debt consists of a $15,495,000 mortgage note payable to a bank.
The note bears interest at a variable rate as defined by the agreement (8.8125
percent at December 31, 1996) and is collateralized by substantially all
property and equipment. In addition to the monthly interest payments, the note
has monthly principal installments of $45,000 commencing in February 1995. The
principal payments increased to $55,000 in August 1995 and $65,000 in August
1996. The maturity date for the note is June 30, 1997, but may be extended under
a one year extension option. During the extension period, the monthly principal
installments will increase to $75,000, the interest rate will increase by 1
percent and an extension fee equal to .0025 percent of the then outstanding
balance will be due prior to the extension. The final balloon payment would then
be due June 30, 1998.
Capitalized interest paid in 1994 and included in the cost of the property
is $53,414. Effective February 1, 1995, and continuing on the first day of each
month thereafter during the term of the note, the note agreement requires the
Partnership to set aside cash for the purchase, replacement and upgrade of
furniture, fixtures, equipment and property in the amount of $25,000 each month.
All cash was spent on its required purpose at December 31, 1996.
(6) PROPERTY AND EQUIPMENT:
Property and equipment consists of the following:
<TABLE>
<CAPTION>
1996 1995
-------------------- --------------------
<S> <C> <C>
Land and improvements............................. $ 8,202,702 $ 8,127,597
Buildings and improvements........................ 18,149,511 17,798,505
Furnishings and equipment......................... 6,779,921 6,338,365
Operating equipment............................... 86,852 122,043
----------- -----------
33,218,986 32,386,510
Less: Accumulated depreciation.................... (4,311,773) (2,381,116)
----------- -----------
$28,907,213 $30,005,394
=========== ===========
</TABLE>
(7) COMMITMENTS AND CONTINGENCIES:
The Partnership leases the Resort site under an operating lease which had a
term through September 30, 2037. On January 4, 1995, the term of this lease was
extended for an additional period commencing October 1, 2037 through August 31,
2062 (the "Second Extended Term"). Under the lease agreement, the Partnership is
required to pay the lessor an annual rental (payable in quarterly installments)
equal to the greater of a
F-51
<PAGE> 190
RAHN BAHIA MAR, LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
percentage (4 percent through September 30, 2012 and 4.25 percent thereafter) of
the annual gross operating revenue, as defined in the lease agreement, or a
minimum annual rent payment. Minimum lease payments were $150,000 a year through
September 30, 1995; effective October 1, 1995 the minimum annual rent is
$300,000 payable in quarterly installments. During the Second Extended Term, the
minimum annual rent shall be the greater of $300,000 or eighty percent of the
average total annual rent paid during the three lease years immediately
preceding the lease year for which the minimum annual rent is being calculated.
Rent expense under the lease totaled $632,907 and $510,956 for the years ended
December 31, 1996 and 1995, respectively, and $174,174 for the period from
inception (June 28, 1994) to December 31, 1994.
Effective October 1, 1995 and continuing annually for the remaining term of
the lease, the lease agreement requires the Partnership to set aside cash for
the purchase, replacement and upgrade of furniture, fixtures and equipment. The
amount to be restricted is three percent of the Resort's revenues, as defined in
the lease agreement. All cash was spent on its required purpose at December 31,
1996.
The Hotel also leases certain equipment used in its operations under
operating leases. Future minimum lease payments, including the property lease
and operating leases, are as follows:
<TABLE>
<S> <C>
1997............................................ $ 407,080
1998............................................ 406,137
1999............................................ 391,241
2000............................................ 343,784
2001............................................ 304,126
Thereafter...................................... 18,200,000
-----------
$20,052,368
===========
</TABLE>
(8) DEFERRED COMPENSATION PLAN:
Effective July 1, 1995, Rahn Management offered its employees a
multi-employer deferred compensation plan (the "Plan") created in accordance
with Internal Revenue Code Section 401(k). The Plan is available to all
employees with a minimum of 21 years of age and one year of service. All of the
costs are reimbursed by the Partnership.
The Plan's participants may contribute from 1 percent to 14 percent of
their compensation during the Plan year. Rahn Management matched 25 percent of
the first 4 percent contributed by each Plan participant, prior to January 1,
1996. Effective January 1, 1996, Rahn Management matches 25 percent of the first
six percent contributed by each Plan participant. Rahn Management contributed
$16,002 and $9,721 to the Plan in 1996 and 1995, respectively.
(9) EXCHANGE AGREEMENT:
On December 22, 1996, the Partnership entered into a definitive exchange
agreement with Florida Panthers Holdings, Inc. ("Holdings"), whereby Holdings
will acquire the Partnership in exchange for 3,950,000 shares of Holdings' Class
A common stock. The transaction is subject to the approval of Holdings'
shareholders and, as of January 10, 1997, had not been finalized.
F-52
<PAGE> 191
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Partners of
Boca Raton Hotel and Club Limited Partnership
In our opinion, the accompanying balance sheet and the related statements
of operations, of changes in partners' deficit and of cash flows present fairly,
in all material respects, the financial position of Boca Raton Hotel and Club
Limited Partnership at December 31, 1996, and the results of its operations and
its cash flows for the year in conformity with generally accepted accounting
principles. These financial statements are the responsibility of the
Partnership's management; our responsibility is to express an opinion on these
financial statements based on our audit. We conducted our audit of these
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Fort Lauderdale, Florida
January 29, 1997, except as to Note 12, which is
as of March 20, 1997
F-53
<PAGE> 192
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Partners
Boca Raton Hotel and Club Limited Partnership
We have audited the accompanying balance sheet of the Boca Raton Hotel and
Club Limited Partnership (A Limited Partnership) (the Partnership) as of
December 31, 1995, and the related statements of operations, changes in
partners' deficit and cash flows for each of the two years in the period ended
December 31, 1995. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of the Boca Raton Hotel and
Club Limited Partnership (A Limited Partnership) at December 31, 1995, and the
results of its operations and its cash flows for each of the two years in the
period ended December 31, 1995, in conformity with generally accepted accounting
principles.
Ernst & Young LLP
West Palm Beach, Florida
January 26, 1996
F-54
<PAGE> 193
BOCA RATON HOTEL AND CLUB LIMITED PARTNERSHIP
BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31,
-------------------
1996 1995
-------- --------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................. $ 1,126 $ 2,887
Restricted cash and short-term investments................ 18,887 13,671
Accounts receivable, net of allowance for doubtful
accounts of $412 and $50, respectively, in 1996 and
1995................................................... 12,203 12,249
Current portion of Premier Club promissory notes for
membership deposits.................................... 3,840 3,161
Other current assets...................................... 727 705
Prepaid insurance......................................... 1,697 2,074
Inventories............................................... 5,725 5,752
-------- --------
Total current assets.............................. 44,205 40,499
Premier Club promissory notes for membership deposits, less
current portion........................................... 8,246 6,964
Property and improvements:
Land...................................................... 26,851 26,851
Buildings and improvements................................ 114,199 103,354
Furnishings and equipment................................. 20,407 19,934
Construction in progress.................................. 6,750 4,199
-------- --------
168,207 154,338
Less accumulated depreciation............................. (52,479) (49,914)
-------- --------
115,728 104,424
Deferred loan costs and other, net.......................... 10,080 6,546
-------- --------
$178,259 $158,433
======== ========
LIABILITIES AND PARTNERS' DEFICIT
Current liabilities:
Accounts payable, trade................................... $ 4,490 $ 7,289
Advance deposits.......................................... 3,027 3,118
Accrued interest payable.................................. 3,296 2,559
Accrued payroll costs and employee benefits............... 3,015 3,108
Due to general partner.................................... 3,725 5,900
Other accounts payable and accrued expenses............... 6,102 5,654
Deferred membership revenue............................... 7,232 6,371
Current portion of mortgage and other loans payable....... 400 2,347
-------- --------
Total current liabilities......................... 31,287 36,346
Mortgage and other loans payable, less current portion...... 174,800 140,889
Accrued settlement costs.................................... 500 950
Premier Club membership deposits and credits, net........... 55,905 49,717
Partners' deficit:
General Partner........................................... (2,492) (2,249)
Class A Limited Partners.................................. (80,067) (65,892)
Class B Limited Partner................................... (1,674) (1,328)
-------- --------
Total Partners' deficit........................... (84,233) (69,469)
-------- --------
$178,259 $158,433
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-55
<PAGE> 194
BOCA RATON HOTEL AND CLUB LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
(IN THOUSANDS)
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
---------------------------------
1996 1995 1994
--------- --------- ---------
<S> <C> <C> <C>
Revenue:
Rooms..................................................... $ 44,856 $ 44,050 $ 41,191
Food and beverage......................................... 34,762 32,764 32,841
Club Membership, Retail and Other......................... 34,109 31,376 29,339
-------- -------- --------
Total revenue..................................... 113,727 108,190 103,371
Costs and expenses:
Rooms..................................................... 10,913 10,228 10,038
Food and beverage......................................... 26,363 24,814 25,136
Club Membership, Retail and Other......................... 19,005 17,569 17,103
Selling, general and administrative....................... 17,999 16,679 19,498
Property operations, maintenance and energy costs......... 10,959 11,125 9,604
Other indirect costs........................................ 8,911 8,041 6,799
-------- -------- --------
Total cost of revenues...................................... 94,150 88,456 88,178
Depreciation and amortization............................... 6,215 6,623 7,108
-------- -------- --------
Income from operations...................................... 13,362 13,111 8,085
Interest expense, net....................................... 16,562 14,909 17,382
-------- -------- --------
Loss before extraordinary item.............................. (3,200) (1,798) (9,297)
Extraordinary items:
Net gain on debt restructuring............................ -- 10,328 6,704
Net (loss) on debt restructuring, including debt
prepayment penalty of ($3,515)......................... (8,932) -- --
-------- -------- --------
Net (loss) income........................................... $(12,132) $ 8,530 $ (2,593)
======== ======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-56
<PAGE> 195
BOCA RATON HOTEL AND CLUB LIMITED PARTNERSHIP
STATEMENTS OF CHANGES IN PARTNERS' DEFICIT
(IN THOUSANDS)
<TABLE>
<CAPTION>
CLASS A CLASS B
GENERAL LIMITED LIMITED
PARTNER PARTNERS PARTNER TOTAL
------- -------- ------- --------
<S> <C> <C> <C> <C>
Partners' deficit at January 1, 1994.................... $(2,368) $(71,606) $(1,432) $(75,406)
Net loss.............................................. (52) (2,495) (46) (2,593)
------- -------- ------- --------
Partners' deficit at December 31, 1994.................. (2,420) (74,101) (1,478) (77,999)
Net income............................................ 171 8,209 150 8,530
------- -------- ------- --------
Partners' deficit at December 31, 1995.................. (2,249) (65,892) (1,328) (69,469)
Distribution.......................................... -- (2,500) (132) (2,632)
Net loss.............................................. (243) (11,675) (214) (12,132)
------- -------- ------- --------
Partners' deficit at December 31, 1996.................. $(2,492) $(80,067) $(1,674) $(84,233)
======= ======== ======= ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-57
<PAGE> 196
BOCA RATON HOTEL AND CLUB LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
----------------------------------
1996 1995 1994
---------- --------- ---------
<S> <C> <C> <C>
Operating activities:
Net income (loss)......................................... $ (12,132) $ 8,530 $ (2,593)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization.......................... 6,935 6,623 7,108
Loss (gain) on debt restructuring...................... 5,417 (10,328) (6,704)
Provision for settlement agreements.................... 300 -- 1,250
Changes in operating assets and liabilities:
Accounts receivable.................................. (1,915) (2,193) (1,955)
Prepaid expenses and other assets.................... 354 1,146 (4,105)
Inventories.......................................... 27 (227) 703
Accounts payable, trade.............................. (2,799) 1,998 1,265
Advance deposits..................................... (91) 32 (210)
Accrued interest payable............................. 737 197 4,682
Accrued payroll costs and employee benefits.......... (93) (385) 898
Other accounts payable and accrued expenses.......... (4,184) 1,669 1,569
Deferred membership revenue.......................... 861 325 535
Premier Club Membership cash and note payments....... 6,049 3,987 5,770
Accrued settlement costs............................. (750) -- --
--------- -------- --------
Net cash provided by (used in) operating
activities........................................ (1,284) 11,374 8,213
--------- -------- --------
Investing activities:
Restricted cash and short-term investments................ (5,216) (10,964) 1,124
Additions to property and improvements.................... (14,829) (4,601) (3,454)
Additions to construction in progress..................... (2,551) -- --
--------- -------- --------
Net cash used in investing activities................ (22,596) (15,565) (2,330)
--------- -------- --------
Financing activities:
Proceeds from increase in mortgage and other loans
payable................................................ 155,000 60,000 48,583
Principal payments of mortgage and other loans payable.... (123,036) (54,313) (48,071)
Principal payment on Banyan mortgage loans................ -- (3,500) (1,000)
Payment of financing costs................................ (7,345) (725) --
Distributions to Limited Partners......................... (2,500) -- --
--------- -------- --------
Net cash (used in) provided by financing
activities........................................ 22,119 1,462 (488)
--------- -------- --------
Net increase (decrease) in cash and cash equivalents........ (1,761) (2,729) 5,395
Cash and cash equivalents at beginning of year.............. 2,887 5,616 221
--------- -------- --------
Cash and cash equivalents at end of year.................... $ 1,126 $ 2,887 $ 5,616
========= ======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the year for interest...................... $ 14,148 $ 14,710 $ 12,633
========= ======== ========
Accrual of distribution payable to Class B Limited
Partners.................................................. $ 132 $ -- $ --
========= ======== ========
Accrual of General Partner Fees............................. $ 2,325 $ -- $ --
========= ======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-58
<PAGE> 197
BOCA RATON HOTEL AND CLUB LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 (IN THOUSANDS OF DOLLARS)
1. ORGANIZATION
The Boca Raton Hotel and Club Limited Partnership (the Partnership) was
formed in June 1983 under the laws of the State of Florida. The purpose of the
Partnership is to purchase, own, manage and operate the Boca Raton Resort and
Club, a 298-acre resort complex containing several hotel facilities with a total
of 963 guest rooms. In addition, the complex includes 31 tennis courts, 2 golf
courses, marina, beach club and other recreational facilities. Included within
the resort is the Boca Golf and Tennis Country Club (a separate facility) (see
Note 6). The Partnership also leases the food and beverage concessions, and has
contracted for golf access at the Deer Creek and Carolina country clubs.
As of January 15, 1993, the original general partner, VMS Realty Investment
Ltd. (VMSRIL), withdrew from the Partnership as general partner and was replaced
by the Boca Raton Management Company, a New York general partnership (BRMC/NY).
BRMC/NY was succeeded as general partner on October 1, 1993 by BRMC, L.P., a
Delaware limited partnership (BRMC) (see Note 3).
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A summary of the significant accounting principles and practices used in
the preparation of the financial statements follows:
BASIS OF FINANCIAL STATEMENT PRESENTATION
The Partnership prepares its financial statements in conformity with
generally accepted accounting principles. These principles require management to
(1) make estimates and assumptions that affect the reported amounts of assets
and liabilities, (2) disclose contingent assets and liabilities at the date of
the financial statements and (3) report amounts of revenue and expenses during
the reporting period. Actual results could differ from these estimates.
CASH EQUIVALENTS AND RESTRICTED CASH
The Partnership considers all highly liquid investments with a maturity of
three months or less from the date purchased to be cash equivalents. Restricted
cash consists principally of escrow accounts restricted as to use and maintained
in accordance with the terms of the Partnership's First Mortgage Notes. Short
term investments consist primarily of repurchase agreements.
FAIR VALUES OF FINANCIAL INSTRUMENTS
At December 31, 1996 and 1995, the carrying amounts of cash, cash
equivalents and short-term investments approximate their fair value due to their
short duration to maturity. The carrying amount of the mortgages and other loans
approximate their fair value.
CONCENTRATIONS OF CREDIT RISK AND MARKET RISK
Concentration of credit risk and market risk associated with cash, cash
equivalents, restricted cash and short-term investments are considered low due
to the credit quality of the issuers of the financial instruments held by the
Partnership and due to their short duration to maturity. Accounts receivable are
primarily from major credit card companies and other large corporations. The
Partnership performs ongoing credit evaluations of its significant customers and
generally does not require collateral.
PREMIER CLUB MEMBERSHIP DEPOSITS
The Partnership classifies premier club membership deposits as an operating
activity in the Statement of Cash Flows (see Note 10).
F-59
<PAGE> 198
BOCA RATON HOTEL AND CLUB LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (IN THOUSANDS OF DOLLARS) -- (CONTINUED)
PROPERTY, IMPROVEMENTS AND DEPRECIATION
Property and improvements are stated at cost and are depreciated on the
straight-line method over the estimated useful lives of the assets as follows:
<TABLE>
<S> <C>
Buildings and improvements.............................. 15 - 30 years
Furnishings and equipment............................... 3 - 10 years
</TABLE>
Provision for value impairments are recorded with respect to such assets
whenever the estimated future cash flows from operations and projected sales
proceeds are less than the net carrying value. The Partnership implemented
Statements on Financial Accounting Standards (FAS) No. 121, Accounting for
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of,
effective January 1, 1996. The implementation of FAS No. 121 did not have a
material impact on the financial statements. Costs of major renewals and
improvements which extend useful lives are capitalized. Expenditures for
maintenance and repairs are charged to expense as incurred.
INVENTORIES
Inventories consisting of food, beverage and operating supplies are
determined using the first-in, first-out method and are stated at the lower of
cost or market.
DEFERRED LOAN COSTS
Deferred loan costs, primarily loan origination and related fees, are
capitalized and amortized on the straight-line basis over the terms of the
respective debt, which approximates the effective interest method. Deferred loan
costs are presented net of accumulated amortization. At December 31, 1996 and
1995, accumulated amortization totaled $643 and $1,320, respectively.
DEFERRED MEMBERSHIP REVENUE
Deferred membership revenue is recognized as income ratably over the
membership year commencing October 1.
RECLASSIFICATIONS
Certain items for 1994 and 1995 have been reclassified to conform to the
1996 presentation.
PARTNERSHIP RECORDS
The Partnership's records are maintained on the accrual basis of accounting
as adjusted for federal income tax reporting purposes. The accompanying
financial statements have been prepared from such records after making
adjustments, where applicable, to reflect the Partnership's accounts in
accordance with generally accepted accounting principles (GAAP). The net effect
of these items is summarized as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------------------
1996 1995
-------------------- -------------------
GAAP TAX GAAP TAX
BASIS BASIS BASIS BASIS
--------- -------- -------- --------
<S> <C> <C> <C> <C>
Total assets................................. $ 178,259 $153,248 $158,433 $133,290
Partners' deficits:
General Partner............................ (2,492) (3,127) (2,249) (2,834)
Class A Limited Partners................... (80,067) (102,207) (65,892) (85,631)
Class B Limited Partner.................... (1,674) (1,964) (1,328) (1,706)
</TABLE>
F-60
<PAGE> 199
BOCA RATON HOTEL AND CLUB LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (IN THOUSANDS OF DOLLARS) -- (CONTINUED)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------------------
1996 1995 1994
------------------- --------------- -----------------
GAAP TAX GAAP TAX GAAP TAX
BASIS BASIS BASIS BASIS BASIS BASIS
-------- -------- ------ ------ ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net income (loss):
General Partner................ $ (243) $ (293) $ 171 $ 182 $ (52) $ (163)
Class A Limited Partners....... (11,675) (14,076) 8,209 8,767 (2,495) (7,835)
Class B Limited Partner........ (214) (258) 150 161 (46) (144)
</TABLE>
INCOME TAXES
No provision has been recorded for income taxes or related credits in the
Partnership's financial statements as the results of operations are includable
in the income tax returns of the partners. The differences between financial
statement income or loss and tax income or loss relate primarily to the methods
and lives used to depreciate fixed assets, the treatment of costs of the Premier
Membership Program, the treatment of syndication costs and the treatment of the
1994, 1995 and 1996 debt restructurings.
3. PARTNERSHIP AGREEMENT
Operating profits and losses of the Partnership are allocated pursuant to
the terms of the partnership agreement or in accordance with Internal Revenue
Code Section 704(b). Profits and losses attributable to capital items such as a
sale or refinancing are allocated among the partners in accordance with the
Partnership agreement.
Distributions of cash flows are made, subject to the participation therein
of BRMC, as follows: (a) first, to the Limited Partners in an amount equal to
12% per annum (on a non-cumulative basis) of their aggregate capital
contributions (95% to Class A and 5% to Class B); (b) then, to BRMC, the payment
of a subordinated incentive fee, as defined in the Partnership Agreement; and
(c) then, of the balance, 98% to the Limited Partners (93.1% to Class A and 4.9%
to Class B) and 2% to BRMC.
Distributions of capital items are made as follows: (a) first, 100% to the
Limited Partners until such time as each Limited Partner has received
distributions sufficient to reduce their aggregate capital contribution to zero;
(b) then, 100% to BRMC until such time as BRMC has received distributions
sufficient to reduce its aggregate capital contributions to zero; (c) then, to
the Class A Limited Partners to the extent not previously paid from Cash Flow an
amount equal to: 10% per annum of their aggregate capital contributions (on a
cumulative basis from January 1, 1984); (d) then, first to the Limited Partners,
90% (85.5% to Class A and 4.5% to Class B) of the next $16,000 and then 10% of
such $16,000 to BRMC; and (3) then, 70% to the Limited Partners (66.5% to Class
A and 3.5% to Class B) and 30% to BRMC.
In 1996, the Partnership made capital distributions totaling $2,500 to the
Class A Limited Partners and accrued $132 for distributions to the Class B
Limited Partners.
The Partnership relies on mortgages and other loans to fund capital
improvements and construction projects. The Partnership expects to meet its cash
requirements through operations and the use of existing cash balances.
As general partner, BRMC is entitled to receive the following forms of
compensation and additional distributions (General Partner Compensation):
1. A supervisory management fee, the lesser of (a) $50 per month and
(b) 90% of the hypothetical supervisory fee formerly payable to an
affiliate of VMSRIL (see Note 8).
2. A debt restructuring fee with existing creditors, .5% of the
principal amount of the Partnership's indebtedness restructured (see Note
8).
F-61
<PAGE> 200
BOCA RATON HOTEL AND CLUB LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (IN THOUSANDS OF DOLLARS) -- (CONTINUED)
3. A debt or equity capital raising fee, 1.5% of the amount raised. To
the extent any capital raised is applied to repay indebtedness, no debt
restructuring fee referred to in 2 above shall be payable with respect to
the portion of the indebtedness for which a capital raising fee is charged
(see Note 8).
4. A debt reduction fee, 10% of the principal amount of the debt
extinguished. BRMC would receive 20% of its debt reduction fee at the
closing of the debt reduction transaction, with the balance paid from (a)
any excess proceeds from the refinancing of such debt, and (b) any
distributions resulting from any sale or refinancing as a preference to the
Limited Partners' distributions thereunder (see Note 8).
5. A participation in cash distributions, BRMC will receive the
following distributions:
<TABLE>
<CAPTION>
BRMC
CUMULATIVE AMOUNT DISTRIBUTED PERCENTAGE
- ----------------------------- ----------
<S> <C> <C>
First $10,000.................................................. 1%
Next $10,000.................................................. 2
Next $10,000.................................................. 3
Next $10,000.................................................. 4
Next $10,000.................................................. 5
Over $50,000.................................................. 10
</TABLE>
In the event the Limited Partners are diluted in connection with any
offering of new Partnership equity, the distribution breakpoints (DBP)
in the above table will be adjusted in accordance with the following
formula: DBP divided by that percentage of the Partnership's equity
owned by the existing Limited Partners upon completion of the financing.
Notwithstanding any of the foregoing, BRMC shall receive a total share
of such distributions of not less than $500. Such minimum shall not
apply in the event that the Limited Partners' cumulative distributions
have not exceeded Limited Partners' taxes due thereon.
6. The foregoing elements set forth in preceding subparagraphs 2, 3, 4
and 5 are limited by the provisions of the first mortgage notes (see Note
5).
4. LETTERS OF CREDIT
As of December 31, 1996 and 1995, the Partnership has two letters of credit
which secure two operating leases. The letters of credit are collateralized by
certificates of deposit totaling $500 which mature in August 1997 and are
included in restricted cash and short-term investments.
F-62
<PAGE> 201
BOCA RATON HOTEL AND CLUB LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (IN THOUSANDS OF DOLLARS) -- (CONTINUED)
5. MORTGAGES AND OTHER LOANS PAYABLE
Various refinancing activities occurred in 1996 and can be summarized as
follows:
<TABLE>
<CAPTION>
(IN THOUSANDS)
TOTAL
OUTSTANDING 1996 OUTSTANDING
BALANCE AT PRINCIPAL 1996 DEBT AT
LOAN DESCRIPTION, INTEREST RATE DECEMBER 31, 1995 PAYMENTS NEW DEBT DECEMBER 31, 1996
- ------------------------------- ----------------- --------- -------- -----------------
<S> <C> <C> <C> <C>
Nomura-$75,000..................... $ 71,524 $ 71,524 $ -0-
Starwood-$50,000................... 51,000 51,000 -0-
Starwood-$500 -- 14 1/2%........... 500 500
RMA -- 7%.......................... 10,000 300 9,700
Senior Facility, LIBOR + 2 1/4%.... 110,000 110,000
Subordinate Facility, 13%.......... 20,000 20,000
Starwood-$35,000, 18.5%............ 10,000 25,000 35,000
Other.............................. 212 212 -0-
-------- -------- -------- --------
$143,236 $123,036 $155,000 $175,200
======== ======== ======== ========
</TABLE>
FIRST MORTGAGE NOTES
On August 22, 1996, the Partnership entered into an agreement with a
consortium of financial institutions to borrow $130,000 primarily for the
purpose of refinancing existing first mortgage notes. The agreement consists of
a $110,000 Senior Facility (Senior Notes) and a $20,000 Subordinate Facility
(Subordinate Notes). Both Facilities mature on August 22, 2001 and accrue
interest, based on a 360 day year, payable monthly in arrears. The Senior Notes
accrue interest at the lenders' base rate plus one-quarter percent (Base Rate)
or LIBOR plus two and one-quarter percent (LIBOR Rate). In 1996, the Partnership
selected the LIBOR Rate, averaging approximately 7.814%. The Subordinate Notes
accrue interest at a fixed rate of thirteen percent. Both Facilities are secured
by a first mortgage and lien on all assets held by the Partnership, except in
certain circumstances where other first liens are permitted. The outstanding
balance on the First Mortgage Notes at December 31, 1996 totaled $130,000.
The Partnership is required to make quarterly principal payments of $750 on
the Senior Notes commencing September 30, 1998 and increasing to $1,250 on
September 30, 1999 and to $1,750 on September 30, 2000. The Partnership is
required to make additional principal payments on the Senior Notes and initial
principal payments on the Subordinate Notes based upon certain cash flow
conditions.
In accordance with the agreement, the Partnership deposits cash into
reserve accounts which are accumulated and restricted to support future debt
service, facility expansion, fixed asset replacement and real estate tax
payments. Both Facilities contain significant restrictions with respect to
payments to Partners and other debt holders.
In conjunction with the refinancing, the Partnership recorded a loss on
debt restructuring of $5,417 which represents the write off of debt issue costs.
The Partnership paid a loan prepayment penalty of $3,515 to Nomura.
SECOND MORTGAGE NOTE
On August 22, 1996, the Partnership entered into an agreement with an
institutional lender to borrow $35,000, as evidenced by a promissory note,
primarily for the purpose of the planned expansion of the Resort. The note is
secured by a second mortgage and lien on all assets held by the Partnership,
except in certain circumstances where other liens are permitted. At maturity,
August 21, 2003, or prepayment of the note, the Partnership is required to pay
an amount which will result in an annual internal rate of return to the lender
of
F-63
<PAGE> 202
BOCA RATON HOTEL AND CLUB LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (IN THOUSANDS OF DOLLARS) -- (CONTINUED)
eighteen and one-half percent (18.5%). Interest is payable quarterly in arrears
commencing October 1, 1996 at a rate of eight percent through December 31, 1998
and fourteen and one-half percent thereafter based on a 360 day year. The
Partnership accrues interest at 18.5% per annum. Additional interest and
principal payments are required based on certain cash flow conditions. The
outstanding balance on the Second Mortgage Note totaled $35,000 at December 31,
1996.
The Partnership may not prepay the note prior to its third anniversary
except in connection with a sale of Partnership assets to a third party. If
prepayment occurs before August 23, 2001, the Partnership is required to pay an
amount (Prepayment Amount) which would result in an 18.5% internal rate of
return to the lender through that date. The Prepayment Amount will be reduced by
the return which would result from the lenders' reinvestment of the repaid
principal at the United States Treasury Notes rate plus 250 basis points, if
prepayment results from sale of Partnership assets or from cash flow; or plus
150 basis points, if prepayment results from refinancing the note or sale or
issuance of any ownership interest in the Partnership.
THIRD MORTGAGE NOTE
On August 22, 1996, a note payable, which was previously secured by a first
mortgage, was replaced with a third mortgage and lien on all assets of the
Partnership. The note matures on September 30, 2003 and accrues interest at a
fixed rate of approximately 14.52% through September 30, 1998 and at a variable
rate thereafter payable quarterly in arrears. The outstanding balance on the
Third Mortgage Note at December 31, 1996 totaled $500.
The Partnership is required to make an additional payment (Final
Participation Interest) upon maturity of the loan or sale of the Partnership's
assets equaling the sum of $750, plus 5% of the Partnership's net asset value as
calculated based on certain criteria. In the event of refinancing of the
property, the Partnership is required to make a payment of 5% of the net
proceeds (Interim Participation Interest). Interim Participation Interest paid
will be deducted from the Final Participation Interest amount. In 1996, the
Partnership paid $125 of Interim Participation Interest.
OTHER NOTES PAYABLE
The Partnership's other notes payable represent two unsecured promissory
notes with original amounts of $8,000 and $2,000 dated October 7, 1994 related
to a settlement agreement whereby the Partnership terminated a 20-year
management agreement. Both promissory notes mature on October 7, 2004 and accrue
interest at a rate of 7% payable semi-annually in arrears.
The $8,000 promissory note requires future principal reductions of $320 on
October 7, 1997 and $400 on each October 7 from 1998 to 2003, with a balloon
payment of $5,040 due at maturity. The $2,000 promissory note payable requires
future principal reductions of $80 on October 7, 1997 and $100 on each October
7, from 1998 to 2003, with a balloon payment of $1,260 due at maturity. The
notes include limitations on additional senior debt.
At December 31, 1996, aggregate future maturities of mortgage and other
loans payable are as follows:
<TABLE>
<S> <C>
1997........................................................ $ 400
1998........................................................ 2,000
1999........................................................ 4,500
2000........................................................ 6,500
2001........................................................ 119,000
Thereafter.................................................. 42,800
--------
$175,200
========
</TABLE>
F-64
<PAGE> 203
BOCA RATON HOTEL AND CLUB LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (IN THOUSANDS OF DOLLARS) -- (CONTINUED)
The following schedule reflects the mortgage and loan payable balances as
of December 31, 1995. Senior and subordinated notes were refinanced during 1996,
as disclosed above:
<TABLE>
<CAPTION>
1995
--------
<S> <C>
A senior note secured by the $130,000 first mortgage on
the principal resort property, improvements and all
assets and rights of the Partnership accruing interest
at 8.26%. The Partnership may pay the loan in whole or
in part at any time by paying a prepayment fee based on
a formula. $ 71,524
A subordinated note secured by the $130,000 first mortgage
on the principal resort property, improvements, and all
assets and rights of the Partnership accruing interest
at 14.52%. The balance at December 31, 1995 includes a
fee of $1,000 due upon payoff of the note. The loan has
a term of eight years and no amortization period [see
(b) and (d) below]. 51,000
A subordinated note secured by the $130,000 first mortgage
on the principal resort property, improvements and all
assets and rights of the Partnership accruing interest
at 14.52%. The note contains a provision whereby the
lender upon the sale or refinancing of the Partnership,
or substantially all of its assets, is entitled to an
amount based on a certain formula [see (a) below]. 500
Other loans payable:
A promissory note bearing interest at 14.5% per annum,
payable quarterly commencing April 1, 1996. The note is
collateralized by the notes receivable due from club
members for the Premier Membership Program at December
15, 1995 and additions thereafter (see Note 10). The
loan matures on December 15, 2002, at which time all
principal and any accrued unpaid interest is due. The
principal amount due at maturity of the note includes
an amount, in addition to principal and accrued
interest, sufficient to provide the lender an internal
rate of return of 18.5% per annum. [see (c) below]. 10,000
An unsecured promissory note dated October 7, 1994 with
interest at 7% per annum. The first interest payment is
due October 7, 1995, with subsequent payments of
interest due semiannually commencing April 1, 1996.
Principal payments commence October 7, 1996 in the
amount of $240 increasing to $400 in the year 2003 with
a balloon payment of $5,040 due October 7, 2004. 8,000
An unsecured promissory note dated October 7, 1994 with
interest at 7% per annum. The first interest payment is
due October 7, 1995, with subsequent payments of
interest due semiannually commencing April 1, 1996.
Principal payments commence October 7, 1996 in the
amount of $60 increasing to $100 in the year 2003 with
a balloon payment of $1,260 due October 7, 2004. 2,000
An unsecured promissory note dated October 7, 1994 with
interest at 7% per annum. Annual principal payments of
$100 plus interest commence October 7, 1995. 100
A note payable dated March 31, 1991 for $600 to fund the
redevelopment and renovation of a resort restaurant.
Principal and interest payments are made monthly over a
five-year term at an interest rate of prime plus 2.5%
(11.0% at December 31, 1995). 112
--------
143,236
Current portion of mortgage and other loans payable (2,347)
--------
$140,889
========
</TABLE>
- ---------------
(a) On October 11, 1994, the Partnership exercised its call option (the "1994
Refinancing") and paid $45,086 to reduce the then outstanding principal
balance of $55,000 on this subordinated note to $500,
F-65
<PAGE> 204
BOCA RATON HOTEL AND CLUB LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (IN THOUSANDS OF DOLLARS) -- (CONTINUED)
resulting in a gain on debt restructuring of $6,704, net of $2,710 in
capitalized costs on the repaid subordinated note which were written off as
a result of the restructuring.
Also on October 11, 1994, the Partnership entered into a $48,500
subordinated note agreement with a new lender. The proceeds of the note
were reduced by a $1,000 commitment fee and used to make the $45,086
payment described above and to pay accrued interest of $216 on the repaid
subordinated note, resulting in net cash proceeds of $2,198.
(b) The Partnership's subordinated note in the original principal amount of
$48,500 was retired on September 29, 1995 (the "1995 Refinancing"). The
total principal and interest owed to the Lender under the note was $50,241.
An additional Payoff Premium of $1,500 was also owed to the Lender under
the note. The Partnership made a cash payment of $1,741 to the Lender for
accrued interest at September 29, 1995 and refinanced $50,000 with the
issuance of a $50,000 subordinated note. As a result of the 1995
Refinancing, approximately $1,696 in deferred loan costs were written off
resulting in a loss on extinguishment of debt of said amount.
In connection with the 1995 Refinancing, the Partnership paid $389 in
closing costs and legal fees. These loan costs were capitalized and are
being amortized on a straight line basis over the term of the loan.
(c) On December 15, 1995, the Partnership entered into a $10,000 promissory
note, the proceeds of which were deposited into an escrow account. The
balance in the escrow account at December 31, 1995 is $9,864 and is
included in restricted cash and short-term investments in the accompanying
balance sheet. The proceeds of the note are to be used for the construction
of certain hotel property.
The Note is prepayable at any time, provided that any prepayments made
prior to December 15, 2000 require a prepayment fee sufficient to provide
the holder an internal rate of return of 16% per annum through December 15,
2000 based upon a yield maintenance formula.
(d) The note calls for $1,000 fee due upon payoff. This fee is being accreted
over the life of the loan. At December 31, 1995, included in deferred loan
costs is approximately $968, which represents the $1,000 fee less
accumulated accretion of $32.
Under the terms of the senior and subordinated mortgage notes described
above, certain amounts are required to be deposited in an escrow account for the
purposes of paying personal and real property taxes. The balance in the personal
and real property taxes account was $853 at December 31, 1995. The terms of
these mortgages also require funds to be escrowed for capital repairs and
replacements to the resort. The balance in the capital repair and replacement
escrow account was $2,148 at December 31, 1995.
The mortgage loan agreements include certain restrictive covenants
including, among other things, the maintenance of a senior debt service ratio,
as defined, of 1.75 to 1 and a subordinate debt service coverage ratio, as
defined, of 1.2 to 1, restrictions on general and limited partner distributions
and limitations on the incurrence of new debt.
6. BANYAN MORTGAGE LOANS
The Banyan mortgage loans consisted of three matured first mortgage loans
collateralized by certain land (the Marina Parcel) and the Boca Golf and Tennis
Country Club. At December 31, 1994, the mortgage loans had principal balances of
$8,100, $10,354 and $2,031 and accrued interest totaled $4,388. During 1994 and
1995, no principal payments were made, other than as described below, and, in
accordance with the terms of the agreements, interest totaling $2,419 was
incurred in 1994.
On December 29, 1994 (the Settlement Date), the Partnership entered into a
settlement agreement which called for the following: (1) a payment of $1,000,
which was made on November 29, 1994, and applied against outstanding principal;
(2) a payment to be made of $3,500, plus interest accrued from the Settlement
Date to the date of payment, to release the Boca Golf and Tennis Country Club
from the mortgage loans; and (3) a foreclosure sale on the Marina Parcel, to be
held subsequent to December 31, 1994.
F-66
<PAGE> 205
BOCA RATON HOTEL AND CLUB LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (IN THOUSANDS OF DOLLARS) -- (CONTINUED)
On January 17, 1995, the Partnership made the $3,500 payment, plus accrued
interest of $18, and on January 26, 1995, a foreclosure sale was held and the
lender obtained ownership of the Marina Parcel.
The settlement is deemed to have occurred at the time the $3,500 payment
was made and the foreclosure sale was held. Accordingly, in 1995, the
Partnership recognized a net gain of $12,024 consisting of $21,373 in
forgiveness of principal and interest offset by a write-off of $9,349
representing the carrying value of the Marina Parcel.
The Partnership agreed to lease the Marina Parcel from the owner for $8 per
month which terminated December 1, 1996 and was subsequently extended to January
1, 1997. On January 2, 1997, the Partnership entered into an agreement with the
owner for the right of partial use of the marina property. The agreement's
initial term expires on September 1, 1997 and is automatically renewable upon
notice, unless terminated by either property owner or the Partnership.
7. SERVICES AGREEMENT
The Partnership has entered into a services agreement with an individual to
provide executive services. Pursuant to the agreement, the individual has agreed
to serve as a director of the corporate general partner of BRMC. The term of the
agreement is ten years commencing on January 1, 1993. As compensation for these
services, the individual receives the following:
1. Basic advisory fee of not less than $150 per year payable in equal
monthly installments.
2. For the first three calendar years, a guaranteed bonus equal to the
greater of $35 or 2.5% of the Partnership's adjusted contract year earnings
in excess of the contract year base level earnings.
3. Complimentary Premier Club membership.
The basic advisory fee of $150 was paid to the individual in 1994, 1995 and
1996. Cumulative bonuses totaling $107 have been accrued and are included in
other accounts payable and accrued expenses at December 31, 1996.
8. OTHER RELATED PARTY TRANSACTIONS
As described in Note 3, BRMC is entitled to receive several forms of
compensation. In respect to Note 3 subparagraph 1, the Partnership paid $600 in
supervisory management fees during 1994, 1995 and 1996. In connection with Note
3 subparagraph 2, 3, 4 and 5, the following sets forth the extent of amounts
owed by the Partnership to BRMC.
<TABLE>
<C> <S> <C>
Fees incurred in 1993
Capital raising fee(1)..................................... $ 1,650
Debt reduction fee(2)...................................... 1,416
---------
Balance due as of December 31, 1993......................... 3,066
Less: Payment made in 1994 in connection with balance due as
of December 31, 1993.................................. (500)
Plus: Fees incurred in 1994
Capital raising fee(3)..................................... 728
Debt reduction fee(4)...................................... 1,140
Settlement fee(5).......................................... 400
---------
Balance due as of December 31, 1994......................... 4,834
</TABLE>
F-67
<PAGE> 206
BOCA RATON HOTEL AND CLUB LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (IN THOUSANDS OF DOLLARS) -- (CONTINUED)
<TABLE>
<C> <S> <C>
Plus: Fees incurred in 1995
Debt restructuring fee(6).................................. 243
Capital raising fee(7)..................................... 173
Debt reduction fee(8)...................................... 650
---------
Balance due as of December 31, 1995......................... 5,900
Less: Payment made in 1996 in connection with balance due as
of December 31, 1995.................................. (4,500)
Plus: Capital raising fee incurred in 1996(9)............... 2,325
---------
Balance due as of December 31, 1996......................... $ 3,725
=========
(1) Aggregate new money raised in 1993.......................... 110,000
Capital raising fee (@ 1.5%)................................ 1,650
(2) Original principal replaced................................. 154,908
Less: Replacement financing................................. (140,750)
---------
Debt reduction amount....................................... 14,158
=========
Debt reduction fee (@ 10%).................................. 1,416
(3) Aggregate new money raised in 1994.......................... 48,500
Capital raising fee (@ 1.5%)................................ 728
(4) Original principal replaced................................. 25,200
Less: Loan payments......................................... (4,500)
Value of Marina Parcel per settlement....................... (9,300)
---------
Debt reduction amount....................................... 11,400
=========
Debt reduction fee (@ 10%).................................. 1,140
(5) RMA settlement fee.......................................... 400
(6) Debt restructured in 1995................................... 48,500
Debt restructuring fee (@ 0.5%)............................. 243
(7) Aggregate new money raised in 1995.......................... 11,500
Capital raising fee (@ 1.5%)................................ 173
(8) Original principal replaced................................. 54,500
Less: Replacement financing payoff amount................... (51,000)
Plus: New money included in replacement financing........... 3,000
---------
Debt reduction amount....................................... 6,500
=========
Debt reduction fee (@ 10%).................................. 650
(9) Aggregate new money raised in 1996.......................... 155,000
Capital raising fee (@ 1.5%)................................ $ 2,325
</TABLE>
Payment of the balance due BRMC at December 31, 1996 is restricted in
accordance with provisions of the First Mortgage Notes. There is $25 due to the
BRMC from future distribution to Limited Partners for the participation fee on
the $2,500 distribution made during 1996.
In 1994, the Partnership received $500 from an affiliate of VMSRIL for
reimbursement of a percentage of shared executives' salaries and benefits and
$60 for office space rental.
9. PROFIT SHARING PLAN
On January 1, 1987, the Partnership established the Boca Raton Hotel and
Beach Club Employees Savings and Thrift Plan and Trust (the "BEST Plan").
Substantially all employees are eligible to participate
F-68
<PAGE> 207
BOCA RATON HOTEL AND CLUB LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (IN THOUSANDS OF DOLLARS) -- (CONTINUED)
in the BEST Plan. The BEST Plan allows participants to contribute up to 16% of
their total compensation. The Partnership is required to contribute 50% of the
first 6% of the employee's earnings. The Partnership's contributions to the BEST
Plan were $360, $362, and $387 for the years ended December 31, 1994, 1995, and
1996, respectively.
10. PREMIER CLUB MEMBERSHIP DEPOSITS AND CREDITS
During 1991, the Partnership introduced the Premier Club at the resort
complex. The program requires an initial membership deposit and annual dues
based on the number and type of facilities the member uses.
Under the terms of the Premier Club, commencing in January 1991,
applications for membership required a deposit of $15 ($12 for members under a
prior program). The required deposit was increased to $18 as of May 1, 1992, $22
as of May 1, 1993, $25 as of May 1, 1994 and $28 as of May 1, 1995 and $30 as of
May 1, 1996. As of December 31, 1996, the Partnership has recorded membership
deposits of $59,287, of which $47,201 has been either received or credited. As
of December 31, 1996, $1,912 of membership notes bear interest at 7% per annum
and the remaining balance of $10,174 is non-interest bearing. The membership
notes will be collected by 2003 as follows:
<TABLE>
<S> <C>
1997........................................................ $ 3,840
1998........................................................ 3,327
1999........................................................ 2,723
2000........................................................ 1,565
2001........................................................ 565
Thereafter.................................................. 66
-------
$12,086
=======
</TABLE>
Premier Club deposits are net of a deposit credit of $3,584 and $3,462 at
December 31, 1995 and 1996, respectively, granted to members of a prior
membership program. The deposit credit is amortized on the interest method over
30 years. If any member paying over time suspends payments, amounts paid to date
will be forfeited and recognized as income. Fully paid deposits are refundable
upon the death of a member or a member's spouse and upon the expiration of the
30-year membership term (subject to renewal). The deposit is refundable upon a
member's resignation from the Premier Club, but only out of the proceeds of the
membership deposit of the fifth new member to join the Premier Club following
refund of all previously resigned members' deposits.
11. COMMITMENTS, CONTINGENCIES AND OTHER MATTERS
On August 5, 1993, the Partnership entered into agreements to lease food
and beverage operations at the Deer Creek and Carolina country club facilities.
The Partnership is entitled to food and beverage revenues from the operation of
the facilities and is obligated to pay all employee costs, certain maintenance
costs and 50% of the following: real and personal property taxes, insurance
premiums and common area maintenance costs, and certain other items, in
accordance with the terms of the agreements. For the years ended December 31,
1994, 1995 and 1996, rental and other expenses include net losses from these
leases operations of $365, $261 and $431, respectively, which are net of food
and beverage revenues totaling $5,164, $5,241 and $5,018, respectively. Included
in the net losses from these operations are rent expense under the related
leases of $305, $397 and $321, respectively.
F-69
<PAGE> 208
BOCA RATON HOTEL AND CLUB LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (IN THOUSANDS OF DOLLARS) -- (CONTINUED)
Minimum future obligations under operating leases, in effect at December
31, 1996, for certain equipment and the Deer Creek and Carolina food and
beverage operations are as follows:
<TABLE>
<S> <C>
1997........................................................ $1,620
1998........................................................ 1,522
1999........................................................ 1,386
2000........................................................ 343
2001........................................................ 327
Thereafter.................................................. 321
------
$5,519
======
</TABLE>
Rent expense under operating leases, excluding rent expense under the Deer
Creek and Carolina country club leases, totaled $566, $1,290 and $1,493 for the
years ended December 31, 1994, 1995 and 1996, respectively.
In conjunction with the closing of the First and Second Mortgage Notes,
bonuses totaling $1,000 were paid to certain employees of the Partnership.
State of Florida Department of Revenue performed audits of the
Partnership's Sales and Use and Intangible taxes for the periods March 31, 1991
to December 31, 1995 and January 1, 1991 to January 1, 1995, respectively. The
Partnership was assessed an additional $248 of taxes and $106 of interest. The
Partnership disputes the assessments and believes it will be successful in
defending its position. Accordingly, no additional liability has been accrued.
The Partnership and KSL Recreation Corporation (KSL) entered into a
settlement agreement and general release on April 24, 1996. In accordance with
the settlement agreement, the Partnership agreed to pay KSL an amount totaling
$1,250, in exchange for mutual releases and discharges from all actions and
obligations from their respective suits. In accordance with the agreement, the
Partnership paid $750 and agreed to pay $500 on or before June 30, 1998. At
December 31, 1995, $950 was included in accrued settlement cost in the
accompanying balance sheet.
The Partnership is subject to various actions arising out of the operations
of its business. Management is vigorously defending these actions and believes
that all actions are adequately covered by insurance.
In November 1995, the Partnership began Phase I of a planned $40,000
expansion of the Resort. At December 31, 1996, the Partnership incurred $15,148
of costs related to the expansion; $8,396 was completed in 1996 and includes
building of a parking garage and tennis courts. The balance of the expansion
plan encompasses construction of a new conference center, completion of a
fitness center and certain other minor improvements to the Resort facilities.
Construction of the new conference center commenced in September 1996. As of
December 31, 1996 and in connection with the Project, the Partnership had
contractual commitments for capital expenditures of $28,406 of which $1,507 is
included in other accounts payable and accrued expenses in the accompanying
balance sheet.
12. SUBSEQUENT EVENTS
On March 20, 1997, BRMC, BRMC's corporate general partner, and the
Partnership entered into a Contribution and Exchange Agreement with Florida
Panthers Holdings, Inc. (Panthers) and Panthers BRHC Limited to convey
substantially all of the assets and liabilities of the Partnership in exchange
for cash and ownership interests (as defined in the agreement) in Florida
Panthers Holdings, Inc. This exchange of interests, which is subject to approval
of the limited partners of the Partnership and the shareholders of Panthers, has
an agreed-upon value of approximately $325,000 and is to close within five days
of registering Panthers BRHC Limited shares and Panthers shares and warrants
under the Securities Act of 1933 and under applicable state securities law.
F-70
<PAGE> 209
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To The Partners of
LeHill Partners L.P.:
We have audited the accompanying consolidated balance sheet of LeHill
Partners L.P. and consolidated entities (a Delaware limited partnership) as of
December 31, 1996, and the related consolidated statements of operations,
changes in partners' capital and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of LeHill Partners L.P. and
consolidated entities as of December 31, 1996, and the results of their
operations and their cash flows for the year then ended in conformity with
generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Fort Lauderdale, Florida,
September 11, 1997.
F-71
<PAGE> 210
LEHILL PARTNERS L.P. AND CONSOLIDATED ENTITIES
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1996
(IN THOUSANDS)
<TABLE>
<CAPTION>
ASSETS
<S> <C>
CURRENT ASSETS:
Cash and cash equivalents................................. $ 8,819
Deposit held in escrow with closing agent................. 142
Restricted investments.................................... 3,600
Accounts receivable, net of allowance for doubtful
accounts of $179....................................... 1,603
Inventories............................................... 710
Mortgage notes receivable, current portion................ 1,683
Prepaid expenses and other assets......................... 932
-------
Total current assets................................... 17,489
PROPERTY AND EQUIPMENT, AT COST:
Land...................................................... 986
Building and improvements................................. 6,885
Furniture and equipment................................... 3,134
-------
11,005
Less accumulated depreciation............................. 1,094
-------
Property and equipment, net............................ 9,911
MORTGAGE NOTES RECEIVABLE, NONCURRENT PORTION............... 2,054
CASH AND CASH EQUIVALENTS RESTRICTED FOR FUTURE MAJOR
REPAIRS AND REPLACEMENTS.................................. 2,354
INVESTMENTS RESTRICTED FOR FUTURE MAJOR REPAIRS AND
REPLACEMENTS.............................................. 1,026
-------
Total assets...................................... $32,834
=======
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable and accrued expenses..................... $ 1,909
Accrued payroll expenses.................................. 757
Accrued property tax expenses............................. 368
Deferred revenue.......................................... 2,173
Due to unit owners........................................ 151
Due to former AUO manager................................. 640
-------
Total current liabilities......................... 5,998
MINORITY INTEREST IN CONSOLIDATED ENTITIES.................. 5,005
PARTNERS' CAPITAL........................................... 21,831
-------
Total liabilities and partners' capital........... $32,834
=======
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of this balance sheet.
F-72
<PAGE> 211
LEHILL PARTNERS L.P. AND CONSOLIDATED ENTITIES
CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1996
(IN THOUSANDS)
<TABLE>
<S> <C>
REVENUE:
Resort operations
Rooms.................................................. $ 19,394
Food and beverage...................................... 13,684
Other departments...................................... 3,844
Other income........................................... 784
--------
Total resort operations........................... 37,706
Interest income........................................... 1,102
Excess of proceeds received over basis of mortgages....... 1,033
Excess distribution proceeds received..................... 1,152
Other..................................................... 61
--------
Total revenue..................................... 41,054
--------
EXPENSES:
Resort operations
Cost of sales.......................................... 4,624
Payroll and related expenses........................... 8,096
Property operations and maintenance.................... 2,159
Other operating and administrative expenses............ 8,809
Management fees........................................ 1,410
Marketing.............................................. 2,908
Depreciation and amortization.......................... 912
Real estate taxes...................................... 352
--------
Total resort operations........................... 29,270
Other expenses............................................ 100
--------
Total expenses.................................... 29,370
--------
INCOME BEFORE MINORITY INTEREST............................. 11,684
MINORITY INTEREST IN OPERATIONS OF CONSOLIDATED ENTITIES.... (4,679)
--------
NET INCOME.................................................. 7,005
PRO FORMA ADJUSTMENT TO REFLECT INCOME TAXES................ (2,702)
--------
PRO FORMA NET INCOME........................................ $ 4,303
========
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of this statement.
F-73
<PAGE> 212
LEHILL PARTNERS L.P. AND CONSOLIDATED ENTITIES
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL
YEAR ENDED DECEMBER 31, 1996
(IN THOUSANDS)
<TABLE>
<S> <C>
PARTNERS' CAPITAL, January 1, 1996.......................... $28,648
Distributions............................................. (13,822)
Net income................................................ 7,005
-------
PARTNERS' CAPITAL, December 31, 1996........................ $21,831
=======
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of this statement.
F-74
<PAGE> 213
LEHILL PARTNERS L.P. AND CONSOLIDATED ENTITIES
CONSOLIDATED STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 1996
(IN THOUSANDS)
<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income from operations................................ $ 7,005
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization.......................... 912
Provision for doubtful accounts........................ 19
Minority interest in operations of consolidated
entities.............................................. 4,679
Change in assets and liabilities:
Accounts receivable.................................. 1,600
Inventories.......................................... (43)
Prepaid expenses and other assets.................... 822
Accounts payable and accrued expenses................ 417
Deferred revenue..................................... 377
-------
Net cash provided by operating activities......... 15,788
-------
CASH FLOWS FROM INVESTING ACTIVITIES:
Deposit held in escrow with closing agent................. (142)
Acquisition of mortgage notes receivable.................. (690)
Repayment of mortgage notes receivable.................... 2,977
Additions to property and equipment....................... (3,204)
Increase in cash restricted for future major repairs and
maintenance............................................ (2,287)
Sale of restricted marketable securities.................. 2,401
Purchase of marketable securities......................... (3,202)
Decrease in other assets.................................. 19
-------
Net cash used in investing activities............. (4,128)
-------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions to partners................................. (13,822)
Decrease in due to unit owners............................ (1,882)
Distributions to minority partners........................ (2,084)
Payments made on behalf of minority partners.............. (983)
-------
Net cash used in financing activities............. (18,771)
-------
NET DECREASE IN CASH AND CASH EQUIVALENTS................... (7,111)
CASH AND CASH EQUIVALENTS, beginning of year................ 15,930
-------
CASH AND CASH EQUIVALENTS, end of year...................... $ 8,819
=======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest............................................... $ 30
=======
Income taxes........................................... $ 77
=======
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING ACTIVITIES:
Debt reclassified to deferred revenue..................... $ 483
=======
Acquisition of units of hotel and reduction of mortgage
notes receivable through foreclosures and deeds in lieu
of foreclosure......................................... $ 6,504
=======
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of this statement.
F-75
<PAGE> 214
LEHILL PARTNERS L.P. AND CONSOLIDATED ENTITIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996
1. BACKGROUND OF THE PARTNERSHIP AND OPERATIONS:
The accompanying consolidated financial statements of LeHill Partners L.P.
(the "Partnership") consist of the accounts of the Partnership and the combined
financial statements of the accounts maintained by the Registry Hotel
Corporation for the individual unit owners of the Registry Hotel at Pelican Bay
("Registry Resort") and the Association of Unit Owners of the Registry Hotel at
Pelican Bay, Inc. ("AUO"). The Partnership owned a 60% interest in the AUO as of
December 31, 1996. All material intercompany transactions and balances have been
eliminated in consolidation.
The Partnership was formed on February 22, 1995 by Pelican Hill Associates,
L.P. ("Pelican Hill"), the sole general partner, ResortHill, Inc. ("RHI"),
LW-LP, Inc. ("LW-LP") and Blakely Capital Inc. ("Blakely") to acquire 100% of
the participation interests in approximately 319 first mortgages collateralized
by the property and 18 condominium units in the 474-unit Registry Resort located
in Naples, Florida. The Partnership owned 283 of the condominium units and held
60 first mortgages at December 31, 1996. The Partnership Agreement, as amended,
provides for income allocations, additional capital contributions, and
distributions among the partners.
The Partnership is a member of the AUO, a nonresidential hotel condominium
association, and has entered into an Agency Agreement under which the revenue of
Registry Resort and the commercial units are pooled and allocated to the
investors after deducting operating expenses and management fees.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of Accounting
The accompanying financial statements include the accounts of the
Partnership prepared on the accrual basis of accounting in accordance with
generally accepted accounting principles.
(b) Cash and Cash Equivalents
For the purpose of these statements, the Partnership's policy is to
consider all highly liquid instruments with original maturities of three months
or less to be cash equivalents.
(c) Inventories
Inventories are stated at the lower of first-in, first-out cost or market.
Inventories consist of food, beverage and operating supplies.
(d) Depreciation
Depreciation is generally computed using the straight-line method over the
estimated economic lives of five years for personal property, and principally 40
years for buildings and improvements.
(e) Property and Equipment
Property and equipment are carried at cost. Repairs and maintenance costs
are charged to operations as incurred. Significant betterments and improvements
are capitalized and depreciated over their estimated economic lives.
(f) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires that management make estimates and
assumptions that affect the reported amounts of assets and
F-76
<PAGE> 215
LEHILL PARTNERS L.P. AND CONSOLIDATED ENTITIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1996
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from these estimates.
(g) Investments and Cash and Cash Equivalents Restricted For Future Major
Repairs and Replacement
Pursuant to the AUO's governing documents, funds are required to be
reserved for future major repairs and replacements. Reserved funds are to be
held in separate accounts and are unable to be used for expenditures for normal
operations.
(h) Fair Value of Financial Instruments
The carrying amount of cash and cash equivalents, investments, receivables,
other assets, accounts payable and accrued expenses and deferred revenue
approximates fair value because of the short maturity of these instruments.
Fair value estimates are made at a specific point in time, based on
relevant market information about the financial instrument. These estimates are
subjective in nature and involve uncertainties and matters of significant
judgment, and therefore cannot be determined with precision. The assumptions
used have a significant effect on the estimated amounts reported.
3. INCOME TAXES
No provision for income taxes has been made in the accompanying
consolidated financial statements as the liability for such taxes is that of the
partners of the Partnership and the unit owners of Registry Resort. Since the
AUO is a nonresidential hotel condominium association, nonexempt and investment
income are subject to tax at normal corporate rates. The accompanying
consolidated statement of operations includes pro forma adjustments to reflect
the income tax provision which would be incurred if the Partnership were a
taxable corporation.
4. MORTGAGE NOTES RECEIVABLE
On February 24, 1995, the Partnership acquired a majority participation
interest in 319 mortgage loans collateralized by Registy Resort of which 87.56%
and 12.44% of their interests were acquired from the Resolution Trust
Corporation and affiliates, respectively. The promissory notes acquired by the
Partnership, which had an aggregate outstanding balance of principal and accrued
interest at closing of $56.5 million were purchased by the Partnership for $27.3
million. These notes receivable represent recourse first mortgage loans
requiring monthly payments of principal and interest with varying maturities of
30 years from dates of original execution. The interest rate is adjusted every
five years based on the average yield of United States Treasury Securities,
five-year maturities, plus 3%. The balance of the Partnership's net mortgage
notes receivable at December 31, 1996 is as follows (in 000's):
<TABLE>
<S> <C>
Current principal balance plus unamortized accrued interest
at date of acquisition.................................... $ 9,597
Difference between principal and accrued interest at date of
acquisition and acquisition price......................... (5,860)
-------
Total mortgage notes receivable............................. 3,737
Less current portion........................................ (1,683)
-------
Long-term portion of mortgage notes receivable.............. $ 2,054
=======
</TABLE>
F-77
<PAGE> 216
LEHILL PARTNERS L.P. AND CONSOLIDATED ENTITIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1996
Payments of interest and principal related to mortgage notes receivable
totalled $1.0 million during the year ended December 31, 1996.
5. RELATED PARTY TRANSACTIONS
Pursuant to the terms of the partnership agreement, an asset management fee
of $120,000 for the year ended December 31, 1996 was paid to RHI, as a
co-general partner of Pelican Hill.
6. MANAGEMENT AGREEMENTS
Registy Resort is operated under a management agreement between Property
Directions, Inc., AUO's manager, and the Registry Hotel Corporation, as
operator. The agreement provides for a basic management fee equal to 2.5% of the
"Basic Fee Base" (as defined) and an incentive fee of 20% of the "Incentive Fee
Base" (as defined).
During 1996, the AUO incurred the following management fees (in 000's):
<TABLE>
<S> <C>
Basic management fees....................................... $ 929
Incentive fee............................................... 237
AUO manager fees............................................ 124
------
$1,290
======
</TABLE>
The agreement provides a separate fee of up to 1% of guest-room revenue for
actual expenses incurred related to advertising of Registry Resort ("license
fee"). The license fee totaled approximately $194,000 for the year ended
December 31, 1996 and is included in management fees in the accompanying
consolidated statement of operations.
7. EXCESS DISTRIBUTION PROCEEDS RECEIVED
Prior to 1996, the Company had a right to certain funds held in escrow for
unit owners which were derived from the operations of Registry Resort. These
funds were released in 1996 and are recorded as excess distribution proceeds
received in the accompanying consolidated statement of operations.
8. SUBSEQUENT EVENTS
On May 19, 1997, the sole shareholder of RHI, (a co-general partner of
Pelican Hill), agreed to purchase the entire interests of LW-LP and certain of
the other partners of Pelican Hill for a purchase price of approximately $72
million subject to an adjustment to reflect changes in the closing date, the
capital contributions needed to close current condominium purchases, or a change
in the current number of condominium units under contract for sale to Florida
Panthers Holdings, Inc.
Pursuant to the Merger Agreement consummated on August 13, 1997, Florida
Panthers Holdings, Inc. acquired interests constituting approximately 68% of
Registry Resort in exchange for approximately $75.5 million in cash, together
with 918,174 shares and warrants to purchase 325,000 shares of the Company's
Class A Common Stock.
F-78
<PAGE> 217
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Partners of
Biltmore Hotel Partners
We have audited the balance sheets of Biltmore Hotel Partners (an Arizona
General Partnership), as of December 31, 1997 and 1996, and the related
statements of income, partners' capital (deficit), and cash flows for each of
the three years in the period ended December 31, 1997. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Biltmore Hotel Partners (an
Arizona General Partnership) as of December 31, 1997 and 1996, and the results
of its operations and its cash flows for each of the three years in the period
ended December 31, 1997, in conformity with generally accepted accounting
principles.
Ernst & Young LLP
Phoenix, Arizona
February 5, 1998, except for Note 8 as to which the date is March 2, 1998
F-79
<PAGE> 218
BILTMORE HOTEL PARTNERS
(AN ARIZONA GENERAL PARTNERSHIP)
BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31,
-------------------
1997 1996
-------- --------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................... $ -- $ 765
Accounts receivable, net of allowance for doubtful accounts
of $1,212 in 1997 and $941 in 1996........................ 6,739 5,964
Due from related parties.................................... -- 123
Inventories................................................. 1,083 984
Prepaid expenses............................................ 209 67
Reserve funds............................................... 896 967
-------- --------
Total current assets........................................ 8,927 8,870
-------- --------
Property and equipment:
Land and land improvements.................................. 14,344 14,345
Building and improvements................................... 39,608 39,484
Furniture, fixtures and vehicles............................ 27,387 25,171
Equipment under capital leases.............................. 1,459 1,459
China, linen, silverware, glassware and uniforms............ 981 981
-------- --------
83,779 81,440
Less accumulated depreciation and amortization.............. (23,428) (17,751)
-------- --------
60,351 63,689
-------- --------
Other assets:
Intangible assets, net of accumulated amortization of $5,150
in 1997 and $4,336 in 1996................................ 2,759 3,609
Reserve funds............................................... -- 1,489
Other....................................................... 7 7
-------- --------
2,766 5,105
-------- --------
$ 72,044 $ 77,664
======== ========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable and bank overdraft......................... $ 3,918 $ 1,986
Accrued expenses and other liabilities...................... 7,658 5,967
Current maturities of capital lease obligations............. 25 428
Current maturities of mortgage notes payable................ 1,235 1,137
Due to related parties...................................... 249 382
-------- --------
Total current liabilities................................... 13,085 9,900
-------- --------
Mortgage note payable, net of current maturities............ 62,192 63,328
Capital lease obligations, net of current maturities........ -- 26
Partners' capital (deficit)................................. (3,233) 4,410
-------- --------
$ 72,044 $ 77,664
======== ========
</TABLE>
See accompanying notes.
F-80
<PAGE> 219
BILTMORE HOTEL PARTNERS
(AN ARIZONA GENERAL PARTNERSHIP)
STATEMENTS OF INCOME
(IN THOUSANDS)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------
1997 1996 1995
------- ------- -------
<S> <C> <C> <C>
Revenues
Rooms..................................................... $26,068 $25,348 $21,835
Food and beverage......................................... 24,196 20,676 17,378
Other operating revenues.................................. 7,021 6,769 5,607
------- ------- -------
57,285 52,793 44,820
------- ------- -------
Departmental costs and expenses
Rooms..................................................... 5,699 5,167 4,052
Food and beverage......................................... 13,198 12,108 10,503
Other operating costs..................................... 3,136 2,728 2,749
------- ------- -------
22,033 20,003 17,304
------- ------- -------
Gross operating income...................................... 35,252 32,790 27,516
------- ------- -------
Undistributed operating expenses
Administrative and general................................ 4,394 5,097 4,122
Marketing................................................. 4,290 3,927 3,767
Energy.................................................... 1,539 1,506 1,545
Property operation and maintenance........................ 2,719 2,537 2,379
------- ------- -------
12,942 13,067 11,813
------- ------- -------
Income before other charges................................. 22,310 19,723 15,703
Other charges
Management fees........................................... 841 540 446
Property taxes, insurance and rent........................ 2,293 2,302 2,336
Interest expense.......................................... 5,292 4,908 4,311
Depreciation and amortization............................. 6,491 6,438 6,070
Other..................................................... 206 122 344
------- ------- -------
Net income before extraordinary loss........................ 7,187 5,413 2,196
Extraordinary loss from early extinguishment of debt........ -- 653 --
------- ------- -------
Net income.................................................. $ 7,187 $ 4,760 $ 2,196
======= ======= =======
</TABLE>
See accompanying notes.
F-81
<PAGE> 220
BILTMORE HOTEL PARTNERS
(AN ARIZONA GENERAL PARTNERSHIP)
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
(IN THOUSANDS)
<TABLE>
<CAPTION>
W&S/W&S INVESTMENTS AZB LIMITED PARTNERSHIP
-------------------------------------------------- -------------------------------------
ACCUMULATED
PREFERRED PREFERRED CAPITAL CAPITAL CAPITAL ACCUMULATED
RETURN CAPITAL CONTRIBUTION (DEFICIT) CONTRIBUTION DEFICIT TOTAL
--------- --------- ------------ ----------- ------------ ----------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31,
1994...................... $ (472) $ 22,000 $ 8,000 $(4,836) $ 8,000 $(6,337) $ 26,355
Distributions............... -- -- (2,180) -- (2,180) -- (4,360)
Unpaid preferred return..... (133) -- -- -- -- -- (133)
Distribution of preferred
return.................... (1,473) -- -- -- -- -- (1,473)
Net income.................. -- -- -- 1,679 -- 517 2,196
------- -------- ------- ------- ------- ------- --------
Balance, December 31,
1995...................... (2,078) 22,000 5,820 (3,157) 5,820 (5,820) 22,585
Contributions............... -- -- -- -- 10 -- 10
Distribution of preferred
capital................... -- (22,000) -- -- -- -- (22,000)
Distribution of preferred
return.................... (945) -- -- -- -- -- (945)
Net income.................. -- -- -- 2,565 -- 2,195 4,760
------- -------- ------- ------- ------- ------- --------
Balance, December 31,
1996...................... (3,023) -- 5,820 (592) 5,830 (3,625) 4,410
Distributions............... -- -- (7,415) -- -- (7,415) (14,830)
Net income.................. -- -- -- 3,594 -- 3,593 7,187
------- -------- ------- ------- ------- ------- --------
Balance, December 31,
1997...................... $(3,023) $ -- $(1,595) $ 3,002 $ 5,830 $(7,447) $ (3,233)
======= ======== ======= ======= ======= ======= ========
</TABLE>
See accompanying notes.
F-82
<PAGE> 221
BILTMORE HOTEL PARTNERS
(AN ARIZONA GENERAL PARTNERSHIP)
STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------
1997 1996 1995
-------- -------- --------
<S> <C> <C> <C>
Cash flows from operating activities
Net income.................................................. $ 7,187 $ 4,760 $ 2,196
Adjustments to reconcile net income to net cash provided by
operating activities
Depreciation and amortization............................. 6,491 6,439 6,070
Changes in assets and liabilities
Accounts receivable.................................... (774) (1,796) 546
Due from related parties............................... 123 (123) --
Inventories............................................ (100) (189) 142
Prepaid expenses....................................... (142) 165 (26)
Current reserve funds.................................. 1,560 (967) --
Other assets........................................... 36 (29) 154
Accounts payable and bank overdraft.................... 1,932 627 (385)
Due to related parties................................. (132) 172 210
Accrued expenses and other liabilities................. 1,690 (1,716) 1,746
-------- -------- --------
Net cash provided by operating activities................... 17,871 7,343 10,653
-------- -------- --------
Cash flows from investing activities
Purchases of property and equipment......................... (2,339) (2,347) (2,942)
Reserve funds for property and equipment replacement........ -- (1,489) --
-------- -------- --------
Net cash used in investing activities....................... (2,339) (3,836) (2,942)
-------- -------- --------
Cash flows from financing activities
Net proceeds from refinancing............................... -- 14,271 --
Payment of refinance costs.................................. -- (813) --
Payment of principal on note payable........................ (1,039) (706) (199)
Payment of preferred return................................. -- (1,078) (1,732)
Payment of preferred capital................................ -- (22,000) --
Net decrease in capital lease obligations................... (428) (468) (427)
Capital contributions....................................... -- 10 --
Capital distributions....................................... (14,830) -- (4,360)
-------- -------- --------
Net cash used in financing activities....................... (16,297) (10,784) (6,718)
-------- -------- --------
Net increase (decrease) in cash............................. (765) (7,277) 993
Cash at beginning of year................................... 765 8,042 7,049
-------- -------- --------
Cash at end of year......................................... $ -- $ 765 $ 8,042
======== ======== ========
Supplemental disclosure of cash flow information
Cash paid for interest...................................... $ 4,856 $ 4,766 $ 4,212
======== ======== ========
</TABLE>
See accompanying notes.
F-83
<PAGE> 222
BILTMORE HOTEL PARTNERS
(AN ARIZONA GENERAL PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
(IN THOUSANDS)
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
Biltmore Hotel Partners, an Arizona general partnership (the Partnership),
was formed on June 8, 1992 for the purpose of acquiring, owning, operating and
renovating the Arizona Biltmore Hotel (the Hotel), a resort hotel located in
Phoenix, Arizona. The Partnership was formed by AZB Limited Partnership, a
Delaware limited partnership (AZB) and Aoki Realty Corporation of Arizona, an
Arizona corporation and wholly owned subsidiary of Aoki Corporation, a Japanese
corporation (Aoki Arizona and Aoki, respectively). AZB and AZ Biltmore Hotel (AZ
Biltmore), an Arizona limited partnership and general partner of AZB, are
responsible for the administration of the partnership, including all accounting
and record keeping.
On May 12, 1995, W&S Hotel Holding Corp, a wholly owned subsidiary of W&S
Hotel L.L.C., acquired all of the outstanding capital stock of Westin Hotel
Company (Westin) from Aoki. Concurrently, W&S Arizona Corp., also a wholly owned
subsidiary of W&S Holding Corp., acquired all the issued and outstanding stock
of Aoki Arizona. Subsequently, Aoki Arizona changed its name to W&S Realty
Corporation of Arizona (W&S).
On February 14, 1997 W&S Realty Investment Group L.L.C., an Arizona limited
liability company and an affiliate of AZB (W&S Investments), acquired the
interest of W&S Realty Corporation of Arizona in the Partnership as of January
1, 1997.
On December 19, 1997 the Partnership entered into a contribution and
exchange agreement to admit Wright-Bilt Corp, a Delaware corporation
(Wright-Bilt) and a wholly owned subsidiary of Florida Panthers Holdings, Inc.,
a Delaware corporation (NYSE:PAW) to the Partnership. Upon the admission of
Wright-Bilt to the Partnership, the Partnership will be converted to a limited
liability limited partnership in which AZB and Wright-Bilt will be the general
partners and AZB will be the managing general partner. (See Note 8.)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The financial statements include the consolidated accounts of the Hotel and
the restaurants and other facilities wholly owned by the Partnership. The
Partnership is also affiliated with the operation of a rental pool with respect
to certain units of the Arizona Biltmore Hotel Villas Condominiums (Villas)
located on property adjacent to the Hotel. Cash receipts generated from rental
of the Villas are processed by the front desk system of the Hotel and then
subsequently transferred to AZB for payment of a management fee and distribution
of payments to Villas owners. The balance sheet and related statement of
operation and cash flow for this affiliated operation are not included in these
financial statements.
Cash and Cash Equivalents
Cash and cash equivalents includes amounts in-house, amounts in demand
depository accounts, and liquid investments with maturities at date of purchase
of 90 days or less.
Inventories
Inventories consist of food, beverage, operating supplies and retail store
merchandise, and are stated at the lower of cost or market. Cost is primarily
determined using the first-in, first-out method.
F-84
<PAGE> 223
BILTMORE HOTEL PARTNERS
(AN ARIZONA GENERAL PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS)
Reserve Funds
Reserve Funds represent amounts on deposit with the Partnership's lender
relating to property taxes, insurance and future furniture, fixture and
equipment expenditures (see Note 2).
Property and Equipment
During 1996, the Partnership adopted SFAS No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of,
which requires impairment losses to be recorded on long-lived assets used in
operations when indicators of impairment are present and the undiscounted cash
flows estimated to be generated by those assets are less than the assets'
carrying amount. Impaired assets are written down to fair value. At December 31,
1997 and 1996, the Partnership does not hold any assets that meet the impairment
criteria of SFAS No. 121.
Property and equipment are recorded at cost and are depreciated using the
straight-line method over their estimated useful lives as follows:
<TABLE>
<CAPTION>
ASSETS USEFUL LIVES
- ------ ------------
<S> <C>
Buildings and improvements.................................. 35 years
Land improvements........................................... 15 years
Furniture, fixtures and vehicles............................ 3 - 12 years
China, linen, silverware, glassware and uniforms............ 5 years
</TABLE>
One-half of the allocated costs of china, linen, silverware, glassware and
uniforms purchased on June 8, 1992 has been amortized over five years. The
remaining balance will be maintained as par stock. Subsequent purchases of such
items are expensed.
Intangibles
Intangibles represent principally the estimated value of established
bookings, which are being amortized over a five year period, and the estimated
value of certain contracts with third parties, which are being amortized over
the terms of the related contracts, at the date of acquisition of the Hotel by
the Partnerships in 1992.
Financial Instruments
The carrying amount of receivables, accounts payable and accrued expenses,
and the notes and loans payable approximates their fair value.
Income Taxes
No federal or state income taxes are payable by the Partnership and none
have been provided in the accompanying combined financial statements. The
partners are to include their respective share of taxable income or loss in
their respective separate federal and state income tax returns.
Use of Estimates
The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
F-85
<PAGE> 224
BILTMORE HOTEL PARTNERS
(AN ARIZONA GENERAL PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS)
2. MORTGAGE NOTES PAYABLE
During June 1996, the Partnership executed four notes payable to lenders
totaling $65,000. These notes are secured by a Deed of Trust, Security
Agreement, Assignment of Rents and Revenues and Fixture Filing with respect to
the real and personal property of the Partnership related to the ownership and
operation of the Hotel and other related security documents including a Pledge
and Security Agreement and a Security Agreement. A substantial portion of the
proceeds from the notes were used to repay the Partnership's previous mortgage
note discussed below. The notes require monthly payments of principal and
interest totaling $534 and mature on July 1, 2016. Interest is payable at the
rate of 8.25% per annum.
The Pledge and Security Agreement requires the Partnership to deposit 2.5%
of the preceding month's gross revenue of the Hotel into a security account for
future furniture, fixture and equipment expenditures. During 1997 and 1996 the
Partnership deposited $1,422 and $1,489 or 2.5% and 3.0%, respectively, of the
1997 and 1996 annual gross revenues of the Hotel into the security account and
withdrew $2,912 from the account in 1997. The balance of this fund is recorded
as Other Assets -- Reserve Funds on the accompanying balance sheet as of
December 31, 1997.
In addition to the reserve for future furniture, fixture and equipment
expenditures, the Security Agreement requires the Partnership to deposit into a
second security account amounts related to the payment of property taxes and
insurance. The Partnership has on deposit $896 and $967 in this security account
as of December 31, 1997 and 1996, respectively. These amounts are recorded as
Current Assets -- Reserve Funds on the accompanying balance sheets.
Prior to June 1996, the mortgage note payable was due to The Equitable Life
Assurance Society of the United States and was collateralized by the assets of
the Hotel. All principal and unpaid interest relating to the note was due June
7, 2002. Prepayment of the note was permitted, however, a prepayment premium of
the lessor of (i) 3% of the principal amount being prepaid, or (ii) a Yield
Maintenance Payment, as defined in the note, was required. The Partnership paid
a prepayment penalty of $1,522 related to the early payoff of this note in June
1996. At the same time, the Partnership recognized as income previously accrued
interest of $869 relating to the notes graduated interest rate. The net of these
two amounts has been classified as an extraordinary item, during the year ended
December 31, 1996.
Future minimum principal payments on the notes payable for the years ended
December 31 are as follows:
<TABLE>
<S> <C>
1998........................................................ $ 1,235
1999........................................................ 1,341
2000........................................................ 1,455
2001........................................................ 1,580
2002........................................................ 1,716
Thereafter.................................................. 56,100
-------
$63,427
=======
</TABLE>
3. MANAGEMENT AGREEMENT
The Partnership entered into a Marketing and Technical Services Agreement
(the Agreement) on August 1, 1994 through December 21, 2012 with Westin. The
Partnership has the right to extend the Agreement on the same terms and
conditions for up to 20 years. The Agreement provides for payments to Westin of
2% of the Hotel's monthly gross revenues during the first three years of the
Agreement and 4% thereafter. The Partnership incurred $1,038 and $890 in fees
under the Agreement during 1996 and 1995,
F-86
<PAGE> 225
BILTMORE HOTEL PARTNERS
(AN ARIZONA GENERAL PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS)
respectively. Amounts payable under the Agreement at December 31, 1996 are
included in amounts due to related parties.
As of December 31, 1996, the Partnership terminated the Agreement with
Westin and entered into a new Marketing and Technical Services Agreement (the
W&S Agreement) with W&S Investments concurrently with W&S Investments'
acquisition of W&S's interest in the Partnership. The W&S Agreement expires on
December 31, 2012, can be extended by the Partnership for an additional period
of 20 years and provides for payments to W&S Investments of 2% of the Hotel's
monthly gross revenues through July 31, 1997 and 4% thereafter. The Partnership
incurred $1,683 in fees under the W&S Agreement during 1997. Amounts payable
under the W&S Agreement at December 31, 1997 are included in amounts due to
related parties.
The Partnership entered into an informal Management Services Agreement with
AZ Biltmore during the year ended December 31, 1994 (the MS Agreement). Under
the terms of the MS Agreement, the partnership pays AZ Biltmore a fee of 1% of
the Hotel's monthly gross revenues through July 31, 1997 and 2% of monthly gross
revenues thereafter. The Partnership incurred management fees of $841, $539 and
$446 to AZ Biltmore in 1997, 1996 and 1995, respectively. Amounts payable under
the MS Agreement at December 31, 1997 and 1996 are included in amounts due to
related parties.
4. LEASES
The Partnership has capital leases for a telephone system and cooling
system which expire at various times through August 1998. The Partnership also
has various operating leases for office equipment.
5. LITIGATION
The Partnership is currently involved in certain legal proceedings with the
Maricopa County Assessor related to the value of the Hotel for real property tax
purposes. In 1993, the Partnership contested the valuation of the Hotel for 1992
and paid the real estate taxes assessed for 1992 under protest. During the
appeal process, the valuation of the Hotel for 1992 was increased and the
Partnership accrued an additional $450 in real estate taxes pending the final
outcome of this litigation. During 1997, the Arizona Court of appeals remanded
the case to the trial court with directions to adjust the valuation of the Hotel
to reflect the value of intangibles included in the purchase price of the Hotel.
For 1993, 1994 and 1995, the Partnership has accrued real property taxes as
assessed, but paid these taxes under protest and appealed the valuation of the
Hotel. These proceedings have been stayed pending the outcome of the 1992
appeal.
Management of the Partnership is of the opinion that settlement of such
proceedings will not have a materially adverse effect on the financial position,
results of operations or cash flows of the Partnership.
6. PARTNERS' CAPITAL
Partner capital accounts are maintained for each Partner in accordance with
the terms of the Agreement of Partnership of Biltmore Hotel Partners, as amended
(the Partnership Agreement). Capital accounts include initial partner
contributions and have been increased by subsequent contributions and decreased
by subsequent cash distributions. Profits and losses are allocated under the
terms of the Partnership Agreement to the partners in a manner which causes each
partner's adjusted capital account balance to equal the amounts that would be
distributed to such partner if all the Partnership's assets were sold at book
value and the proceeds distributed.
F-87
<PAGE> 226
BILTMORE HOTEL PARTNERS
(AN ARIZONA GENERAL PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS)
Under the terms of the Partnership Agreement, W&S was required to
contribute up to $30,000 for renovation of the Hotel which would be W&S
Preferred Capital as defined in the Partnership Agreement. All other capital
contributions by partners are subordinated to the W&S Preferred Capital. W&S
earned a preferred return on the Preferred Capital contributed, other than any
capital contributed to pay the W&S Preferred Return, computed as simple interest
at LIBOR plus 125 basis points. The Partnership Agreement provided that W&S was
to contribute additional Preferred Capital to pay the W&S Preferred Return if
cash flows from the operations of the Partnership were insufficient to pay the
Preferred Return. During 1996, the Partnership distributed to W&S the W&S
Preferred Capital and the balance of the W&S Preferred Return.
7. YEAR 2000 (UNAUDITED)
The Partnership is assessing the modification or replacement of its
software that may be necessary for its computer systems to function properly
with respect to dates in the year 2000 and thereafter. The Partnership does not
believe that the cost of either modifying existing software or converting to new
software will be significant, or that the year 2000 issue will pose significant
operational problems for its computer systems.
8. SUBSEQUENT EVENT
On March 2, 1998, an affiliate of Florida Panthers Holdings, Inc. acquired
a controlling ownership interest in the Arizona Biltmore Hotel pursuant to a
contribution and exchange agreement dated December 19, 1997 described in Note 1.
F-88
<PAGE> 227
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors
Florida Panthers Holdings, Inc.
We have audited the accompanying Historical Summaries of Revenues and
Direct Operating Expenses of the Rental Pool Operations of the Biltmore Villas
(the Rental Pool), for the years ended December 31, 1997 and 1996. These
Historical Summaries are the responsibility of the management of the Rental
Pool. Our responsibility is to express an opinion on these Historical Summaries
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the Historical Summaries are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amount and disclosures in the Historical Summaries. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the Historical
Summaries. We believe that our audits provide a reasonable basis for our
opinion.
The Historical Summaries have been prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission for
inclusion in the Current Report on Form 8-K/A of Florida Panthers Holdings, Inc.
as described in Note 1, and are not intended to be a complete presentation of
the financial position and operations of the entity which manages the Rental
Pool.
In our opinion, the Historical Summaries referred to above present fairly
in all material respects, the revenues and direct operating expenses of the
Rental Pool Operations of the Biltmore Villas, as described in Note 1, for the
years ended December 31, 1997 and 1996, in conformity with generally accepted
accounting principles.
Ernst & Young LLP
Phoenix, Arizona
May 4, 1998
F-89
<PAGE> 228
THE RENTAL POOL OPERATIONS OF THE BILTMORE VILLAS
HISTORICAL SUMMARIES OF REVENUES AND DIRECT OPERATING EXPENSES
(IN THOUSANDS)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------
1997 1996
--------- ---------
<S> <C> <C>
Villa room revenues......................................... $ 6,413 $ 3,680
Credit card and travel agent commissions.................... (309) (170)
------- -------
Villa revenues.................................... 6,104 3,510
Revenue participation to villa owners....................... (3,018) (1,730)
------- -------
3,086 1,780
Direct operating expenses................................... (247) (129)
------- -------
Excess of revenues over direct operating expenses........... $ 2,839 $ 1,651
======= =======
</TABLE>
See accompanying notes.
F-90
<PAGE> 229
THE RENTAL POOL OPERATIONS OF THE BILTMORE VILLAS
NOTES TO HISTORICAL SUMMARIES OF REVENUES
AND DIRECT OPERATING EXPENSES
DECEMBER 31, 1997 AND 1996
(DOLLARS IN THOUSANDS)
1. ORGANIZATION AND BASIS OF PRESENTATION
The Rental Pool Operations of the Biltmore Villas (the Rental Pool)
represent the presentation of the operations of nightly rental of participating
condominium units (Villas) which are located adjacent to the Arizona Biltmore
Hotel, a resort hotel located in Phoenix, Arizona. The Villas are owned by
affiliated and unaffiliated individuals who have entered into agreements (the
Rental Pool Agreements) with AZ Biltmore Hotel Limited Partnership (the
Partnership) whereby the Villas are operated as hotel units and revenue
participation payments are paid to the Villas owners (see Note 3).
At December 31, 1997 and 1996, there were 61 and 41 Villas, respectively,
under management by the Partnership.
On January 1, 1998 the Partnership assigned the rights and obligations of
the Rental Pool Agreements to Biltmore Hotel Partners (BHP). On March 2, 1998,
an affiliate of Florida Panthers Holdings, Inc. acquired a controlling interest
in BHP. Thus, the accompanying Historical Summaries have been prepared for the
purpose of complying with the rules and regulations of the Securities and
Exchange Commission for inclusion in the Current Report on Form 8-K/A of Florida
Panthers Holdings, Inc. The Historical Summaries are not a complete presentation
of the financial position and operations of the Partnership for the years ended
December 31, 1997 and 1996, as no other assets, liabilities or operations of the
Partnership are applicable to the Rental Pool Agreements assigned to BHP.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
The preparation of Historical Summaries in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts included in the Historical
Summaries and accompanying notes thereto. Actual results could differ from those
estimates.
Direct Operating Expenses
Direct operating expenses are primarily comprised of maintenance and
administrative costs.
3. REVENUE PARTICIPATION TO VILLA OWNERS
In accordance with individual Rental Pool Agreements, each Villa owner is
entitled to participate in the revenues generated from the rental of all Villa
units on a given day in proportion to the total number of Villa units
participating in the rental pool on that day. The Villa owners participation is
equal to 50 percent of net villa revenues (on a per-villa basis) up to $100
annually, and 35 percent of such net villa revenues in excess of $100.
F-91
<PAGE> 230
- ------------------------------------------------------
- ------------------------------------------------------
WE HAVE NOT AUTHORIZED ANY DEALER, SALESPERSON OR OTHER PERSON TO GIVE ANY
INFORMATION OR REPRESENT ANYTHING NOT CONTAINED IN THIS PROSPECTUS. YOU MUST NOT
RELY ON ANY UNAUTHORIZED INFORMATION. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER TO SELL OR BUY ANY NOTES IN ANY JURISDICTION WHERE IT IS UNLAWFUL. THE
INFORMATION IN THIS PROSPECTUS IS CURRENT AS OF MAY , 1999, EXCEPT AS
OTHERWISE NOTED.
------------------------------
TABLE OF CONTENTS
------------------------------
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Where You Can Find More Information.. (iii)
Cautionary Notice Regarding Forward
Looking Statements................. (iv)
Summary.............................. 1
Risk Factors......................... 17
Use of Proceeds...................... 25
Exchange Offer....................... 25
Capitalization....................... 32
Selected Consolidated Historical
Financial Data..................... 33
Unaudited Condensed Consolidated Pro
Forma Financial Statements......... 35
Management's Discussion and Analysis
of Financial Condition and Results
of Operations...................... 43
Our Business......................... 57
Management........................... 71
Executive Compensation............... 76
Security Ownership of Certain
Beneficial Owners and Management... 79
Certain Relationships and
Transactions....................... 82
Description of Certain
Indebtedness....................... 84
Description of Notes................. 87
Registration Rights; Liquidated
Damages............................ 125
Plan of Distribution................. 127
Certain United States Federal Income
Tax Considerations................. 128
Legal Matters........................ 132
Experts.............................. 132
Index to Consolidated Financial
Statements......................... F-1
</TABLE>
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
$340,000,000
LOGO
FLORIDA PANTHERS HOLDINGS, INC.
9 7/8% SENIOR SUBORDINATED
NOTES DUE 2009
------------------
PROSPECTUS
------------------
MAY , 1999
- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 231
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Certificate of Incorporation, as amended provides that the Company
shall indemnify to the fullest extent permitted by Section 145 of the DGCL, each
person who is involved in any litigation or other proceeding because such person
is or was a director or officer of the Company, against all expense, loss or
liability reasonably incurred or suffered in connection therewith. The Bylaws,
as amended, provide that a director or officer may be paid expenses incurred in
defending any proceeding in advance of its final disposition upon receipt by the
Company of an undertaking, by or on behalf of the director or officer, to repay
all amounts so advanced if it is ultimately determined that such director or
officer is not entitled to indemnification.
Section 145 of the DGCL permits a corporation to indemnify any director or
officer of the corporation against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
in connection with any action, suit or proceeding brought by reason of the fact
that such person is or was a director or officer of the corporation, if such
person acted in good faith and in a manner that he reasonably believed to be in
or not opposed to the best interests of the corporation, and, with respect to
any criminal action or proceeding, if he had no reason to believe his conduct
was unlawful. In a derivative action, (i.e., one brought by or on behalf of the
corporation), indemnification may be made only for expenses, actually and
reasonably incurred by any director or officer in connection with the defense or
settlement of such an action or suit, if such person acted in good faith and in
a manner that he reasonably believed to be in or not opposed to the best
interests of the corporation, except that no indemnification shall be made if
such person shall have been adjudged to be liable to the corporation, unless and
only to the extent that the court in which the action or suit was brought shall
determine that the defendant is fairly and reasonably entitled to indemnity for
such expenses despite such adjudication of liability.
Pursuant to Section 102(b)(7) of the DGCL, the Certificate eliminates the
liability of a director to the corporation or its stockholders for monetary
damages for such breach of fiduciary duty as a director, except for liabilities
arising (i) from any breach of the director's duty of loyalty to the corporation
or its stockholders, (ii) from 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, or (iv) from any transaction from which the director
derived an improper personal benefit.
The Company has obtained primary and excess insurance policies insuring the
directors and officers of the Company and its subsidiaries against certain
liabilities they may incur in their capacity as directors and officers. Under
such policies, the insurer, on behalf of the Company, may also pay amounts for
which the Company has granted indemnification to the directors or officers.
Insofar as indemnification for liabilities arising under the Securities Act
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 Commission such indemnification is
against public policy as expressed in the Securities 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 Securities Act and will be governed by the final
adjudication of such issue.
II-1
<PAGE> 232
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
A. Exhibits
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ---------- -----------
<C> <S>
3.1 Certificate of Incorporation of the Company (incorporated by
reference to Exhibit 3.1 to the Company's Registration
Statement on Form S-4 -- SEC File No. 333-28951)
3.2 By-Laws of the Company (incorporated by reference to Exhibit
3.2 to the Company's Registration Statement on Form
S-4 -- SEC File No. 333-28951)
4.1 Form of 9 7/8% Senior Subordinated Notes to be issued upon
consummation of the Exchange Offer (included as part of the
Indenture filed as Exhibit 4.4 hereto)
4.2 Senior Subordinated Guarantees dated April 21, 1999 of the
Guarantors (included as part of the Indenture filed as
Exhibit 4.4 hereto)
4.3 Indenture dated April 21, 1999, between the Company, the
Guarantors and The Bank of New York, including table of
contents and cross-reference table
4.4 Registration Rights Agreement dated April 21, 1999, between
the Company, the Guarantors and the Initial Purchasers
4.5 Credit Agreement, dated as of April 21, 1999, by and among
the Florida Panthers Hotel Corporation, the Initial Lenders
named therein, Bear, Stearns & Co. Inc., as Syndication
Agent, and Bankers Trust Company, as Administrative Agent.
5.1 Opinion of Akerman, Senterfitt & Eidson, P.A.
12.1 Statement of Computation of Ratio of Earnings to Fixed
Charges
23.1 Consent of Arthur Andersen LLP
23.2 Consent of KPMG LLP
23.3 Consent of PricewaterhouseCoopers LLP
23.4 Consent of Ernst & Young LLP
23.5 Consent of Ernst & Young LLP
23.6 Consent of Akerman, Senterfitt & Eidson, P.A. (included in
Exhibit 5.1 above)
24.1 Powers of Attorney (included as part of the signature page
hereto)
25.1 Form T-1 Statement of Eligibility of Trustee
99.1 Letter of Transmittal relating to the Exchange Offer
99.2 Notice of Guaranteed Delivery relating to the Exchange Offer
</TABLE>
II-2
<PAGE> 233
ITEM 22. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, 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 the 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 the volume of securities offered (if the total dollar value
of the 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 a 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
on 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 the 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.
The undersigned registrant hereby undertakes to file an application for the
purpose of determining the eligibility of the trustee to act under subsection
(a) of Section 310 of the Trust Indenture Act in accordance with the rules and
regulations prescribed by the Commission under Section 305(b)(2) of the Act.
Insofar as indemnification for liabilities arising under the Securities Act
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 Securities 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 thereof in the
successful defense of any action, suit or proceeding) is asserted by a 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 of whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
II-3
<PAGE> 234
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Fort
Lauderdale, State of Florida, on the 6th day of May, 1999.
FLORIDA PANTHERS HOLDINGS, INC.
By: /s/ WILLIAM M. PIERCE
------------------------------------
William M. Pierce
Senior Vice President, Treasurer and
Chief Financial Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints William M. Pierce and Richard L. Handley as his
or her true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution, for him or her and in his or her name, place
and stead, in any and all capacities, to sign any and all amendments to this
Registration Statement on Form S-4 and to file the same with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorney-in-fact and agent full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the foregoing, as fully to all intents and
purposes as he or she might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent, or his substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ H. WAYNE HUIZENGA Chairman of the Board (Principal May 6, 1999
- ---------------------------------------- Executive Officer)
H. Wayne Huizenga
/s/ RICHARD C. ROCHON Vice Chairman and President May 6, 1999
- ----------------------------------------
Richard C. Rochon
/s/ WILLIAM M. PIERCE Senior Vice President, Treasurer and May 6, 1999
- ---------------------------------------- Chief Financial Officer (Principal
William M. Pierce Financial Officer)
/s/ STEVEN M. DAURIA Vice President and Corporate May 6, 1999
- ---------------------------------------- Controller (Principal Accounting
Steven M. Dauria Officer)
/s/ STEVEN R. BERRARD Director May 6, 1999
- ----------------------------------------
Steven R. Berrard
/s/ DENNIS J. CALLAGHAN Director May 6, 1999
- ----------------------------------------
Dennis J. Callaghan
</TABLE>
II-4
<PAGE> 235
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ MICHAEL S. EGAN Director May 6, 1999
- ----------------------------------------
Michael S. Egan
/s/ CHRIS EVERT Director May 6, 1999
- ----------------------------------------
Chris Evert
/s/ HARRIS W. HUDSON Director May 6, 1999
- ----------------------------------------
Harris W. Hudson
/s/ GEORGE D. JOHNSON, JR. Director May 6, 1999
- ----------------------------------------
George D. Johnson, Jr.
/s/ HENRY LATIMER Director May 6, 1999
- ----------------------------------------
Henry Latimer
</TABLE>
II-5
<PAGE> 236
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
co-registrant has duly caused this Registration Statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the city
of Fort Lauderdale, State of Florida on May 6, 1999.
2301 MGT., LTD.
By: 2301 SE 17TH ST, INC., general
partner
By: /s/ WILLIAM M. PIERCE
----------------------------------
William M. Pierce
Vice President and Sole Director
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints William M. Pierce and
Richard L. Handley, and each of them, his or her true and lawful name, place and
stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) to the Registration Statement on Form S-4, and to
file the same, with all Exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that each said attorneys-in-fact and agents or any of them or
their or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed on behalf of 2301 Mgt., Ltd.,
by the following persons in the capacities indicated below at 2301 SE 17th St,
Inc. and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ WILLIAM M. PIERCE Vice President and Sole Director May 6, 1999
- ---------------------------------------- (Principal Executive Officer)
William M. Pierce
/s/ STEVEN M. DAURIA Treasurer (Principal Financial and May 6, 1999
- ---------------------------------------- Accounting Officer)
Steven M. Dauria
</TABLE>
II-6
<PAGE> 237
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
co-registrant has duly caused this Registration Statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the city
of Fort Lauderdale, State of Florida on May 6, 1999.
2301 SE 17TH ST, INC.
By: /s/ WILLIAM M. PIERCE
------------------------------------
William M. Pierce
Vice President and Sole Director
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints William M. Pierce and
Richard L. Handley, and each of them, his or her true and lawful name, place and
stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) to the Registration Statement on Form S-4, and to
file the same, with all Exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that each said attorneys-in-fact and agents or any of them or
their or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ WILLIAM M. PIERCE Vice President and Sole Director May 6, 1999
- ---------------------------------------- (Principal Executive Officer)
William M. Pierce
/s/ STEVEN M. DAURIA Treasurer (Principal Financial and May 6, 1999
- ---------------------------------------- Accounting Officer)
Steven M. Dauria
</TABLE>
II-7
<PAGE> 238
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
co-registrant has duly caused this Registration Statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the city
of Fort Lauderdale, State of Florida on May 6, 1999.
2301 SE 17TH ST., LTD.
By: MGT., LTD., general partner
By: 2301 SE 17TH ST, INC., general
partner
By: /s/ WILLIAM M. PIERCE
----------------------------------
William M. Pierce
Vice President and Sole Director
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints William M. Pierce and
Richard L. Handley, and each of them, his or her true and lawful name, place and
stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) to the Registration Statement on Form S-4, and to
file the same, with all Exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that each said attorneys-in-fact and agents or any of them or
their or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed on behalf of 2301 SE 17th
St., Ltd., by the following persons in the capacities indicated below at 2301 SE
17th St, Inc. and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ WILLIAM M. PIERCE Vice President and Sole Director May 6, 1999
- ---------------------------------------- (Principal Executive Officer)
William M. Pierce
/s/ STEVEN M. DAURIA Treasurer (Principal Financial and May 6, 1999
- ---------------------------------------- Accounting Officer)
Steven M. Dauria
</TABLE>
II-8
<PAGE> 239
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
co-registrant has duly caused this Registration Statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the city
of Fort Lauderdale, State of Florida on May 6, 1999.
ARENA DEVELOPMENT COMPANY, INC.
By: /s/ WILLIAM M. PIERCE
------------------------------------
William M. Pierce
Vice President and Sole Director
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints William M. Pierce and
Richard L. Handley, and each of them, his or her true and lawful name, place and
stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) to the Registration Statement on Form S-4, and to
file the same, with all Exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that each said attorneys-in-fact and agents or any of them or
their or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ WILLIAM M. PIERCE Vice President and Sole Director May 6, 1999
- ---------------------------------------- (Principal Executive Officer)
William M. Pierce
/s/ STEVEN M. DAURIA Treasurer (Principal Financial and May 6, 1999
- ---------------------------------------- Accounting Officer)
Steven M. Dauria
</TABLE>
II-9
<PAGE> 240
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
co-registrant has duly caused this Registration Statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the city
of Fort Lauderdale, State of Florida on May 6, 1999.
ARENA DEVELOPMENT COMPANY, LTD.
By: ARENA DEVELOPMENT COMPANY, INC.,
general partner
By: /s/ WILLIAM M. PIERCE
----------------------------------
William M. Pierce
Vice President and Sole Director
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints William M. Pierce and
Richard L. Handley, and each of them, his or her true and lawful name, place and
stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) to the Registration Statement on Form S-4, and to
file the same, with all Exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that each said attorneys-in-fact and agents or any of them or
their or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed on behalf of Arena
Development Company, Ltd., by the following persons in the capacities indicated
below at Arena Development Company, Inc. and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ WILLIAM M. PIERCE Vice President and Sole Director May 6, 1999
- ---------------------------------------- (Principal Executive Officer)
William M. Pierce
/s/ STEVEN M. DAURIA Treasurer (Principal Financial and May 6, 1999
- ---------------------------------------- Accounting Officer)
Steven M. Dauria
</TABLE>
II-10
<PAGE> 241
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
co-registrant has duly caused this Registration Statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the city
of Fort Lauderdale, State of Florida on May 6, 1999.
ARENA OPERATING COMPANY, INC.
By: /s/ WILLIAM M. PIERCE
------------------------------------
William M. Pierce
Vice President and Sole Director
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints William M. Pierce and
Richard L. Handley, and each of them, his or her true and lawful name, place and
stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) to the Registration Statement on Form S-4, and to
file the same, with all Exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that each said attorneys-in-fact and agents or any of them or
their or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ WILLIAM M. PIERCE Vice President and Sole Director May 6, 1999
- ---------------------------------------- (Principal Executive Officer)
William M. Pierce
/s/ STEVEN M. DAURIA Treasurer (Principal Financial and May 6, 1999
- ---------------------------------------- Accounting Officer)
Steven M. Dauria
</TABLE>
II-11
<PAGE> 242
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
co-registrant has duly caused this Registration Statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the city
of Fort Lauderdale, State of Florida on May 6, 1999.
ARENA OPERATING COMPANY, LTD.
By: ARENA OPERATING COMPANY, INC.,
general partner
By: /s/ WILLIAM M. PIERCE
----------------------------------
William M. Pierce
Vice President and Sole Director
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints William M. Pierce and
Richard L. Handley, and each of them, his or her true and lawful name, place and
stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) to the Registration Statement on Form S-4, and to
file the same, with all Exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that each said attorneys-in-fact and agents or any of them or
their or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed on behalf of Arena Operating
Company, Ltd., by the following persons in the capacities indicated below at
Arena Operating Company, Inc. and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ WILLIAM M. PIERCE Vice President and Sole Director May 6, 1999
- ---------------------------------------- (Principal Executive Officer)
William M. Pierce
/s/ STEVEN M. DAURIA Treasurer (Principal Financial and May 6, 1999
- ---------------------------------------- Accounting Officer)
Steven M. Dauria
</TABLE>
II-12
<PAGE> 243
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
co-registrant has duly caused this Registration Statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the city
of Fort Lauderdale, State of Florida on May 6, 1999.
BILTMORE HOTEL PARTNERS, L.L.L.P.
By: WRIGHT-BILT CORP., general partner
By: /s/ WILLIAM M. PIERCE
----------------------------------
William M. Pierce
Vice President and Sole Director
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints William M. Pierce and
Richard L. Handley, and each of them, his or her true and lawful name, place and
stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) to the Registration Statement on Form S-4, and to
file the same, with all Exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that each said attorneys-in-fact and agents or any of them or
their or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed on behalf of Biltmore Hotel
Partners, L.L.L.P., by the following persons in the capacities indicated below
at Wright-Bilt Corp. and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ WILLIAM M. PIERCE Vice President and Sole Director May 6, 1999
- ---------------------------------------- (Principal Executive Officer)
William M. Pierce
/s/ STEVEN M. DAURIA Treasurer (Principal Financial and May 6, 1999
- ---------------------------------------- Accounting Officer)
Steven M. Dauria
</TABLE>
II-13
<PAGE> 244
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
co-registrant has duly caused this Registration Statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the city
of Fort Lauderdale, State of Florida on May 6, 1999.
BOCA BY DESIGN, INC.
By: /s/ WILLIAM M. PIERCE
------------------------------------
William M. Pierce
Vice President and Sole Director
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints William M. Pierce and
Richard L. Handley, and each of them, his or her true and lawful name, place and
stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) to the Registration Statement on Form S-4, and to
file the same, with all Exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that each said attorneys-in-fact and agents or any of them or
their or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ WILLIAM M. PIERCE Vice President and Sole Director May 6, 1999
- ---------------------------------------- (Principal Executive Officer)
William M. Pierce
/s/ STEVEN M. DAURIA Treasurer (Principal Financial and May 6, 1999
- ---------------------------------------- Accounting Officer)
Steven M. Dauria
</TABLE>
II-14
<PAGE> 245
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
co-registrant has duly caused this Registration Statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the city
of Fort Lauderdale, State of Florida on May 6, 1999.
BOCA RATON CATERERS, INC.
By: /s/ WILLIAM M. PIERCE
------------------------------------
William M. Pierce
Vice President and Sole Director
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints William M. Pierce and
Richard L. Handley, and each of them, his or her true and lawful name, place and
stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) to the Registration Statement on Form S-4, and to
file the same, with all Exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that each said attorneys-in-fact and agents or any of them or
their or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ WILLIAM M. PIERCE Vice President and Sole Director May 6, 1999
- ---------------------------------------- (Principal Executive Officer)
William M. Pierce
/s/ STEVEN M. DAURIA Treasurer (Principal Financial and May 6, 1999
- ---------------------------------------- Accounting Officer)
Steven M. Dauria
</TABLE>
II-15
<PAGE> 246
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
co-registrant has duly caused this Registration Statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the city
of Fort Lauderdale, State of Florida on May 6, 1999.
BOCA RATON RESORT AND CLUB, INC.
By: /s/ WILLIAM M. PIERCE
------------------------------------
William M. Pierce
Vice President and Sole Director
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints William M. Pierce and
Richard L. Handley, and each of them, his or her true and lawful name, place and
stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) to the Registration Statement on Form S-4, and to
file the same, with all Exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that each said attorneys-in-fact and agents or any of them or
their or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ WILLIAM M. PIERCE Vice President and Sole Director May 6, 1999
- ---------------------------------------- (Principal Executive Officer)
William M. Pierce
/s/ STEVEN M. DAURIA Treasurer (Principal Financial and May 6, 1999
- ---------------------------------------- Accounting Officer)
Steven M. Dauria
</TABLE>
II-16
<PAGE> 247
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
co-registrant has duly caused this Registration Statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the city
of Fort Lauderdale, State of Florida on May 6, 1999.
COYOTE HOLDINGS, INC.
By: /s/ WILLIAM M. PIERCE
------------------------------------
William M. Pierce
Vice President and Sole Director
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints William M. Pierce and
Richard L. Handley, and each of them, his or her true and lawful name, place and
stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) to the Registration Statement on Form S-4, and to
file the same, with all Exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that each said attorneys-in-fact and agents or any of them or
their or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ WILLIAM M. PIERCE Vice President and Sole Director May 6, 1999
- ---------------------------------------- (Principal Executive Officer)
William M. Pierce
/s/ STEVEN M. DAURIA Treasurer (Principal Financial and May 6, 1999
- ---------------------------------------- Accounting Officer)
Steven M. Dauria
</TABLE>
II-17
<PAGE> 248
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
co-registrant has duly caused this Registration Statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the city
of Fort Lauderdale, State of Florida on May 6, 1999.
DECOMA INVESTMENT, INC. I
By: /s/ WILLIAM M. PIERCE
------------------------------------
William M. Pierce
Vice President and Sole Director
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints William M. Pierce and
Richard L. Handley, and each of them, his or her true and lawful name, place and
stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) to the Registration Statement on Form S-4, and to
file the same, with all Exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that each said attorneys-in-fact and agents or any of them or
their or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ WILLIAM M. PIERCE Vice President and Sole Director May 6, 1999
- ---------------------------------------- (Principal Executive Officer)
William M. Pierce
/s/ STEVEN M. DAURIA Treasurer (Principal Financial and May 6, 1999
- ---------------------------------------- Accounting Officer)
Steven M. Dauria
</TABLE>
II-18
<PAGE> 249
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
co-registrant has duly caused this Registration Statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the city
of Fort Lauderdale, State of Florida on May 6, 1999.
DECOMA INVESTMENT, INC. II
By: /s/ WILLIAM M. PIERCE
------------------------------------
William M. Pierce
Vice President and Sole Director
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints William M. Pierce and
Richard L. Handley, and each of them, his or her true and lawful name, place and
stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) to the Registration Statement on Form S-4, and to
file the same, with all Exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that each said attorneys-in-fact and agents or any of them or
their or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ WILLIAM M. PIERCE Vice President and Sole Director May 6, 1999
- ---------------------------------------- (Principal Executive Officer)
William M. Pierce
/s/ STEVEN M. DAURIA Treasurer (Principal Financial and May 6, 1999
- ---------------------------------------- Accounting Officer)
Steven M. Dauria
</TABLE>
II-19
<PAGE> 250
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
co-registrant has duly caused this Registration Statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the city
of Fort Lauderdale, State of Florida on May 6, 1999.
DESERT JEWEL DESTINATIONS L.L.C.
By: BILTMORE HOTEL PARTNERS,
L.L.L.P., managing member
By: WRIGHT-BILT CORP.,
general partner
By: /s/ WILLIAM M. PIERCE
----------------------------------
William M. Pierce
Vice President and Sole Director
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints William M. Pierce and
Richard L. Handley, and each of them, his or her true and lawful name, place and
stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) to the Registration Statement on Form S-4, and to
file the same, with all Exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that each said attorneys-in-fact and agents or any of them or
their or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed on behalf of Desert Jewel
Destinations L.L.C., by the following persons in the capacities indicated below
at Wright-Bilt Corp. and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ WILLIAM M. PIERCE Vice President and Sole Director May 6, 1999
- ---------------------------------------- (Principal Executive Officer)
William M. Pierce
/s/ STEVEN M. DAURIA Treasurer (Principal Financial and May 6, 1999
- ---------------------------------------- Accounting Officer)
Steven M. Dauria
</TABLE>
II-20
<PAGE> 251
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
co-registrant has duly caused this Registration Statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the city
of Fort Lauderdale, State of Florida on May 6, 1999.
FLORIDA GOLF MANAGEMENT, INC.
By: /s/ WILLIAM M. PIERCE
------------------------------------
William M. Pierce
Vice President and Sole Director
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints William M. Pierce and
Richard L. Handley, and each of them, his or her true and lawful name, place and
stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) to the Registration Statement on Form S-4, and to
file the same, with all Exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that each said attorneys-in-fact and agents or any of them or
their or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ WILLIAM M. PIERCE Vice President and Sole Director May 6, 1999
- ---------------------------------------- (Principal Executive Officer)
William M. Pierce
/s/ STEVEN M. DAURIA Treasurer (Principal Financial and May 6, 1999
- ---------------------------------------- Accounting Officer)
Steven M. Dauria
</TABLE>
II-21
<PAGE> 252
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
co-registrant has duly caused this Registration Statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the city
of Fort Lauderdale, State of Florida on May 6, 1999.
FLORIDA HOSPITALITY SERVICES, INC.
By: /s/ WILLIAM M. PIERCE
------------------------------------
William M. Pierce
Vice President and Sole Director
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints William M. Pierce and
Richard L. Handley, and each of them, his or her true and lawful name, place and
stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) to the Registration Statement on Form S-4, and to
file the same, with all Exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that each said attorneys-in-fact and agents or any of them or
their or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ WILLIAM M. PIERCE Vice President and Sole Director May 6, 1999
- ---------------------------------------- (Principal Executive Officer)
William M. Pierce
/s/ STEVEN M. DAURIA Treasurer (Principal Financial and May 6, 1999
- ---------------------------------------- Accounting Officer)
Steven M. Dauria
</TABLE>
II-22
<PAGE> 253
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
co-registrant has duly caused this Registration Statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the city
of Fort Lauderdale, State of Florida on May 6, 1999.
FLORIDA PANTHERS HOCKEY CLUB, INC.
By: /s/ WILLIAM M. PIERCE
------------------------------------
William M. Pierce
Vice President and Sole Director
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints William M. Pierce and
Richard L. Handley, and each of them, his or her true and lawful name, place and
stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) to the Registration Statement on Form S-4, and to
file the same, with all Exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that each said attorneys-in-fact and agents or any of them or
their or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ WILLIAM M. PIERCE Vice President and Sole Director May 6, 1999
- ---------------------------------------- (Principal Executive Officer)
William M. Pierce
/s/ STEVEN M. DAURIA Treasurer (Principal Financial and May 6, 1999
- ---------------------------------------- Accounting Officer)
Steven M. Dauria
</TABLE>
II-23
<PAGE> 254
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
co-registrant has duly caused this Registration Statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the city
of Fort Lauderdale, State of Florida on May 6, 1999.
FLORIDA PANTHERS HOCKEY CLUB, LTD.
By: FLORIDA PANTHERS HOCKEY
CLUB, INC., general partner
By: /s/ WILLIAM M. PIERCE
----------------------------------
William M. Pierce
Vice President and Sole Director
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints William M. Pierce and
Richard L. Handley, and each of them, his or her true and lawful name, place and
stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) to the Registration Statement on Form S-4, and to
file the same, with all Exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that each said attorneys-in-fact and agents or any of them or
their or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed on behalf of Florida Panthers
Hockey Club, Ltd., by the following persons in the capacities indicated below at
Florida Panthers Hockey Club, Inc. and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ WILLIAM M. PIERCE Vice President and Sole Director May 6, 1999
- ---------------------------------------- (Principal Executive Officer)
William M. Pierce
/s/ STEVEN M. DAURIA Treasurer (Principal Financial and May 6, 1999
- ---------------------------------------- Accounting Officer)
Steven M. Dauria
</TABLE>
II-24
<PAGE> 255
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
co-registrant has duly caused this Registration Statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the city
of Fort Lauderdale, State of Florida on May 6, 1999.
FLORIDA PANTHERS HOTEL CORPORATION
By: /s/ WILLIAM M. PIERCE
------------------------------------
William M. Pierce
Vice President and Sole Director
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints William M. Pierce and
Richard L. Handley, and each of them, his or her true and lawful name, place and
stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) to the Registration Statement on Form S-4, and to
file the same, with all Exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that each said attorneys-in-fact and agents or any of them or
their or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ WILLIAM M. PIERCE Vice President and Sole Director May 6, 1999
- ---------------------------------------- (Principal Executive Officer)
William M. Pierce
/s/ STEVEN M. DAURIA Treasurer (Principal Financial and May 6, 1999
- ---------------------------------------- Accounting Officer)
Steven M. Dauria
</TABLE>
II-25
<PAGE> 256
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
co-registrant has duly caused this Registration Statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the city
of Fort Lauderdale, State of Florida on May 6, 1999.
FLORIDA PANTHERS ICE VENTURES, INC.
By: /s/ WILLIAM M. PIERCE
------------------------------------
William M. Pierce
Vice President and Sole Director
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints William M. Pierce and
Richard L. Handley, and each of them, his or her true and lawful name, place and
stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) to the Registration Statement on Form S-4, and to
file the same, with all Exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that each said attorneys-in-fact and agents or any of them or
their or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ WILLIAM M. PIERCE Vice President and Sole Director May 6, 1999
- ---------------------------------------- (Principal Executive Officer)
William M. Pierce
/s/ STEVEN M. DAURIA Treasurer (Principal Financial and May 6, 1999
- ---------------------------------------- Accounting Officer)
Steven M. Dauria
</TABLE>
II-26
<PAGE> 257
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
co-registrant has duly caused this Registration Statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the city
of Fort Lauderdale, State of Florida on May 6, 1999.
FLORIDA PANTHERS NAPLES, INC.
By: /s/ WILLIAM M. PIERCE
------------------------------------
William M. Pierce
Vice President and Sole Director
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints William M. Pierce and
Richard L. Handley, and each of them, his or her true and lawful name, place and
stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) to the Registration Statement on Form S-4, and to
file the same, with all Exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that each said attorneys-in-fact and agents or any of them or
their or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ WILLIAM M. PIERCE Vice President and Sole Director May 6, 1999
- ---------------------------------------- (Principal Executive Officer)
William M. Pierce
/s/ STEVEN M. DAURIA Treasurer (Principal Financial and May 6, 1999
- ---------------------------------------- Accounting Officer)
Steven M. Dauria
</TABLE>
II-27
<PAGE> 258
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
co-registrant has duly caused this Registration Statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the city
of Fort Lauderdale, State of Florida on May 6, 1999.
FPH MANAGEMENT, INC.
By: /s/ WILLIAM M. PIERCE
------------------------------------
William M. Pierce
Vice President and Sole Director
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints William M. Pierce and
Richard L. Handley, and each of them, his or her true and lawful name, place and
stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) to the Registration Statement on Form S-4, and to
file the same, with all Exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that each said attorneys-in-fact and agents or any of them or
their or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ WILLIAM M. PIERCE Vice President and Sole Director May 6, 1999
- ---------------------------------------- (Principal Executive Officer)
William M. Pierce
/s/ STEVEN M. DAURIA Treasurer (Principal Financial and May 6, 1999
- ---------------------------------------- Accounting Officer)
Steven M. Dauria
</TABLE>
II-28
<PAGE> 259
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
co-registrant has duly caused this Registration Statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the city
of Fort Lauderdale, State of Florida on May 6, 1999.
FPH/RHI MERGER CORP., INC.
By: /s/ WILLIAM M. PIERCE
------------------------------------
William M. Pierce
Vice President and Sole Director
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints William M. Pierce and
Richard L. Handley, and each of them, his or her true and lawful name, place and
stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) to the Registration Statement on Form S-4, and to
file the same, with all Exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that each said attorneys-in-fact and agents or any of them or
their or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ WILLIAM M. PIERCE Vice President and Sole Director May 6, 1999
- ---------------------------------------- (Principal Executive Officer)
William M. Pierce
/s/ STEVEN M. DAURIA Treasurer (Principal Financial and May 6, 1999
- ---------------------------------------- Accounting Officer)
Steven M. Dauria
</TABLE>
II-29
<PAGE> 260
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
co-registrant has duly caused this Registration Statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the city
of Fort Lauderdale, State of Florida on May 6, 1999.
LEHILL PARTNERS L.P.
By: PELICAN HILL ASSOCIATES, L.P.,
general partner
By: RESORTHILL, INC., general
partner
By: /s/ WILLIAM M. PIERCE
----------------------------------
Vice President and Sole Director
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints William M. Pierce and
Richard L. Handley, and each of them, his or her true and lawful name, place and
stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) to the Registration Statement on Form S-4, and to
file the same, with all Exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that each said attorneys-in-fact and agents or any of them or
their or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed on behalf of LeHill Partners
L.P., by the following persons in the capacities indicated below at ResortHill,
Inc. and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ WILLIAM M. PIERCE Vice President and Sole Director May 6, 1999
- ---------------------------------------- (Principal Executive Officer)
William M. Pierce
/s/ STEVEN M. DAURIA Treasurer (Principal Financial and May 6, 1999
- ---------------------------------------- Accounting Officer)
Steven M. Dauria
</TABLE>
II-30
<PAGE> 261
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
co-registrant has duly caused this Registration Statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the city
of Fort Lauderdale, State of Florida on May 6, 1999.
MIZNER CENTER, INC.
By: /s/ WILLIAM M. PIERCE
------------------------------------
William M. Pierce
Vice President and Sole Director
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints William M. Pierce and
Richard L. Handley, and each of them, his or her true and lawful name, place and
stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) to the Registration Statement on Form S-4, and to
file the same, with all Exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that each said attorneys-in-fact and agents or any of them or
their or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ WILLIAM M. PIERCE Vice President and Sole Director May 6, 1999
- ---------------------------------------- (Principal Executive Officer)
William M. Pierce
/s/ STEVEN M. DAURIA Treasurer (Principal Financial and May 6, 1999
- ---------------------------------------- Accounting Officer)
Steven M. Dauria
</TABLE>
II-31
<PAGE> 262
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
co-registrant has duly caused this Registration Statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the city
of Fort Lauderdale, State of Florida on May 6, 1999.
PANTHERS AHL HOCKEY CORP.
By: /s/ WILLIAM M. PIERCE
------------------------------------
William M. Pierce
Vice President and Sole Director
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints William M. Pierce and
Richard L. Handley, and each of them, his or her true and lawful name, place and
stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) to the Registration Statement on Form S-4, and to
file the same, with all Exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that each said attorneys-in-fact and agents or any of them or
their or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ WILLIAM M. PIERCE Vice President and Sole Director May 6, 1999
- ---------------------------------------- (Principal Executive Officer)
William M. Pierce
/s/ STEVEN M. DAURIA Treasurer (Principal Financial and May 6, 1999
- ---------------------------------------- Accounting Officer)
Steven M. Dauria
</TABLE>
II-32
<PAGE> 263
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
co-registrant has duly caused this Registration Statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the city
of Fort Lauderdale, State of Florida on May 6, 1999.
PANTHERS BOCA GENERAL PARTNER, INC.
By: /s/ WILLIAM M. PIERCE
------------------------------------
William M. Pierce
Vice President and Sole Director
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints William M. Pierce and
Richard L. Handley, and each of them, his or her true and lawful name, place and
stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) to the Registration Statement on Form S-4, and to
file the same, with all Exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that each said attorneys-in-fact and agents or any of them or
their or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ WILLIAM M. PIERCE Vice President and Sole Director May 6, 1999
- ---------------------------------------- (Principal Executive Officer)
William M. Pierce
/s/ STEVEN M. DAURIA Treasurer (Principal Financial and May 6, 1999
- ---------------------------------------- Accounting Officer)
Steven M. Dauria
</TABLE>
II-33
<PAGE> 264
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
co-registrant has duly caused this Registration Statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the city
of Fort Lauderdale, State of Florida on May 6, 1999.
PANTHERS BOCA LIMITED PARTNER, INC.
By: /s/ WILLIAM M. PIERCE
------------------------------------
William M. Pierce
Vice President and Sole Director
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints William M. Pierce and
Richard L. Handley, and each of them, his or her true and lawful name, place and
stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) to the Registration Statement on Form S-4, and to
file the same, with all Exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that each said attorneys-in-fact and agents or any of them or
their or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ WILLIAM M. PIERCE Vice President and Sole Director May 6, 1999
- ---------------------------------------- (Principal Executive Officer)
William M. Pierce
/s/ STEVEN M. DAURIA Treasurer (Principal Financial and May 6, 1999
- ---------------------------------------- Accounting Officer)
Steven M. Dauria
</TABLE>
II-34
<PAGE> 265
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
co-registrant has duly caused this Registration Statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the city
of Fort Lauderdale, State of Florida on May 6, 1999.
PANTHERS BRGP CORPORATION
By: /s/ WILLIAM M. PIERCE
------------------------------------
William M. Pierce
Vice President and Sole Director
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints William M. Pierce and
Richard L. Handley, and each of them, his or her true and lawful name, place and
stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) to the Registration Statement on Form S-4, and to
file the same, with all Exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that each said attorneys-in-fact and agents or any of them or
their or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ WILLIAM M. PIERCE Vice President and Sole Director May 6, 1999
- ---------------------------------------- (Principal Executive Officer)
William M. Pierce
/s/ STEVEN M. DAURIA Treasurer (Principal Financial and May 6, 1999
- ---------------------------------------- Accounting Officer)
Steven M. Dauria
</TABLE>
II-35
<PAGE> 266
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
co-registrant has duly caused this Registration Statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the city
of Fort Lauderdale, State of Florida on May 6, 1999.
PANTHERS BRHC LIMITED
By: PANTHERS BRGP CORPORATION,
general partner
By: /s/ WILLIAM M. PIERCE
----------------------------------
William M. Pierce
Vice President and Sole Director
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints William M. Pierce and
Richard L. Handley, and each of them, his or her true and lawful name, place and
stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) to the Registration Statement on Form S-4, and to
file the same, with all Exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that each said attorneys-in-fact and agents or any of them or
their or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed on behalf of Panthers BRHC
Limited, by the following persons in the capacities indicated below at Panthers
BRGP Corporation and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ WILLIAM M. PIERCE Vice President and Sole Director May 6, 1999
- ---------------------------------------- (Principal Executive Officer)
William M. Pierce
/s/ STEVEN M. DAURIA Treasurer (Principal Financial and May 6, 1999
- ---------------------------------------- Accounting Officer)
Steven M. Dauria
</TABLE>
II-36
<PAGE> 267
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
co-registrant has duly caused this Registration Statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the city
of Fort Lauderdale, State of Florida on May 6, 1999.
PANTHERS BRHC MANAGEMENT
CORPORATION
By: /s/ WILLIAM M. PIERCE
------------------------------------
William M. Pierce
Vice President and Sole Director
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints William M. Pierce and
Richard L. Handley, and each of them, his or her true and lawful name, place and
stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) to the Registration Statement on Form S-4, and to
file the same, with all Exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that each said attorneys-in-fact and agents or any of them or
their or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ WILLIAM M. PIERCE Vice President and Sole Director May 6, 1999
- ---------------------------------------- (Principal Executive Officer)
William M. Pierce
/s/ STEVEN M. DAURIA Treasurer (Principal Financial and May 6, 1999
- ---------------------------------------- Accounting Officer)
Steven M. Dauria
</TABLE>
II-37
<PAGE> 268
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
co-registrant has duly caused this Registration Statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the city
of Fort Lauderdale, State of Florida on May 6, 1999.
PANTHERS BRLP CORPORATION
By: /s/ WILLIAM M. PIERCE
------------------------------------
William M. Pierce
Vice President and Sole Director
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints William M. Pierce and
Richard L. Handley, and each of them, his or her true and lawful name, place and
stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) to the Registration Statement on Form S-4, and to
file the same, with all Exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that each said attorneys-in-fact and agents or any of them or
their or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ WILLIAM M. PIERCE Vice President and Sole Director May 6, 1999
- ---------------------------------------- (Principal Executive Officer)
William M. Pierce
/s/ STEVEN M. DAURIA Treasurer (Principal Financial and May 6, 1999
- ---------------------------------------- Accounting Officer)
Steven M. Dauria
</TABLE>
II-38
<PAGE> 269
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
co-registrant has duly caused this Registration Statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the city
of Fort Lauderdale, State of Florida on May 6, 1999.
PANTHERS EDGEWATER RESORT, INC.
By: /s/ WILLIAM M. PIERCE
------------------------------------
William M. Pierce
Vice President and Sole Director
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints William M. Pierce and
Richard L. Handley, and each of them, his or her true and lawful name, place and
stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) to the Registration Statement on Form S-4, and to
file the same, with all Exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that each said attorneys-in-fact and agents or any of them or
their or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ WILLIAM M. PIERCE Vice President and Sole Director May 6, 1999
- ---------------------------------------- (Principal Executive Officer)
William M. Pierce
/s/ STEVEN M. DAURIA Treasurer (Principal Financial and May 6, 1999
- ---------------------------------------- Accounting Officer)
Steven M. Dauria
</TABLE>
II-39
<PAGE> 270
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
co-registrant has duly caused this Registration Statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the city
of Fort Lauderdale, State of Florida on May 6, 1999.
PANTHERS GREY OAKS, INC.
By: /s/ WILLIAM M. PIERCE
------------------------------------
William M. Pierce
Vice President and Sole Director
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints William M. Pierce and
Richard L. Handley, and each of them, his or her true and lawful name, place and
stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) to the Registration Statement on Form S-4, and to
file the same, with all Exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that each said attorneys-in-fact and agents or any of them or
their or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ WILLIAM M. PIERCE Vice President and Sole Director May 6, 1999
- ---------------------------------------- (Principal Executive Officer)
William M. Pierce
/s/ STEVEN M. DAURIA Treasurer (Principal Financial and May 6, 1999
- ---------------------------------------- Accounting Officer)
Steven M. Dauria
</TABLE>
II-40
<PAGE> 271
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
co-registrant has duly caused this Registration Statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the city
of Fort Lauderdale, State of Florida on May 6, 1999.
PANTHERS PLANTATION GOLF, INC.
By: /s/ WILLIAM M. PIERCE
------------------------------------
William M. Pierce
Vice President and Sole Director
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints William M. Pierce and
Richard L. Handley, and each of them, his or her true and lawful name, place and
stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) to the Registration Statement on Form S-4, and to
file the same, with all Exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that each said attorneys-in-fact and agents or any of them or
their or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ WILLIAM M. PIERCE Vice President and Sole Director May 6, 1999
- ---------------------------------------- (Principal Executive Officer)
William M. Pierce
/s/ STEVEN M. DAURIA Treasurer (Principal Financial and May 6, 1999
- ---------------------------------------- Accounting Officer)
Steven M. Dauria
</TABLE>
II-41
<PAGE> 272
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
co-registrant has duly caused this Registration Statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the city
of Fort Lauderdale, State of Florida on May 6, 1999.
PANTHERS RPN LIMITED
By: PANTHERS EDGEWATER RESORT,
INC., general partner
By: /s/ WILLIAM M. PIERCE
----------------------------------
William M. Pierce
Vice President and Sole Director
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints William M. Pierce and
Richard L. Handley, and each of them, his or her true and lawful name, place and
stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) to the Registration Statement on Form S-4, and to
file the same, with all Exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that each said attorneys-in-fact and agents or any of them or
their or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed on behalf of Panthers RPN
Limited, by the following persons in the capacities indicated below at Panthers
Edgewater Resort, Inc. and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ WILLIAM M. PIERCE Vice President and Sole Director May 6, 1999
- ---------------------------------------- (Principal Executive Officer)
William M. Pierce
/s/ STEVEN M. DAURIA Treasurer (Principal Financial and May 6, 1999
- ---------------------------------------- Accounting Officer)
Steven M. Dauria
</TABLE>
II-42
<PAGE> 273
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
co-registrant has duly caused this Registration Statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the city
of Fort Lauderdale, State of Florida on May 6, 1999.
PELICAN HILL ASSOCIATES, L.P.
By: RESORTHILL, INC., general partner
By: /s/ WILLIAM M. PIERCE
----------------------------------
William M. Pierce
Vice President and Sole Director
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints William M. Pierce and
Richard L. Handley, and each of them, his or her true and lawful name, place and
stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) to the Registration Statement on Form S-4, and to
file the same, with all Exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that each said attorneys-in-fact and agents or any of them or
their or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed on behalf of Pelican Hill
Associates, L.P., by the following persons in the capacities indicated below at
ResortHill, Inc. and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ WILLIAM M. PIERCE Vice President and Sole Director May 6, 1999
- ---------------------------------------- (Principal Executive Officer)
William M. Pierce
/s/ STEVEN M. DAURIA Treasurer (Principal Financial and May 6, 1999
- ---------------------------------------- Accounting Officer)
Steven M. Dauria
</TABLE>
II-43
<PAGE> 274
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
co-registrant has duly caused this Registration Statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the city
of Fort Lauderdale, State of Florida on May 6, 1999.
PER, L.L.C.
By: PANTHERS EDGEWATER RESORT,
INC., managing member
By: /s/ WILLIAM M. PIERCE
----------------------------------
William M. Pierce
Vice President and Sole Director
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints William M. Pierce and
Richard L. Handley, and each of them, his or her true and lawful name, place and
stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) to the Registration Statement on Form S-4, and to
file the same, with all Exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that each said attorneys-in-fact and agents or any of them or
their or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed on behalf of PER, L.L.C., by
the following persons in the capacities indicated below at Panthers Edgewater
Resort, Inc. and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ WILLIAM M. PIERCE Vice President and Sole Director May 6, 1999
- ---------------------------------------- (Principal Executive Officer)
William M. Pierce
/s/ STEVEN M. DAURIA Treasurer (Principal Financial and May 6, 1999
- ---------------------------------------- Accounting Officer)
Steven M. Dauria
</TABLE>
II-44
<PAGE> 275
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
co-registrant has duly caused this Registration Statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the city
of Fort Lauderdale, State of Florida on May 6, 1999.
RAHN BAHIA, INC.
By: /s/ WILLIAM M. PIERCE
------------------------------------
William M. Pierce
Vice President and Sole Director
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints William M. Pierce and
Richard L. Handley, and each of them, his or her true and lawful name, place and
stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) to the Registration Statement on Form S-4, and to
file the same, with all Exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that each said attorneys-in-fact and agents or any of them or
their or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ WILLIAM M. PIERCE Vice President and Sole Director May 6, 1999
- ---------------------------------------- (Principal Executive Officer)
William M. Pierce
/s/ STEVEN M. DAURIA Treasurer (Principal Financial and May 6, 1999
- ---------------------------------------- Accounting Officer)
Steven M. Dauria
</TABLE>
II-45
<PAGE> 276
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
co-registrant has duly caused this Registration Statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the city
of Fort Lauderdale, State of Florida on May 6, 1999.
RAHN BAHIA MAR, G.P., LTD.
By: RAHN BAHIA MAR, INC.,
general partner
By: /s/ WILLIAM M. PIERCE
----------------------------------
William M. Pierce
Vice President and Sole Director
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints William M. Pierce and
Richard L. Handley, and each of them, his or her true and lawful name, place and
stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) to the Registration Statement on Form S-4, and to
file the same, with all Exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that each said attorneys-in-fact and agents or any of them or
their or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed on behalf of Rahn Bahia Mar,
G.P., Ltd., by the following persons in the capacities indicated below at Rahn
Bahia Mar, Inc. and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ WILLIAM M. PIERCE Vice President and Sole Director May 6, 1999
- ---------------------------------------- (Principal Executive Officer)
William M. Pierce
/s/ STEVEN M. DAURIA Treasurer (Principal Financial and May 6, 1999
- ---------------------------------------- Accounting Officer)
Steven M. Dauria
</TABLE>
II-46
<PAGE> 277
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
co-registrant has duly caused this Registration Statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the city
of Fort Lauderdale, State of Florida on May 6, 1999.
RAHN BAHIA MAR, INC.
By: /s/ WILLIAM M. PIERCE
------------------------------------
William M. Pierce
Vice President and Sole Director
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints William M. Pierce and
Richard L. Handley, and each of them, his or her true and lawful name, place and
stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) to the Registration Statement on Form S-4, and to
file the same, with all Exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that each said attorneys-in-fact and agents or any of them or
their or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ WILLIAM M. PIERCE Vice President and Sole Director May 6, 1999
- ---------------------------------------- (Principal Executive Officer)
William M. Pierce
/s/ STEVEN M. DAURIA Treasurer (Principal Financial and May 6, 1999
- ---------------------------------------- Accounting Officer)
Steven M. Dauria
</TABLE>
II-47
<PAGE> 278
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
co-registrant has duly caused this Registration Statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the city
of Fort Lauderdale, State of Florida on May 6, 1999.
RAHN BAHIA MAR, LTD.
By: RAHN BAHIA MAR, G.P., LTD.,
general partner
By: RAHN BAHIA MAR, INC.,
general partner
By: /s/ WILLIAM M. PIERCE
----------------------------------
William M. Pierce
Vice President and Sole Director
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints William M. Pierce and
Richard L. Handley, and each of them, his or her true and lawful name, place and
stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) to the Registration Statement on Form S-4, and to
file the same, with all Exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that each said attorneys-in-fact and agents or any of them or
their or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed on behalf of Rahn Bahia Mar,
Ltd., by the following persons in the capacities indicated below at Rahn Bahia
Mar, Inc. and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ WILLIAM M. PIERCE Vice President and Sole Director May 6, 1999
- ---------------------------------------- (Principal Executive Officer)
William M. Pierce
/s/ STEVEN M. DAURIA Treasurer (Principal Financial and May 6, 1999
- ---------------------------------------- Accounting Officer)
Steven M. Dauria
</TABLE>
II-48
<PAGE> 279
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
co-registrant has duly caused this Registration Statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the city
of Fort Lauderdale, State of Florida on May 6, 1999.
RAHN BAHIA MAR MGMT., INC.
By: /s/ WILLIAM M. PIERCE
------------------------------------
William M. Pierce
Vice President and Sole Director
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints William M. Pierce and
Richard L. Handley, and each of them, his or her true and lawful name, place and
stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) to the Registration Statement on Form S-4, and to
file the same, with all Exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that each said attorneys-in-fact and agents or any of them or
their or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ WILLIAM M. PIERCE Vice President and Sole Director May 6, 1999
- ---------------------------------------- (Principal Executive Officer)
William M. Pierce
/s/ STEVEN M. DAURIA Treasurer (Principal Financial and May 6, 1999
- ---------------------------------------- Accounting Officer)
Steven M. Dauria
</TABLE>
II-49
<PAGE> 280
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
co-registrant has duly caused this Registration Statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the city
of Fort Lauderdale, State of Florida on May 6, 1999.
RAHN PIER, INC.
By: /s/ WILLIAM M. PIERCE
------------------------------------
William M. Pierce
Vice President and Sole Director
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints William M. Pierce and
Richard L. Handley, and each of them, his or her true and lawful name, place and
stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) to the Registration Statement on Form S-4, and to
file the same, with all Exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that each said attorneys-in-fact and agents or any of them or
their or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ WILLIAM M. PIERCE Vice President and Sole Director May 6, 1999
- ---------------------------------------- (Principal Executive Officer)
William M. Pierce
/s/ STEVEN M. DAURIA Treasurer (Principal Financial and May 6, 1999
- ---------------------------------------- Accounting Officer)
Steven M. Dauria
</TABLE>
II-50
<PAGE> 281
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
co-registrant has duly caused this Registration Statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the city
of Fort Lauderdale, State of Florida on May 6, 1999.
RAHN PIER MGT., INC.
By: /s/ WILLIAM M. PIERCE
------------------------------------
William M. Pierce
Vice President and Sole Director
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints William M. Pierce and
Richard L. Handley, and each of them, his or her true and lawful name, place and
stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) to the Registration Statement on Form S-4, and to
file the same, with all Exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that each said attorneys-in-fact and agents or any of them or
their or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ WILLIAM M. PIERCE Vice President and Sole Director May 6, 1999
- ---------------------------------------- (Principal Executive Officer)
William M. Pierce
/s/ STEVEN M. DAURIA Treasurer (Principal Financial and May 6, 1999
- ---------------------------------------- Accounting Officer)
Steven M. Dauria
</TABLE>
II-51
<PAGE> 282
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
co-registrant has duly caused this Registration Statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the city
of Fort Lauderdale, State of Florida on May 6, 1999.
RESORTHILL, INC.
By: /s/ WILLIAM M. PIERCE
------------------------------------
William M. Pierce
Vice President and Sole Director
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints William M. Pierce and
Richard L. Handley, and each of them, his or her true and lawful name, place and
stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) to the Registration Statement on Form S-4, and to
file the same, with all Exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that each said attorneys-in-fact and agents or any of them or
their or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ WILLIAM M. PIERCE Vice President and Sole Director May 6, 1999
- ---------------------------------------- (Principal Executive Officer)
William M. Pierce
/s/ STEVEN M. DAURIA Treasurer (Principal Financial and May 6, 1999
- ---------------------------------------- Accounting Officer)
Steven M. Dauria
</TABLE>
II-52
<PAGE> 283
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
co-registrant has duly caused this Registration Statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the city
of Fort Lauderdale, State of Florida on May 6, 1999.
WRIGHT-BILT CORP.
By: /s/ WILLIAM M. PIERCE
------------------------------------
William M. Pierce
Vice President and Sole Director
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints William M. Pierce and
Richard L. Handley, and each of them, his or her true and lawful name, place and
stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) to the Registration Statement on Form S-4, and to
file the same, with all Exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that each said attorneys-in-fact and agents or any of them or
their or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ WILLIAM M. PIERCE Vice President and Sole Director May 6, 1999
- ---------------------------------------- (Principal Executive Officer)
William M. Pierce
/s/ STEVEN M. DAURIA Treasurer (Principal Financial and May 6, 1999
- ---------------------------------------- Accounting Officer)
Steven M. Dauria
</TABLE>
II-53
<PAGE> 284
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ---------- -----------
<C> <S>
3.1 Certificate of Incorporation of the Company (incorporated by
reference to Exhibit 3.1 to the Company's Registration
Statement on Form S-4 -- SEC File No. 333-28951).
3.2 By-Laws of the Company (incorporated by reference to Exhibit
3.2 to the Company's Registration Statement on Form
S-4 -- SEC File No. 333-28951).
4.1 Form of 9 7/8% Senior Subordinated Notes to be issued upon
consummation of the Exchange Offer (included as part of the
Indenture at Exhibit 4.4 hereto).
4.2 Senior Subordinated Guarantees dated April 21, 1999 of the
Guarantors (included as part of the Indenture filed as
Exhibit 4.4 hereto).
4.3 Indenture dated April 21, 1999, between the Company, the
Guarantors and The Bank of New York, including table of
contents and cross-reference table.
4.4 Registration Rights Agreement dated April 21, 1999, between
the Company, the Guarantors and the Initial Purchasers.
4.5 Credit Agreement, dated as of April 21, 1999, by and among
the Florida Panthers Hotel Corporation, the Initial Lenders
named therein, Bear, Stearns & Co. Inc., as Syndication
Agent and Bankers Trust Company, as Administrative Agent.
5.1 Opinion of Akerman, Senterfitt & Eidson, P.A.
12.1 Statement of Computation of Ratio of Earnings to Fixed
Charges
23.1 Consent of Arthur Andersen LLP
23.2 Consent of KPMG LLP
23.3 Consent of PricewaterhouseCoopers LLP
23.4 Consent of Ernst & Young LLP
23.5 Consent of Ernst & Young LLP
23.6 Consent of Akerman, Senterfitt & Eidson, P.A. (included in
Exhibit 5.1 above)
24.1 Powers of Attorney (included as part of the signature page
hereto)
25.1 Form T-1 Statement of Eligibility of Trustee
99.1 Letter of Transmittal relating to the Exchange Offer.
99.2 Notice of Guaranteed Delivery relating to the Exchange
Offer.
</TABLE>
II-54
<PAGE> 1
Exhibit 4.3
- --------------------------------------------------------------------------------
FLORIDA PANTHERS HOLDINGS, INC.
$340,000,000
9 7/8% SENIOR SUBORDINATED NOTES DUE 2009
--------------------------
INDENTURE
Dated as of April 21, 1999
--------------------------
THE BANK OF NEW YORK
Trustee
--------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
Trust Indenture
Act Section Indenture Section
<S> <C>
310(a)(1)............................................................................... 7.10
(a)(2)............................................................................... 7.10
(a)(3)............................................................................... N.A.
(a)(4)............................................................................... N.A.
(a)(5)............................................................................... 7.10
(b).................................................................................. 7.10
(c).................................................................................. N.A.
311(a).................................................................................. 7.11
(b).................................................................................. 7.11
(c).................................................................................. N.A.
312(a).................................................................................. 2.05
(b).................................................................................. 11.03
(c).................................................................................. 11.03
313(a).................................................................................. 7.06
(b)(1)............................................................................... 10.03
(b)(2)............................................................................... 7.07
(c).................................................................................. 7.06;11.02
(d).................................................................................. 7.06
314(a).................................................................................. 4.03;11.02
(b).................................................................................. 10.02
(c)(1)............................................................................... 11.04
(c)(2)............................................................................... 11.04
(c)(3)............................................................................... N.A.
(d).................................................................................. N.A.
(e).................................................................................. 11.05
(f).................................................................................. N.A.
315(a).................................................................................. 7.01
(b).................................................................................. 7.05,11.02
(c).................................................................................. 7.01
(d).................................................................................. 7.01
(e).................................................................................. 6.11
316(a) (last sentence).................................................................. 2.09
(a)(1)(A)............................................................................ 6.05
(a)(1)(B)............................................................................ 6.04
(a)(2)............................................................................... N.A.
(b).................................................................................. 6.07
(c).................................................................................. 2.12
317(a)(1)............................................................................... 6.08
(a)(2)............................................................................... 6.09
(b).................................................................................. 2.04
318(a).................................................................................. 11.01
(b).................................................................................. N.A.
(c).................................................................................. 11.01
</TABLE>
N.A. means not applicable.
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* This Cross-Reference Table is not part of the Indenture.
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TABLE OF CONTENTS
<TABLE>
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ARTICLE ONE DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions............................................................................1
Section 1.02. Other Definitions.....................................................................24
Section 1.03. Incorporation by Reference of Trust Indenture Act.....................................25
Section 1.04. Rules of Construction.................................................................25
ARTICLE TWO THE NOTES
Section 2.01. Form and Dating.......................................................................26
Section 2.02. Execution and Authentication..........................................................26
Section 2.03. Registrar and Paying Agent............................................................27
Section 2.04. Paying Agent to Hold Money in Trust...................................................27
Section 2.05. Holder Lists..........................................................................28
Section 2.06. Transfer and Exchange.................................................................28
Section 2.07. Replacement Notes.....................................................................41
Section 2.08. Outstanding Notes.....................................................................41
Section 2.09. Treasury Notes........................................................................42
Section 2.10. Temporary Notes.......................................................................42
Section 2.11. Cancellation..........................................................................42
Section 2.12. Defaulted Interest....................................................................43
Section 2.13. Cusip Numbers.........................................................................43
ARTICLE THREE REDEMPTION AND PREPAYMENT;SATISFACTION AND DISCHARGE
Section 3.01. Notices to Trustee....................................................................43
Section 3.02. Selection of Notes to be Redeemed.....................................................43
Section 3.03. Notice of Redemption..................................................................44
Section 3.04. Effect of Notice of Redemption........................................................45
Section 3.05. Deposit of Redemption Price...........................................................45
Section 3.06. Notes Redeemed in Part................................................................45
Section 3.07. Optional Redemption...................................................................46
Section 3.08. Mandatory Redemption..................................................................46
Section 3.09. Offer to Purchase by Application of Excess Proceeds...................................47
Section 3.10. Satisfaction and Discharge of Indenture...............................................48
Section 3.11. Application of Trust Money............................................................49
</TABLE>
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ARTICLE FOUR COVENANTS
Section 4.01. Payment of Notes......................................................................50
Section 4.02. Maintenance of Office or Agency.......................................................50
Section 4.03. Reports...............................................................................51
Section 4.04. Compliance Certificate................................................................51
Section 4.05. Taxes.................................................................................52
Section 4.06. Stay, Extension and Usury Laws........................................................52
Section 4.07. Restricted Payments...................................................................53
Section 4.08. Dividend and Other Payment Restrictions Affecting Subsidiaries........................56
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Stock............................58
Section 4.10. Asset Sales...........................................................................60
Section 4.11. Transactions With Affiliates..........................................................62
Section 4.12. Liens.................................................................................64
Section 4.13. Business Activities...................................................................64
Section 4.14. Corporate Existence...................................................................64
Section 4.15. Offer to Repurchase Upon Change of Control............................................65
Section 4.16. Limitation On Sale and Leaseback Transactions.........................................66
Section 4.17. Limitation On Sale or Issuance of Capital Stock of Restricted Subsidiaries............66
Section 4.18. Limitations On Issuances of Guarantees by Restricted Subsidiaries.....................67
Section 4.19. Designation of Restricted and Unrestricted Subsidiaries...............................67
Section 4.20. Payments for Consent..................................................................68
Section 4.21. No Senior Subordinated Debt...........................................................68
Section 4.22. Additional Note Guarantees............................................................68
ARTICLE FIVE SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets..............................................68
Section 5.02. Successor Corporation Substituted.....................................................69
ARTICLE SIX DEFAULTS AND REMEDIES
Section 6.01. Events of Default.....................................................................70
Section 6.02. Acceleration..........................................................................71
Section 6.03. Other Remedies........................................................................72
Section 6.04. Waiver of Past Defaults...............................................................73
Section 6.05. Control by Majority...................................................................73
Section 6.06. Limitation On Suits...................................................................74
Section 6.07. Rights of Holders of Notes to Receive Payment.........................................74
Section 6.08. Collection Suit by Trustee............................................................74
Section 6.09. Trustee May File Proofs of Claim......................................................75
Section 6.10. Priorities............................................................................75
Section 6.11. Undertaking for Costs.................................................................76
</TABLE>
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ARTICLE SEVEN TRUSTEE
Section 7.01. Duties of Trustee.....................................................................76
Section 7.02. Rights of Trustee.....................................................................77
Section 7.03. Individual Rights of Trustee..........................................................78
Section 7.04. Trustee's Disclaimer..................................................................78
Section 7.05. Notice of Defaults....................................................................78
Section 7.06. Reports by Trustee to Holders of the Notes............................................79
Section 7.07. Compensation and Indemnity............................................................79
Section 7.08. Replacement of Trustee................................................................80
Section 7.09. Successor Trustee by Merger, Etc......................................................81
Section 7.10. Eligibility; Disqualification.........................................................81
Section 7.11. Preferential Collection of Claims Against Company.....................................81
ARTICLE EIGHT LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance..............................82
Section 8.02. Legal Defeasance and Discharge........................................................82
Section 8.03. Covenant Defeasance...................................................................82
Section 8.04. Conditions to Legal or Covenant Defeasance............................................83
Section 8.05. Deposited Money and Government Securities to be Held in Trust; Other
Miscellaneous Provisions..............................................................84
Section 8.06. Repayment to Company..................................................................85
Section 8.07. Reinstatement.........................................................................85
ARTICLE NINE AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Notes...................................................85
Section 9.02. With Consent of Holders of Notes......................................................86
Section 9.03. Compliance With Trust Indenture Act...................................................88
Section 9.04. Revocation and Effect of Consents.....................................................88
Section 9.05. Notation On or Exchange of Notes......................................................88
Section 9.06. Trustee to Sign Amendments, Etc.......................................................88
ARTICLE TEN NOTE GUARANTEES
Section 10.01. Note Guarantees.........................................................................89
Section 10.02. Execution and Delivery of Note Guarantee................................................90
Section 10.03. Severability............................................................................90
Section 10.04. Seniority of Note Guarantees............................................................90
Section 10.05. Limitation of Guarantor's Liability.....................................................91
Section 10.06. Guarantors May Consolidate, Etc., On Certain Terms......................................91
Section 10.07. Releases Following Sale of Assets.......................................................92
Section 10.08. Benefits Acknowledged...................................................................92
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ARTICLE ELEVEN SUBORDINATION
Section 11.01. Notes Subordinate to Senior Debt........................................................92
Section 11.02. Payment Over by the Company of Proceeds Upon Dissolution, Etc...........................93
Section 11.03. Suspension of Payment On Notes When Senior Debt of the Company in Default...............94
Section 11.04. Payment Over by Guarantors of Proceeds Upon Dissolution, Etc............................95
Section 11.05. Suspension of Payment On Note Guarantees When Senior Indebtedness of Guarantor in
Default.................................................................................95
Section 11.06. Payment Permitted If No Default.........................................................96
Section 11.07. Subrogation to Rights of Holders of Senior Debt.........................................96
Section 11.08. Provisions Solely to Define Relative Rights.............................................97
Section 11.09. Trustee to Effectuate Subordination. ...................................................97
Section 11.10. No Waiver of Subordination Provisions...................................................97
Section 11.11. Notice to Trustee.......................................................................98
Section 11.12. Reliance On Judicial Order or Certificate of Liquidating Agent..........................99
Section 11.13. Rights of Trustee as a Holder of Senior Debt; Preservation of Trustees Rights...........99
Section 11.14. Article Applicable to Paying Agents.....................................................99
Section 11.15. No Suspension of Remedies...............................................................99
Section 11.16. Trust Moneys Not Subordinated..........................................................100
Section 11.17. Trustee Not Fiduciary for Holders of Senior Debt.......................................100
Section 11.18. Notice to Holders of Senior Debt.......................................................100
Section 11.19. Amendments to Article Eleven...........................................................100
ARTICLE TWELVE MISCELLANEOUS
Section 12.01. Trust Indenture Act Controls...........................................................101
Section 12.02. Notices................................................................................101
Section 12.03. Communication by Holders of Notes With Other Holders of Notes..........................102
Section 12.04. Certificate and Opinion as to Conditions Precedent.....................................102
Section 12.05. Statements Required in Certificate or Opinion..........................................102
Section 12.06. Rules by Trustee and Agents............................................................103
Section 12.07. No Personal Liability of Directors, Officers, Employees and Stockholders...............103
Section 12.08. Governing Law..........................................................................103
Section 12.09. No Adverse Interpretation of Other Agreements..........................................103
Section 12.10. Successors.............................................................................104
Section 12.11. Severability...........................................................................104
Section 12.12. Counterpart Originals..................................................................104
Section 12.13. Table of Contents, Headings, Etc.......................................................104
</TABLE>
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EXHIBITS
Exhibit A FORM OF NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFER
Exhibit C FORM OF CERTIFICATE OF EXCHANGE
Exhibit D FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED
INVESTOR
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<PAGE> 9
INDENTURE dated as of April 21, 1999 between Florida Panthers
Holdings, Inc., a Delaware corporation (the "COMPANY"), the Guarantors named on
the signature pages hereto (collectively, the "GUARANTORS") and The Bank of New
York, a New York banking corporation, as trustee (the "TRUSTEE").
The Company, Guarantors and the Trustee agree as follows for
the benefit of each other and for the equal and ratable benefit of the Holders
of the 9_% Senior Subordinated Notes due 2009 (the "NOTES"):
ARTICLE ONE
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. DEFINITIONS.
"144A GLOBAL NOTE" means a global note substantially in the
form of Exhibit A hereto bearing the Global Note Legend and the Private
Placement Legend and deposited with or on behalf of, and registered in the name
of, the Depositary or its nominee that will be issued in a denomination equal to
the outstanding principal amount of the Notes sold in reliance on Rule 144A.
"ACQUIRED DEBT" means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such
other Person is merged with or into or became a Subsidiary of such
specified Person, whether or not such Indebtedness is incurred in
connection with, or in contemplation of, such other Person merging with
or into, or becoming a Subsidiary of, such specified Person; and
(2) 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," 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
Voting Stock of a Person with the power to vote 10% or more of the total votes
entitled to be cast on any matter submitted to a vote of the shareholders of
such Person shall be deemed to be control. For purposes of this definition, the
terms "CONTROLLING," "CONTROLLED BY" and "UNDER COMMON CONTROL WITH" shall have
correlative meanings.
"AGENT" means any Registrar, Paying Agent or co-registrar.
1
<PAGE> 10
"APPLICABLE PROCEDURES" means, with respect to any transfer or
exchange of or for beneficial interests in any Global Note, the rules and
procedures of the Depositary that apply to such transfer or exchange.
"ASSET SALE" means:
(a)(1) the sale, lease, conveyance or other disposition of any
assets or rights; PROVIDED that the sale, conveyance or other
disposition of all or substantially all of the assets of the Company
and its Restricted Subsidiaries taken as a whole shall be governed by
Section 4.15 hereof and/or Section 5.01 hereof and not by Section 4.10
hereof; and
(2) the issuance of Equity Interests by any of the Company's
Restricted Subsidiaries or the sale of Equity Interests in any of its
Subsidiaries.
(b) Notwithstanding the preceding, the following items shall
not be deemed to be Asset Sales:
(1) any single transaction or series of related transactions
that involves assets having a fair market value of less than $1.0
million;
(2) a transfer of assets between or among the Company and its
Restricted Subsidiaries;
(3) an issuance of Equity Interests by a Restricted Subsidiary
to the Company or to another Restricted Subsidiary;
(4) the sale or lease of equipment, inventory, accounts
receivable or other assets in the ordinary course of business;
(5) the sale or other disposition of cash or Cash Equivalents;
(6) any exchange of like property pursuant to Section 1031 of
the Internal Revenue Code of 1986, as amended, for use in a Permitted
Business; and
(7) a Restricted Payment or Permitted Investment that is
permitted by Section 4.07 hereof.
(c) The sale or other disposition of the Hockey Club or any of
the Hockey Assets:
(i) resulting from the exercise of rights and
remedies pursuant to the Hockey Facility, as amended,
modified, renewed, refunded, replaced or refinanced from time
to time, PROVIDED that any such amendment, modification,
2
<PAGE> 11
renewal, refund, replacement or refinancing is secured by the
Hockey Club or the Hockey Assets; and
(ii) in accordance with the NHL Agreement, shall be
an Asset Sale that is required to comply with Section 4.10
hereof, but shall be deemed to satisfy clauses (1), (2) and
(3) of the first paragraph thereunder if such sale is approved
or is otherwise not objected to by the National Hockey League.
"ATTRIBUTABLE DEBT" in respect of a sale and leaseback
transaction means, at the time of determination, the present value of the
obligation of the lessee for net rental payments during the remaining term of
the lease included in such sale and leaseback transaction including any period
for which such lease has been extended or may, at the option of the lessor, be
extended. Such present value shall be calculated using a discount rate equal to
the rate of interest implicit in such transaction, determined in accordance with
GAAP.
"BANKRUPTCY LAW" means Title 11, U.S. Code or any similar
federal or state law for the relief of debtors.
"BENEFICIAL OWNER" has the meaning assigned to such term in
Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the
beneficial ownership of any particular "person" (as that term is used in Section
13(d)(3) of the Exchange Act), such "person" shall be deemed to have beneficial
ownership of all securities that such "person" has the right to acquire by
conversion or exercise of other securities, whether such right is currently
exercisable or is exercisable only upon the occurrence of a subsequent
condition. The terms "BENEFICIALLY OWNS" and "BENEFICIALLY OWNED" shall have a
corresponding meaning.
"BOARD OF DIRECTORS" means:
(1) with respect to a corporation, the board of directors of
the corporation;
(2) with respect to a partnership, the Board of Directors of
the general partner of the partnership; and
(3) with respect to any other Person, the board or committee
of such Person serving a similar function.
"BROKER-DEALER" has the meaning set forth in the Registration
Rights Agreement.
"BUSINESS DAY" means any day other than a Legal Holiday.
"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 that time be required to be capitalized on a balance
sheet in accordance with GAAP.
3
<PAGE> 12
"CAPITAL STOCK" means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and
all shares, interests, participations, rights or other equivalents
(however designated) of corporate stock;
(3) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited); and
(4) 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:
(1) United States dollars;
(2) securities issued or directly and fully guaranteed or
insured by the United States government or any agency or
instrumentality thereof (PROVIDED that the full faith and credit of the
United States is pledged in support thereof) having maturities of less
than one year from the date of acquisition;
(3) certificates of deposit and eurodollar time deposits with
maturities of less than one year from the date of acquisition, bankers'
acceptances with maturities not exceeding six months and overnight bank
deposits, in each case, with any domestic commercial bank having
capital and surplus in excess of $500.0 million;
(4) repurchase obligations with a term of not more than seven
days for underlying securities of the types described in clauses (2)
and (3) above entered into with any financial institution meeting the
qualifications specified in clause (3) above;
(5) commercial paper having the highest rating obtainable from
Moody's Investors Service, Inc. or Standard & Poor's Ratings Services
and in each case maturing within nine months after the date of
acquisition; and
(6) money market funds which invest substantially all of their
assets in securities which constitute Cash Equivalents of the kinds
described in clauses (1) through (5) of this definition.
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<PAGE> 13
"CHANGE OF CONTROL" means the occurrence of any of the
following:
(1) the direct or indirect sale, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one or a
series of related transactions, of all or substantially all of the
properties or assets of the Company and its Restricted Subsidiaries,
taken as a whole, to any "person" (as that term is used in Section
13(d)(3) of the Exchange Act) other than a Principal or a Related Party
of a Principal;
(2) the adoption of a plan relating to the liquidation or
dissolution of the Company;
(3) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that
any "person" (as defined above) other than the Principal and his
Related Parties, becomes the Beneficial Owner, directly or indirectly,
of Voting Stock of the Company with the power to vote 50% or more of
the total votes entitled to be cast on any matter submitted to a vote
of shareholders;
(4) during any consecutive two year period, individuals who at
the beginning of such period constituted the Board of Directors of the
Company (together with any new directors whose election to such Board
of Directors, or whose nomination for election by the stockholders of
the Company, was approved by a vote of a majority of the directors then
still in office who were either directors at the beginning of such
period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors of the Company then in office; or
(5) the Company consolidates with, or merges with or into, any
Person, or any Person consolidates with, or merges with or into, the
Company, in any such event pursuant to a transaction in which any of
the outstanding Voting Stock of the Company or such other Person is
converted into or exchanged for cash, securities or other property,
other than any such transaction where the Voting Stock of the Company
outstanding immediately prior to such transaction is converted into or
exchanged for Voting Stock (other than Disqualified Stock) of the
surviving or transferee Person constituting a majority of the
outstanding shares of such Voting Stock of such surviving or transferee
Person (immediately after giving effect to such issuance) and no Person
other than the Principal and his Related Parties, becomes the
Beneficial Owner, directly or indirectly, of Voting Stock of such
Person with the power to vote 50% or more of the total votes entitled
to be cast on any matter submitted to a vote of shareholders.
"COMPANY" means Florida Panthers Holdings, Inc., a Delaware
corporation, and any and all successors thereto.
5
<PAGE> 14
"CONSOLIDATED CASH FLOW" means, with respect to any specified
Person for any period, the Consolidated Net Income of such Person for such
period:
(1) PLUS 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;
(2) PLUS 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 debt issuance costs and 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, imputed interest with respect to Attributable Debt,
commissions, discounts and other fees and charges incurred in respect
of letter of credit or bankers' acceptance financings, and net of the
effect of all payments made or received pursuant to Hedging Obligations
or Currency Agreements, but excluding imputed interest relating to
payments described in clause (ii) of the definition of Permitted Seller
Note Payments), to the extent that any such expense was deducted in
computing such Consolidated Net Income;
(3) PLUS 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
expenses (excluding any such non-cash expense to the extent that it
represents an accrual of or reserve for cash expenses in any future
period or amortization of a prepaid cash expense that was paid in a
prior period) of such Person and its Subsidiaries for such period to
the extent that such depreciation, amortization and other non-cash
expenses were deducted in computing such Consolidated Net Income;
(4) PLUS the increase or MINUS the decrease in the amount of
deferred Premier Club membership fees reflected as a component of
deferred revenue on the consolidated balance sheets of the Company at
the beginning and end of such period PLUS the decrease or MINUS the
increase in Premier Club notes receivable reflected on such
consolidated balance sheets (without taking into account any write-offs
related to such amounts) less all expenses during such period in
connection with such Premier Club operations (which were not otherwise
included in computing Consolidated Net Income for such period);
(5) MINUS non-cash items increasing such Consolidated Net
Income for such period, other than the accrual of revenue in the
ordinary course of business, in each case, on a consolidated basis and
determined in accordance with GAAP.
Notwithstanding the preceding, the provision for taxes based
on the income or profits of, and the depreciation and amortization and other
non-cash expenses of, a Restricted Subsidiary of the Company shall be added to
Consolidated Net Income to compute Consolidated Cash Flow of the Company only to
the extent that a corresponding amount would be permitted at
6
<PAGE> 15
the date of determination to be dividended to the Company by such Restricted
Subsidiary without prior governmental approval (that has not been obtained), and
without direct or indirect restriction pursuant to the terms of its charter and
all agreements, instruments, judgments, decrees, orders, statutes, rules and
governmental regulations applicable to that Subsidiary or its stockholders.
"CONSOLIDATED NET INCOME" means, with respect to any specified
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:
(1) the Net Income (but not loss) 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 specified Person or a
Wholly Owned Restricted Subsidiary thereof;
(2) 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 an amount equal
to such Net Income would not have been permitted on or prior to the
date of determination 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;
(3) 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; and
(4) the cumulative effect of a change in accounting principles
shall be excluded.
"CONTINUING DIRECTORS" means, as of any date of determination,
any member of the Board of Directors of the Company who:
(1) was a member of such Board of Directors on the date of the
Indenture; or
(2) was nominated for election or elected to such Board of
Directors with the approval of a majority of the Continuing Directors
who were members of such Board at the time of such nomination or
election.
"CORPORATE TRUST OFFICE OF THE TRUSTEE" shall be at the
address of the Trustee specified in Section 12.02 hereof or such other address
as to which the Trustee may give notice to the Company.
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<PAGE> 16
"CREDIT AGREEMENTS" means the New Credit Facility and the
Hockey Facility, in each case, 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 from time to time.
"CREDIT FACILITIES" means, one or more debt facilities
(including, without limitation, the Credit Agreements) or commercial paper
facilities, in each case with banks or other institutional lenders providing for
revolving credit loans, lines-of-credit, term loans, receivables financing
(including through the sale of receivables to such lenders or to special purpose
entities formed to borrow from such lenders against such receivables) or letters
of credit, in each case, as amended, restated, modified, renewed, refunded,
replaced or refinanced in whole or in part from time to time.
"CURRENCY AGREEMENTS" means any spot or forward foreign
exchange agreements and currency swap, currency option or other similar
financial agreements or arrangements entered into by the Company or any of its
Restricted Subsidiaries in the ordinary course of business and designed to
protect against or manage exposure to fluctuations in foreign currency exchange
rates.
"CUSTODIAN" means the Trustee, as custodian with respect to
the Notes in global form, or any successor entity thereto.
"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.
"DEFINITIVE NOTE" means a certificated Note registered in the
name of the Holder thereof and issued in accordance with Section 2.06 hereof,
substantially in the form of Exhibit A hereto except that such Note shall not
bear the Global Note Legend and shall not have the "Schedule of Exchanges of
Interests in the Global Note" attached thereto.
"DEPOSITARY" means, with respect to the Notes issuable or
issued in whole or in part in global form, the Person specified in Section 2.03
hereof as the Depositary with respect to the Notes, and any and all successors
thereto appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
"DESIGNATED SENIOR DEBT" means:
(1) any Indebtedness outstanding at any time under any
Existing Credit Agreement and any renewal, refund, replacement or
refinancing of such Indebtedness, PROVIDED that any such renewal,
refund, replacement or refinancing is Senior Debt; and
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<PAGE> 17
(2) any other Senior Debt permitted under the Indenture the
principal amount of which is $20.0 million or more and that has been
designated by the Company as "DESIGNATED SENIOR DEBT."
The Company shall immediately notify the Trustee in writing of
any Indebtedness being designated as Designated Senior Debt.
"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, in each case at the option of the holder thereof), or
upon the happening of any event, matures or is mandatorily redeemable, pursuant
to a sinking fund obligation or otherwise, or redeemable at the option of the
holder thereof, in whole or in part, on or prior to the date that is 91 days
after the date on which the Notes mature. Notwithstanding the preceding
sentence, any Capital Stock that would constitute Disqualified Stock solely
because the holders thereof have the right to require the Company to repurchase
such Capital Stock upon the occurrence of a change of control or an asset sale
shall not constitute Disqualified Stock if the terms of such Capital Stock
provide that the Company may not repurchase or redeem any such Capital Stock
pursuant to such provisions unless such repurchase or redemption complies with
Section 4.07 hereof.
"DOMESTIC SUBSIDIARY" means any Restricted Subsidiary that was
formed under the laws of the United States or any state thereof or the District
of Columbia or that guarantees or otherwise provides direct credit support for
any Indebtedness of the Company.
"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).
"EUROCLEAR" means Morgan Guaranty Trust Company of New York,
Brussels office, as operator of the Euroclear system.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"EXCHANGE NOTES" means the Notes issued in the Exchange Offer
pursuant to Section 2.06(f) hereof.
"EXCHANGE OFFER" has the meaning set forth in the Registration
Rights Agreement.
"EXCHANGE OFFER REGISTRATION STATEMENT" has the meaning set
forth in the Registration Rights Agreement.
"EXISTING CREDIT AGREEMENTS" means the New Credit Facility,
the Hockey Facility, the Amended and Restated Loan Agreement among Panthers BRHC
Limited, The Bank
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<PAGE> 18
of Nova Scotia, New York agency, individually and as Administrative Agent for
itself and the lenders, and the lenders signatory thereto, dated as of June 25,
1997, and the Deed of Trust, Security Agreement, Assignment of Rents and
Revenues and Fixture Filing dated as of June 4, 1996, as amended, by Biltmore
Hotel Partners, L.L.L.P., an Arizona limited liability limited partnership
(formerly Biltmore Hotel Partners, an Arizona general partnership), as Trustor,
in favor of First American Title Insurance Company, a California corporation, as
Trustee, and American General Life Insurance Company, a Texas corporation, The
Variable Annuity Life Insurance Company, a Texas corporation, the Franklin Life
Insurance Company, an Illinois corporation, and American General Life and
Accident Insurance Company, a Tennessee corporation, collectively, as
Beneficiary, including any related notes, guarantees, collateral documents,
instruments and agreements executed in connection therewith, and, in each case,
as amended or modified from time to time.
"EXISTING INDEBTEDNESS" means up to $564.3 million in
aggregate principal amount of Indebtedness of the Company and its Subsidiaries
in existence on the date of this Indenture, until such amounts are repaid,
excluding any revolving credit Indebtedness and letters of credit outstanding on
the date of this Indenture under any of the Credit Agreements.
"FIXED CHARGES" means, with respect to any specified Person
for any period, the sum, without duplication, of:
(1) the consolidated interest expense of such Person and its
Subsidiaries for such period, whether paid or accrued, including,
without limitation, amortization of debt issuance costs and 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, imputed interest
with respect to Attributable Debt, commissions, discounts and other
fees and charges incurred in respect of letter of credit or bankers'
acceptance financings, and net of the effect of all payments made or
received pursuant to Hedging Obligations and Currency Agreements, but
excluding imputed interest relating to payments described in clause
(ii) of the definition of Permitted Seller Note Payments; PLUS
(2) the consolidated interest of such Person and its
Restricted Subsidiaries that was capitalized during such period; PLUS
(3) 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;
PLUS
(4) the product of (a) all dividends, whether paid or accrued
and whether or not in cash, on any series of preferred stock of such
Person or any of its Restricted Subsidiaries, other than dividends on
Equity Interests payable solely in Equity Interests of
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<PAGE> 19
the Company (other than Disqualified Stock) or to the Company or a
Restricted Subsidiary of the Company, 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, expressed as a decimal, in each case, on a consolidated
basis and in accordance with GAAP.
"FIXED CHARGE COVERAGE RATIO" means with respect to any
specified Person for any period, the ratio of the Consolidated Cash Flow of such
Person for such period to the Fixed Charges of such Person for such period. In
the event that the specified Person or any of its Subsidiaries incurs, assumes,
Guarantees, repays, repurchases or redeems any Indebtedness or issues,
repurchases or redeems preferred stock subsequent to the commencement of the
period for which the Fixed Charge Coverage Ratio is being calculated and on or
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, repayment, repurchase or redemption of Indebtedness, or
such issuance, repurchase or redemption of preferred stock, and the use of the
proceeds therefrom as if the same had occurred at the beginning of the
applicable four-quarter reference period.
In addition, for purposes of calculating the Fixed Charge
Coverage Ratio:
(1) acquisitions that have been made by the specified Person
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 given pro forma
effect as if they had occurred on the first day of the four-quarter
reference period and Consolidated Cash Flow for such reference period
shall be calculated on a pro forma basis in accordance with Regulation
S-X under the Securities Act, but without giving effect to clause (3)
of the proviso set forth in the definition of Consolidated Net Income;
(2) 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
(3) 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 specified Person or any of its
Subsidiaries following the Calculation Date.
"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
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<PAGE> 20
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 from
time to time.
"GLOBAL NOTES" means, individually and collectively, each of
the Restricted Global Notes and the Unrestricted Global Notes, substantially in
the form of Exhibit A hereto issued in accordance with Section 2.01,
2.06(b)(iv), 2.06(d)(ii) or 2.06(f) hereof.
"GLOBAL NOTE LEGEND" means the legend set forth in Section
2.06(g)(ii), which is required to be placed on all Global Notes issued under
this Indenture.
"GOVERNMENT SECURITIES" means direct obligations of, or
obligations guaranteed by, the United States of America, and the payment for
which the United States pledges its full faith and credit.
"GUARANTEE" means any guarantee of all or any part of any
Indebtedness other than by endorsement of negotiable instruments for collection
in the ordinary course of business, direct or indirect, in any manner,
including, without limitation, by way of a pledge of assets or through letters
of credit or reimbursement agreements in respect thereof.
"GUARANTORS" means each of:
(1) the Company's Subsidiaries existing on the date of this
Indenture; and
(2) any other subsidiary that executes a Note Guarantee in
accordance with the provisions of this Indenture; and their respective
successors and assigns.
"HEDGING OBLIGATIONS" means, with respect to any specified
Person, the obligations of such Person under:
(1) interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements; and
(2) other agreements or arrangements designed to protect such
Person against fluctuations in interest rates.
"HOCKEY ASSETS" means any and all assets and properties of the
Hockey Club, including, without limitation, the National Hockey League franchise
for the team known as the Florida Panthers, and any and all equity interests in
the Hockey Club, in each case whether now existing or hereafter acquired or
created, together with all products and proceeds thereof, all collections,
payments and other distributions and realizations with respect thereto, any and
all other rights, powers, privileges, remedies and interests of the Hockey Club
therein, thereto or
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<PAGE> 21
thereunder, and any and all renewals, substitutions, modifications and
extensions of any and all of the items in this definition, PROVIDED that the
term "HOCKEY ASSETS" shall not include any of the items in this definition to
the extent that the National Hockey League does not have rights of consent
pursuant to the NHL Agreement in respect of any sale of such items.
"HOCKEY CLUB" shall mean FLORIDA PANTHERS HOCKEY CLUB, LTD., a
Florida limited partnership having addresses as of the date hereof at 100 S.E.
Third Avenue, Second Floor, Fort Lauderdale, Florida 33301, and c/o Florida
Panthers Holdings, Inc., 450 East Las Olas Boulevard, Suite 1400, Fort
Lauderdale, Florida 33301.
"HOCKEY FACILITY" means the Amended and Restated Loan and
Security Agreement among the Hockey Club, the Banks (as defined therein) and The
Chase Manhattan Bank, a New York state chartered banking corporation, as
Administrative Agent (or such other person as from time to time may be
designated as "Administrative Agent" thereunder) dated as of December 1, 1997,
together with all schedules and exhibits thereto providing for up to $50.0
million of revolving credit borrowings and letters of credit, including, without
limitation, any and all related notes, Guarantees, collateral documents,
instruments and agreements executed from time to time in connection therewith,
in each case as in effect on the date of this Indenture.
"HOLDER" means a Person in whose name a Note is registered.
"INDEBTEDNESS" means, with respect to any specified Person,
any indebtedness of such Person, whether or not contingent, in respect of:
(1) borrowed money;
(2) evidenced by bonds, notes, debentures or similar
instruments or letters of credit (or reimbursement agreements in
respect thereof);
(3) banker's acceptances;
(4) representing Capital Lease Obligations;
(5) the balance deferred and unpaid of the bargained for
consideration or purchase price in respect of the acquisition of any
property, except any such balance that constitutes an accrued expense
or trade payable; or
(6) representing any Hedging Obligations,
if and to the extent any of the preceding items (other than letters of credit
and Hedging Obligations) would appear as a liability upon a balance sheet of the
specified Person prepared in accordance with GAAP. In addition, the term
"INDEBTEDNESS" includes all Indebtedness of others secured by a Lien on any
asset of the specified Person (whether or not such Indebtedness is
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<PAGE> 22
assumed by the specified Person) and, to the extent not otherwise included, the
Guarantee by the specified Person of any Indebtedness of any other Person.
The amount of any Indebtedness outstanding as of any date
shall be:
(1) the accreted value thereof, in the case of any
Indebtedness issued with original issue discount; and
(2) the principal amount thereof, together with any interest
thereon that is more than 30 days past due, in the case of any other
Indebtedness.
"INDENTURE" means this Indenture, as amended or supplemented
from time to time.
"INDIRECT PARTICIPANT" means a Person who holds a beneficial
interest in a Global Note through a Participant.
"INSTITUTIONAL ACCREDITED INVESTOR" means an institution that
is an "accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under
the Securities Act, who are not also QIBs.
"INVESTMENT" means, with respect to any Person, all direct or
indirect investments by such Person in other Persons (including Affiliates) in
the forms of loans (including Guarantees 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 for consideration 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. If the Company
or any Restricted Subsidiary of the Company sells or otherwise disposes of any
Equity Interests of any direct or indirect Restricted Subsidiary of the Company
such that, after giving effect to any such sale or disposition, such Person is
no longer a Restricted Subsidiary of the Company, 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 Restricted Subsidiary not sold
or disposed of in an amount determined as provided in the final paragraph of
Section 4.07 hereof. The acquisition by the Company or any Restricted Subsidiary
of the Company of a Person that holds an Investment in a third Person shall be
deemed to be an Investment by the Company or such Restricted Subsidiary in such
third Person in an amount equal to the fair market value of the Investment held
by the acquired Person in such third Person in an amount determined as provided
in the final paragraph of Section 4.07 hereof.
"LEGAL HOLIDAY" means a Saturday, a Sunday or a day on which
banking institutions in the City of New York or at a place of payment are
authorized by law, regulation or executive order to remain closed. If a payment
date is a Legal Holiday at a place of payment,
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<PAGE> 23
payment may be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue on such payment for the intervening
period.
"LETTER OF TRANSMITTAL" means the letter of transmittal to be
prepared by the Company and sent to all Holders of the Notes for use by such
Holders in connection with the Exchange Offer.
"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 Section 5 of the Registration Rights Agreement.
"NHL AGREEMENT" means that certain letter agreement dated
December 15, 1997 by and among the Hockey Club, the National Hockey League, The
Chase Manhattan Bank, among others (or any similar letter agreement
acknowledging National Hockey League rights of consent in respect of any sale of
the Hockey Club or the Hockey Assets entered into in connection with any
amendment, modification, renewal, refund, replacement or refinancing of the
Hockey Facility).
"NET INCOME" means, with respect to any specified 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:
(1) 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; 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
(2) any extraordinary gain (but not loss), together with any
related provision for taxes on such extraordinary gain (but not loss).
"NET PROCEEDS" means the aggregate cash proceeds (including
Cash Equivalents) 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 sales
commissions, and any relocation expenses incurred as a result thereof, taxes
paid or payable as a
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<PAGE> 24
result thereof, in each case, after taking into account any available tax
credits or deductions and any tax sharing arrangements, and amounts required to
be applied to the repayment of Indebtedness secured by a Lien on the asset or
assets that were the subject of such Asset Sale and any reserve against
indemnification obligations or for adjustment in respect of the sale price of
such asset or assets established in accordance with GAAP.
"NEW CREDIT FACILITY" means the Credit Agreement, dated as of
April 21, 1999, 1999, by and among Florida Panthers Hotel Corporation, the
Lenders party thereto, Bear, Stearns & Co. Inc., as syndication agent, and
Bankers Trust Company, as administrative agent, providing for up to $146.0
million of revolving credit borrowings, including any related notes, guarantees,
collateral documents, instruments and agreements executed in connection
therewith, as in effect on the date of this Indenture.
"NON-RECOURSE DEBT" means Indebtedness:
(1) 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;
(2) 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 (other than the Notes) 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
(3) 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.
"NON-U.S. PERSON" means a Person who is not a U.S. Person.
"NOTE GUARANTEE" means a Guarantee of the Notes by a
Guarantor.
"NOTES" has the meaning assigned to it in the preamble to this
Indenture.
"OBLIGATIONS" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness (including, without limitation, any
and all interest and other amounts accrued during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding, irrespective
of whether such interest and other amounts are allowed or allowable as claims in
such proceedings).
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<PAGE> 25
"OFFERING" means the offering of the Notes by the Company.
"OFFICER" means, with respect to any Person, the Chairman of
the Board, the Chief Executive Officer, the President, the Chief Operating
Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer,
the Controller, the Secretary or any Vice-President of such Person.
"OFFICERS' CERTIFICATE" means a certificate signed on behalf
of the Company by at least two Officers of the Company, one of whom must be the
principal executive officer, the principal financial officer or the principal
accounting officer of the Company, that meets the requirements of Section 12.05
hereof.
"OPINION OF COUNSEL" means an opinion from legal counsel who
is reasonably acceptable to the Trustee, that meets the requirements of Section
12.05 hereof. The counsel may be an employee of or counsel to the Company, any
Subsidiary of the Company or the Trustee.
"PARTICIPANT" means, with respect to the Depositary, a Person
who has an account with the Depositary.
"PERMITTED BUSINESS" means any business engaged primarily in
the leisure, recreation, sports and entertainment industries and any related,
ancillary or complementary business.
"PERMITTED INVESTMENT" means:
(1) any Investment in the Company or in a Restricted
Subsidiary of the Company that is a Guarantor;
(2) any Investment in Cash Equivalents;
(3) 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 and a Guarantor; or
(b) such Person 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 that is a
Guarantor;
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<PAGE> 26
(4) any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in
compliance with Section 4.10 hereof;
(5) any acquisition of assets solely in exchange for the
issuance of Equity Interests (other than Disqualified Stock) of the
Company;
(6) Hedging Obligations;
(7) loans or advances to employees of the Company in the
ordinary course of business in aggregate amount outstanding at any one
time not to exceed $2.0 million; and
(8) other Investments in any Person having an aggregate fair
market value (measured on the date each such Investment was made and
without giving effect to subsequent changes in value), when taken
together with all other Investments made pursuant to this clause (8)
since the date of this Indenture, not to exceed $20.0 million.
"PERMITTED LIENS" means:
(1) Liens (including floating liens on after-acquired
property, whenever acquired) on the assets of the Company and any
Guarantor securing Senior Debt that was permitted by the terms of the
Indenture to be incurred;
(2) Liens in favor of the Company or any Restricted
Subsidiary;
(3) Liens on property of a Person existing at the time such
Person is merged with or into or consolidated with the Company or any
Restricted Subsidiary of the Company; PROVIDED that such Liens were in
existence prior to the contemplation of such merger or consolidation
and do not extend to any assets other than those of the Person merged
into or consolidated with the Company or the Restricted Subsidiary;
(4) Liens on property existing at the time of acquisition
thereof by the Company or any Restricted Subsidiary of the Company,
PROVIDED that such Liens were in existence prior to the contemplation
of such acquisition and do not extend to any property other than the
property so acquired by the Company or the Restricted Subsidiary;
(5) Liens existing on the date of this Indenture; and
(6) Liens incurred in the ordinary course of business of the
Company or any Restricted Subsidiary of the Company with respect to
obligations that do not exceed $5.0 million at any one time
outstanding.
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<PAGE> 27
"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
(other than intercompany Indebtedness); PROVIDED that:
(1) 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 all
accrued interest thereon and the amount of all expenses and premiums
incurred in connection therewith);
(2) 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;
(3) 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
(4) such Indebtedness is incurred by (whether as borrower or
guarantor) the Person or Persons which is or are the obligor or
obligors on the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded.
"PERMITTED SELLER NOTE PAYMENTS" means: (i) any (x) purchase
or redemption of, or (y) the payment of any preference amount to any holder of,
the 500,000 Class A Units (representing limited partnership interests) issued
under the Limited Partnership Agreement, as in effect on the date of this
Indenture, of Biltmore Hotel Partners, L.L.L.P., an Arizona limited liability
limited partnership ("BHP LIMITED PARTNERSHIP AGREEMENT") which owns the Arizona
Biltmore Hotel and which was organized in connection with the acquisition of
such hotel; PROVIDED that the aggregate amount paid under clause (i)(x) shall
not exceed $500,000 and the aggregate amount paid under clause (i)(y) shall not
exceed $12,500 per year; (ii) any purchase or redemption (for an aggregate
amount not to exceed $33,333,333) of the 33,333,333 Class E Units (or any Class
C Units for which such Class E Units may be converted) issued under the BHP
Limited Partnership Agreement and held by the former owners of the Arizona
Biltmore Hotel as part of the consideration paid in connection with the
acquisition of the Arizona Biltmore Hotel, which purchase or redemption shall be
in accordance with the terms of the BHP Limited Partnership Agreement and the
Class E Unit or Class C Unit Exchange Agreements each dated March 2, 1998; and
(iii) any payment of fees (not to exceed $3,000,000) on or prior to June 30,
19
<PAGE> 28
2001 under Section 5.10(b) of the BHP Limited Partnership Agreement, if such
fees are deemed a distribution upon a partnership interest and not a fee.
"PERSON" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
limited liability company or government or other entity.
"PRINCIPAL" means H. Wayne Huizenga.
"PRIVATE PLACEMENT LEGEND" means the legend set forth in
Section 2.06(g)(i) to be placed on all Notes issued under this Indenture except
where otherwise permitted by the provisions of this Indenture.
"PUBLIC EQUITY OFFERING" means an offer and sale of common
stock (which is not Disqualified Stock) of the Company made on a primary basis
by the Company to any Person other than a Subsidiary of the Company pursuant to
a registration statement that has been declared effective by the Commission
pursuant to the Securities Act (other than a registration statement on Form S-8
or otherwise relating to equity securities issuable under any employee benefit
plan of the Company).
"QIB" means a "qualified institutional buyer" as defined in
Rule 144A.
"QUALIFIED EQUITY OFFERING" means:
(1) any Public Equity Offering; or
(2) an offering of Capital Stock (which is not Disqualified
Stock) of the Company to any Person other than a Subsidiary of the
Company with gross proceeds to the Company in excess of $20.0 million.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated as of the date of this Indenture, by and among the Company and
the other parties named on the signature pages thereof, as such agreement may be
amended, modified or supplemented from time to time.
"REGULATION S" means Regulation S promulgated under the
Securities Act.
"REGULATION S GLOBAL NOTE" means a global Note bearing the
Global Note Legend and the private Placement Legend and deposited with or on
behalf of and registered in the name of the Depositary or its nominee, issued in
a denomination equal to the outstanding principal amount of the Notes resold in
reliance on Rule 904 of Regulation S.
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"RELATED PARTY" means:
(1) any controlling stockholder, 80% (or more) owned
Subsidiary, or immediate family member (in the case of an individual)
of the Principal; or
(2) any trust, corporation, partnership or other entity, the
beneficiaries, stockholders, partners, owners or Persons beneficially
holding an 80% or more controlling interest of which, consist of any
one or more of the Principal and/or such other Persons referred to in
the immediately preceding clause (1).
"RESPONSIBLE OFFICER," when used with respect to the Trustee,
means any officer within the corporate trust department of the Trustee (or any
successor group of the Trustee), including any vice president, assistant
secretary, assistant treasurer, trust officer or any other officer of the
Trustee customarily performing functions similar to those performed by any of
the above designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his knowledge of and familiarity with the particular subject.
"RESTRICTED DEFINITIVE NOTE" means a Definitive Note bearing
the Private Placement Legend.
"RESTRICTED GLOBAL NOTE" means a Global Note bearing the
Private Placement Legend.
"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 an Unrestricted Subsidiary.
"RULE 144" means Rule 144 promulgated under the Securities
Act.
"RULE 144A" means Rule 144A promulgated under the Securities
Act.
"RULE 903" means Rule 903 promulgated under the Securities
Act.
"RULE 904" means Rule 904 promulgated the Securities Act.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
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<PAGE> 30
"SENIOR DEBT" means:
(1) all Indebtedness of the Company or any Guarantor
outstanding now or hereafter under Credit Facilities of the Company or
any Guarantor and all Hedging Obligations with respect thereto;
(2) any other Indebtedness of the Company or any Guarantor
permitted to be incurred under the terms of this Indenture, 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 or any Note Guarantee; and
(3) all Obligations outstanding now or hereafter with respect
to the items listed in the preceding clauses (1) and (2); and
(4) the Company's payment obligations described in clauses (i)
and (ii) of the definition of "Permitted Seller Note Payments."
Notwithstanding anything to the contrary in the preceding three
clauses, Senior Debt will 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 Subsidiaries
or other Affiliates;
(3) any trade payables; or
(4) the portion of any Indebtedness that is incurred in
violation of this Indenture (but as to any such Indebtedness, no such
violation shall be deemed to exist for purposes of this clause (4) if
the holder(s) of such Indebtedness or their representative and the
Trustee shall have received an Officers' Certificate of the Company to
the effect that the incurrence of such Indebtedness does not (or, in
the case of revolving Indebtedness, that the incurrence of the entire
committed amount thereof at the date on which the initial borrowing
thereunder is made would not) violate this Indenture, provided that any
such Officers' Certificate is prepared and delivered in good faith).
For purposes of clarification, any amounts advanced by the holders of Senior
Debt pursuant to the terms of such Senior Debt on behalf of the Company or any
Guarantor with respect to obligations described in clause (1) or (3) of the
preceding sentence shall constitute Senior Debt.
"SHELF REGISTRATION STATEMENT" means the Shelf Registration
Statement as defined in the Registration Rights Agreement.
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<PAGE> 31
"SIGNIFICANT SUBSIDIARY" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date hereof, provided that the references to "10 percent" in such definition
shall be deemed to be "two percent".
"STATED MATURITY" means, with respect to any installment of
interest or principal on any series of Indebtedness, the date on which such
payment of interest or principal was scheduled to be paid in the original
documentation governing such Indebtedness, and shall not include any contingent
obligations to repay, redeem or repurchase any such interest or principal prior
to the date originally scheduled for the payment thereof.
"SUBSIDIARY" means, with respect to any specified Person:
(1) 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
(2) 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).
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C.
Sections 77aaa-77bbbb) as in effect on the date on which this Indenture is
qualified under the TIA, subject to Section 9.03 hereof.
"TRUSTEE" means the party named as such above until a
successor replaces it in accordance with the applicable provisions of this
Indenture and thereafter means the successor serving hereunder.
"UNRESTRICTED DEFINITIVE NOTE" means one or more Definitive
Notes that do not bear and are not required to bear the Private Placement
Legend.
"UNRESTRICTED GLOBAL NOTE" means a permanent global Note
substantially in the form of Exhibit A attached hereto that bears the Global
Note Legend and that has the "Schedule of Exchanges of Interests in the Global
Note" attached thereto, and that is deposited with or on behalf of and
registered in the name of the Depositary, representing a series of Notes that do
not bear the Private Placement Legend.
"UNRESTRICTED SUBSIDIARY" means any Subsidiary of the Company
that is designated by the Board of Directors as an Unrestricted Subsidiary
pursuant to a Board
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<PAGE> 32
Resolution and otherwise complies with Section 4.19 hereof, but only to the
extent that such Subsidiary:
(1) has no Indebtedness other than Non-Recourse Debt;
(2) 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;
(3) is a Person with respect to which neither the Company nor
any of its Restricted Subsidiaries has any direct or indirect
obligation (a) to subscribe for additional Equity Interests or (b) to
maintain or preserve such Person's financial condition or to cause such
Person to achieve any specified levels of operating results; and
(4) has not guaranteed or otherwise directly or indirectly
provided credit support for any Indebtedness of the Company or any of
its Restricted Subsidiaries.
Any designation of a Subsidiary of the Company as an
Unrestricted Subsidiary shall be evidenced to the Trustee by filing with the
Trustee a certified copy of the Board Resolution giving effect to such
designation and an Officers' Certificate certifying that such designation
complied with the preceding conditions and was permitted by the covenant
described in Section 4.07 hereof. If, at any time, any Unrestricted Subsidiary
would fail to meet the preceding requirements as an Unrestricted Subsidiary, it
shall thereafter cease to be an Unrestricted Subsidiary for purposes of the
Indenture 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 in Section 4.07 hereof, the Company shall be in default of such
covenant.
"U.S. PERSON" means a U.S. person as defined in Rule 902(o)
under the Securities Act.
"VOTING STOCK" of any Person as of any date means the Capital
Stock of such Person that is at the time entitled to vote in the election of the
Board of Directors of such Person.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing:
(1) 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
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years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment; by
(2) the then outstanding principal amount of such
Indebtedness.
"WHOLLY OWNED RESTRICTED SUBSIDIARY" of any specified Person
means a Restricted 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
Restricted Subsidiaries of such Person.
Section 1.02. OTHER DEFINITIONS.
<TABLE>
<CAPTION>
Defined in
Term Section
---- -------
<S> <C>
"AFFILIATE TRANSACTION".................................................... 4.11
"ASSET SALE OFFER"......................................................... 3.09
"AUTHENTICATION ORDER"..................................................... 2.02
"CHANGE OF CONTROL OFFER".................................................. 4.15
"CHANGE OF CONTROL PAYMENT"................................................ 4.15
"CHANGE OF CONTROL PAYMENT DATE"........................................... 4.15
"COVENANT DEFEASANCE"...................................................... 8.03
"EVENT OF DEFAULT"......................................................... 6.01
"EXCESS PROCEEDS".......................................................... 4.10
"INCUR".................................................................... 4.09
"LEGAL DEFEASANCE"......................................................... 8.02
"OFFER AMOUNT"............................................................. 3.09
"OFFER PERIOD"............................................................. 3.09
"PAYMENT DEFAULT".......................................................... 6.01
"PAYING AGENT"............................................................. 2.03
"PERMITTED DEBT"........................................................... 4.09
"PURCHASE DATE"............................................................ 3.09
"REGISTRAR"................................................................ 2.03
"RESTRICTED PAYMENTS"...................................................... 4.07
</TABLE>
Section 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the
following meanings:
"INDENTURE SECURITIES" means the Notes;
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<PAGE> 34
"INDENTURE SECURITY HOLDER" means a Holder of a Note;
"INDENTURE TO BE QUALIFIED" means this Indenture;
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the
Trustee; and
"OBLIGOR" on the Notes means the Company and any successor
obligor upon the Notes.
All other terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule under
the TIA have the meanings so assigned to them.
Section 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(c) "or" is not exclusive;
(d) words in the singular include the plural, and in the
plural include the singular;
(e) provisions apply to successive events and transactions;
and
(f) references to sections of or rules under the Securities
Act shall be deemed to include substitute, replacement of successor sections or
rules adopted by the SEC from time to time.
ARTICLE TWO
THE NOTES
Section 2.01. FORM AND DATING.
(a) GENERAL. The Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A hereto. The Notes
may have notations, legends or endorsements required by law, stock exchange rule
or usage. Each Note shall be dated the date of its authentication. The Notes
shall be in denominations of $1,000 and integral multiples thereof.
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<PAGE> 35
The terms and provisions contained in the Notes shall
constitute, and are hereby expressly made, a part of this Indenture and the
Company, the Guarantors and the Trustee, by their execution and delivery of this
Indenture, expressly agree to such terms and provisions and to be bound thereby.
However, to the extent any provision of any Note conflicts with the express
provisions of this Indenture, the provisions of this Indenture shall govern and
be controlling.
(b) GLOBAL NOTES. Notes issued in global form shall be
substantially in the form of Exhibit A attached hereto (including the Global
Note Legend thereon and the "Schedule of Exchanges of Interests in the Global
Note" attached thereto). Notes issued in definitive form shall be substantially
in the form of Exhibit A attached hereto (but without the Global Note Legend
thereon and without the "Schedule of Exchanges of Interests in the Global Note"
attached thereto). Each Global Note shall represent such of the outstanding
Notes as shall be specified therein and each shall provide that it shall
represent the aggregate principal amount of outstanding Notes from time to time
endorsed thereon and that the aggregate principal amount of outstanding Notes
represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions. Any endorsement of a Global
Note to reflect the amount of any increase or decrease in the aggregate
principal amount of outstanding Notes represented thereby shall be made by the
Trustee or the Custodian, at the direction of the Trustee, in accordance with
instructions given by the Holder thereof as required by Section 2.06 hereof.
Section 2.02. EXECUTION AND AUTHENTICATION.
One Officer shall sign the Notes for the Company by manual or
facsimile signature. The Company's seal shall be reproduced on the Notes and may
be in facsimile form.
If an Officer whose signature is on a Note no longer holds
that office at the time a Note is authenticated, the Note shall nevertheless be
valid.
A Note shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that the
Note has been authenticated under this Indenture.
The Trustee shall, upon a written order of the Company signed
by one Officer (an "AUTHENTICATION ORDER"), authenticate Notes for original
issue up to the aggregate principal amount stated in paragraph 4 of the Notes.
The aggregate principal amount of Notes outstanding at any time may not exceed
such amount except as provided in Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to
the Company to authenticate Notes. An authenticating agent may authenticate
Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders or an
Affiliate of the Company.
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<PAGE> 36
Section 2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency where Notes may
be presented for registration of transfer or for exchange ("REGISTRAR") and an
office or agency where Notes may be presented for payment ("PAYING AGENT"). The
Registrar shall keep a register of the Notes and of their transfer and exchange.
The Company may appoint one or more co-registrars and one or more additional
paying agents. The term "Registrar" includes any co-registrar and the term
"Paying Agent" includes any additional paying agent. The Company may change any
Paying Agent or Registrar without notice to any Holder. The Company shall notify
the Trustee in writing of the name and address of any Agent not a party to this
Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company or any of
its Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company
("DTC") to act as Depositary with respect to the Global Notes.
The Company initially appoints the Trustee to act as the
Registrar and Paying Agent and to act as Custodian with respect to the Global
Notes.
Section 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the
Trustee to agree in writing that the Paying Agent will hold in trust for the
benefit of Holders or the Trustee all money held by the Paying Agent for the
payment of principal, premium or Liquidated Damages, if any, or interest on the
Notes, and will notify the Trustee of any default by the Company in making any
such payment. While any such default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon payment
over to the Trustee, the Paying Agent (if other than the Company or a
Subsidiary) shall have no further liability for the money. If the Company or a
Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust
fund for the benefit of the Holders all money held by it as Paying Agent. Upon
any bankruptcy or reorganization proceedings relating to the Company, the
Trustee shall serve as Paying Agent for the Notes.
Section 2.05. HOLDER LISTS.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of all Holders and shall otherwise comply with TIA Section 312(a). If
the Trustee is not the Registrar, the Company shall furnish to the Trustee at
least seven Business Days before each interest payment date and at such other
times as the Trustee may request in writing, a list in such form and as of such
date as the Trustee may
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<PAGE> 37
reasonably require of the names and addresses of the Holders of
Notes and the Company shall otherwise comply with TIA Section 312(a).
Section 2.06. TRANSFER AND EXCHANGE.
(a) TRANSFER AND EXCHANGE OF GLOBAL NOTES. A Global Note may
not be transferred as a whole except by the Depositary to a nominee of the
Depositary, by a nominee of the Depositary to the Depositary or to another
nominee of the Depositary, or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary. All Global Notes
will be exchanged by the Company for Definitive Notes if (i) the Company
delivers to the Trustee notice from the Depositary that it is unwilling or
unable to continue to act as Depositary or that it is no longer a clearing
agency registered under the Exchange Act and, in either case, a successor
Depositary is not appointed by the Company within 120 days after the date of
such notice from the Depositary, (ii) the Company in its sole discretion
determines that the Global Notes (in whole but not in part) should be exchanged
for Definitive Notes and delivers a written notice to such effect to the Trustee
or (iii) there shall have occurred and be continuing a Default or Event of
Default with respect to the Notes. Upon the occurrence of either of the
preceding events in (i), (ii) or (iii) above, Definitive Notes shall be issued
in such names as the Depositary shall instruct the Trustee. Global Notes also
may be exchanged or replaced, in whole or in part, as provided in Sections 2.07
and 2.10 hereof. Every Note authenticated and delivered in exchange for, or in
lieu of, a Global Note or any portion thereof, pursuant to this Section 2.06 or
Section 2.07 or 2.10 hereof, shall be authenticated and delivered in the form
of, and shall be, a Global Note. A Global Note may not be exchanged for another
Note other than as provided in this Section 2.06(a), however, beneficial
interests in a Global Note may be transferred and exchanged as provided in
Section 2.06(b), (c) or (f) hereof.
(b) TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN THE
GLOBAL NOTES. The transfer and exchange of beneficial interests in the Global
Notes shall be effected through the Depositary, in accordance with the
provisions of this Indenture and the Applicable Procedures. Beneficial interests
in the Restricted Global Notes shall be subject to restrictions on transfer
comparable to those set forth herein to the extent required by the Securities
Act. Transfers of beneficial interests in the Global Notes also shall require
compliance with either subparagraph (i) or (ii) below, as applicable, as well as
one or more of the other following subparagraphs, as applicable:
(i) TRANSFER OF BENEFICIAL INTERESTS IN THE SAME GLOBAL NOTE.
Beneficial interests in any Restricted Global Note may be transferred
to Persons who take delivery thereof in the form of a beneficial
interest in the same Restricted Global Note in accordance with the
transfer restrictions set forth in the Private Placement Legend.
Beneficial interests in any Unrestricted Global Note may be transferred
to Persons who take delivery thereof in the form of a beneficial
interest in an Unrestricted Global Note. No written orders or
instructions shall be required to be delivered to the Registrar to
effect the transfers described in this Section 2.06(b)(i).
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<PAGE> 38
(ii) ALL OTHER TRANSFERS AND EXCHANGES OF BENEFICIAL INTERESTS
IN GLOBAL NOTES. In connection with all transfers and exchanges of
beneficial interests that are not subject to Section 2.06(b)(i) above,
the transferor of such beneficial interest must deliver to the
Registrar either (A) (1) a written order from a Participant or an
Indirect Participant given to the Depositary in accordance with the
Applicable Procedures directing the Depositary to credit or cause to be
credited a beneficial interest in another Global Note in an amount
equal to the beneficial interest to be transferred or exchanged and (2)
instructions given in accordance with the Applicable Procedures
containing information regarding the Participant account to be credited
with such increase or (B) (1) a written order from a Participant or an
Indirect Participant given to the Depositary in accordance with the
Applicable Procedures directing the Depositary to cause to be issued a
Definitive Note in an amount equal to the beneficial interest to be
transferred or exchanged and (2) instructions given by the Depositary
to the Registrar containing information regarding the Person in whose
name such Definitive Note shall be registered to effect the transfer or
exchange referred to in (1) above. Upon consummation of an Exchange
Offer by the Company in accordance with Section 2.06(f) hereof, the
requirements of this Section 2.06(b)(ii) shall be deemed to have been
satisfied upon receipt by the Registrar of the instructions contained
in the Letter of Transmittal delivered by the Holder of such beneficial
interests in the Restricted Global Notes. Upon satisfaction of all of
the requirements for transfer or exchange of beneficial interests in
Global Notes contained in this Indenture and the Notes or otherwise
applicable under the Securities Act, the Trustee shall adjust the
principal amount of the relevant Global Note(s) pursuant to Section
2.06(h) hereof.
(iii) TRANSFER OF BENEFICIAL INTERESTS TO ANOTHER RESTRICTED
GLOBAL NOTE. A beneficial interest in any Restricted Global Note may be
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in another Restricted Global Note if the transfer
complies with the requirements of Section 2.06(b)(ii) above and the
Registrar receives the following:
(A) if the transferee will take delivery in the form
of a beneficial interest in the 144A Global Note, then the
transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (1) thereof; and
(B) if the transferee will take delivery in the form
of a beneficial interest in the Regulation S Global Note, then
the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications in item (2)
thereof.
(iv) TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN A
RESTRICTED GLOBAL NOTE FOR BENEFICIAL INTERESTS IN THE UNRESTRICTED
GLOBAL NOTE. A beneficial interest in any Restricted Global Note may be
exchanged by any holder thereof for a beneficial interest
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<PAGE> 39
in an Unrestricted Global Note or transferred to a Person who takes
delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note if the exchange or transfer complies with the
requirements of Section 2.06(b)(ii) above and:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the holder of the beneficial interest to be
transferred, in the case of an exchange, or the transferee, in
the case of a transfer, certifies in the applicable Letter of
Transmittal that it is not (1) a Broker-Dealer, (2) a Person
participating in the distribution of the Exchange Notes or (3)
a Person who is an affiliate (as defined in Rule 144) of the
Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration
Rights Agreement;
(C) such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial
interest in a Restricted Global Note proposes to
exchange such beneficial interest for a beneficial
interest in an Unrestricted Global Note, a
certificate from such holder in the form of Exhibit C
hereto, including the certifications in item (1)(a)
thereof; or
(2) if the holder of such beneficial
interest in a Restricted Global Note proposes to
transfer such beneficial interest to a Person who
shall take delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note, a
certificate from such holder in the form of Exhibit B
hereto, including the certifications in item (4)
thereof;
and, in each such case set forth in this subparagraph (D), if
the Registrar so requests or if the Applicable Procedures so
require, an Opinion of Counsel in form reasonably acceptable
to the Registrar to the effect that such exchange or transfer
is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B)
or (D) above at a time when an Unrestricted Global Note has not yet
been issued, the Company shall issue and, upon receipt of an
Authentication Order in accordance with Section 2.02 hereof, the
Trustee shall authenticate one or more Unrestricted Global Notes in an
aggregate
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<PAGE> 40
principal amount equal to the aggregate principal amount of beneficial
interests transferred pursuant to subparagraph (B) or (D) above.
Beneficial interests in an Unrestricted Global Note cannot be
exchanged for, or transferred to Persons who take delivery thereof in
the form of, a beneficial interest in a Restricted Global Note.
(c) TRANSFER OR EXCHANGE OF BENEFICIAL INTERESTS FOR
DEFINITIVE NOTES.
(i) BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES TO
RESTRICTED DEFINITIVE NOTES. If any holder of a beneficial interest in
a Restricted Global Note proposes to exchange such beneficial interest
for a Restricted Definitive Note or to transfer such beneficial
interest to a Person who takes delivery thereof in the form of a
Restricted Definitive Note, then, upon receipt by the Registrar of the
following documentation:
(A) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a Restricted Definitive Note, a certificate from
such holder in the form of Exhibit C hereto, including the
certifications in item (2)(a) thereof;
(B) if such beneficial interest is being transferred
to a QIB in accordance with Rule 144A under the Securities
Act, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (1) thereof;
(C) if such beneficial interest is being transferred
to a Non-U.S. Person in an offshore transaction in accordance
with Rule 903 or Rule 904 under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (2) thereof;
(D) if such beneficial interest is being transferred
pursuant to an exemption from the registration requirements of
the Securities Act in accordance with Rule 144 under the
Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (3)(a)
thereof;
(E) if such beneficial interest is being transferred
to an Institutional Accredited Investor in reliance on an
exemption from the registration requirements of the Securities
Act other than those listed in subparagraphs (B) through (D)
above, a certificate to the effect set forth in Exhibit B
hereto, including the certifications, certificates and Opinion
of Counsel required by item (3) thereof, if applicable;
(F) if such beneficial interest is being transferred
to the Company or any of its Subsidiaries, a certificate to
the effect set forth in Exhibit B hereto, including the
certifications in item (3)(b) thereof; or
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<PAGE> 41
(G) if such beneficial interest is being transferred
pursuant to an effective registration statement under the
Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (3)(c)
thereof,
the Trustee shall cause the aggregate principal amount of the
applicable Global Note to be reduced accordingly pursuant to Section
2.06(h) hereof, and the Company shall execute and the Trustee shall
authenticate and deliver to the Person designated in the instructions a
Definitive Note in the appropriate principal amount. Any Definitive
Note issued in exchange for a beneficial interest in a Restricted
Global Note pursuant to this Section 2.06(c) shall be registered in
such name or names and in such authorized denomination or denominations
as the holder of such beneficial interest shall instruct the Registrar
through instructions from the Depositary and the Participant or
Indirect Participant. The Trustee shall deliver such Definitive Notes
to the Persons in whose names such Notes are so registered. Any
Definitive Note issued in exchange for a beneficial interest in a
Restricted Global Note pursuant to this Section 2.06(c)(i) shall bear
the Private Placement Legend and shall be subject to all restrictions
on transfer contained therein.
(ii) BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES TO
UNRESTRICTED DEFINITIVE NOTES. A holder of a beneficial interest in a
Restricted Global Note may exchange such beneficial interest for an
Unrestricted Definitive Note or may transfer such beneficial interest
to a Person who takes delivery thereof in the form of an Unrestricted
Definitive Note only if:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the holder of such beneficial interest, in the
case of an exchange, or the transferee, in the case of a
transfer, certifies in the applicable Letter of Transmittal
that it is not (1) a Broker-Dealer, (2) a Person participating
in the distribution of the Exchange Notes or (3) a Person who
is an affiliate (as defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration
Rights Agreement;
(C) such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial
interest in a Restricted Global Note proposes to
exchange such beneficial interest for a Definitive
Note that does not bear the Private Placement Legend,
a certificate from
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<PAGE> 42
such holder in the form of Exhibit C hereto,
including the certifications in item (1)(b) thereof;
or
(2) if the holder of such beneficial
interest in a Restricted Global Note proposes to
transfer such beneficial interest to a Person who
shall take delivery thereof in the form of a
Definitive Note that does not bear the Private
Placement Legend, a certificate from such holder in
the form of Exhibit B hereto, including the
certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if
the Registrar so requests or if the Applicable Procedures so
require, an Opinion of Counsel in form reasonably acceptable
to the Registrar to the effect that such exchange or transfer
is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
(iii) BENEFICIAL INTERESTS IN UNRESTRICTED GLOBAL NOTES TO
UNRESTRICTED DEFINITIVE NOTES. If any holder of a beneficial interest
in an Unrestricted Global Note proposes to exchange such beneficial
interest for a Definitive Note or to transfer such beneficial interest
to a Person who takes delivery thereof in the form of a Definitive
Note, then, upon satisfaction of the conditions set forth in Section
2.06(b)(ii) hereof, the Trustee shall cause the aggregate principal
amount of the applicable Global Note to be reduced accordingly pursuant
to Section 2.06(h) hereof, and the Company shall execute and the
Trustee shall authenticate and deliver to the Person designated in the
instructions a Definitive Note in the appropriate principal amount. Any
Definitive Note issued in exchange for a beneficial interest pursuant
to this Section 2.06(c)(iv) shall be registered in such name or names
and in such authorized denomination or denominations as the holder of
such beneficial interest shall instruct the Registrar through
instructions from the Depositary and the Participant or Indirect
Participant. The Trustee shall deliver such Definitive Notes to the
Persons in whose names such Notes are so registered. Any Definitive
Note issued in exchange for a beneficial interest pursuant to this
Section 2.06(c)(iv) shall not bear the Private Placement Legend.
(d) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES FOR BENEFICIAL
INTERESTS.
(i) RESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS IN
RESTRICTED GLOBAL NOTES. If any Holder of a Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a
Restricted Global Note or to transfer such Restricted Definitive Notes
to a Person who takes delivery thereof in the form of a beneficial
interest in a Restricted Global Note, then, upon receipt by the
Registrar of the following documentation:
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(A) if the Holder of such Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a
Restricted Global Note, a certificate from such Holder in the
form of Exhibit C hereto, including the certifications in item
(2)(b) thereof;
(B) if such Restricted Definitive Note is being
transferred to a QIB in accordance with Rule 144A under the
Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (1)
thereof;
(C) if such Restricted Definitive Note is being
transferred to a Non-U.S. Person in an offshore transaction in
accordance with Rule 903 or Rule 904 under the Securities Act,
a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (2) thereof;
(D) if such Restricted Definitive Note is being
transferred pursuant to an exemption from the registration
requirements of the Securities Act in accordance with Rule 144
under the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in
item (3)(a) thereof;
(E) if such Restricted Definitive Note is being
transferred to an Institutional Accredited Investor in
reliance on an exemption from the registration requirements of
the Securities Act other than those listed in subparagraphs
(B) through (D) above, a certificate to the effect set forth
in Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3)
thereof, if applicable;
(F) if such Restricted Definitive Note is being
transferred to the Company or any of its Subsidiaries, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(b) thereof; or
(G) if such Restricted Definitive Note is being
transferred pursuant to an effective registration statement
under the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in
item (3)(c) thereof,
the Trustee shall cancel the Restricted Definitive Note, increase or
cause to be increased the aggregate principal amount of, in the case of
clause (A) above, the appropriate Restricted Global Note, in the case
of clause (B) above, the 144A Global Note, and in the case of clause
(C) above, the Regulation S Global Note.
(ii) RESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS IN
UNRESTRICTED GLOBAL NOTES. A Holder of a Restricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global
Note or transfer such Restricted Definitive Note to a
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Person who takes delivery thereof in the form of a beneficial interest
in an Unrestricted Global Note only if:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the Holder, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that it is not (1) a
broker-dealer, (2) a Person participating in the distribution
of the Exchange Notes or (3) a Person who is an affiliate (as
defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration
Rights Agreement;
(C) such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Definitive Notes
proposes to exchange such Notes for a beneficial
interest in the Unrestricted Global Note, a
certificate from such Holder in the form of Exhibit C
hereto, including the certifications in item (1)(c)
thereof; or
(2) if the Holder of such Definitive Notes
proposes to transfer such Notes to a Person who shall
take delivery thereof in the form of a beneficial
interest in the Unrestricted Global Note, a
certificate from such Holder in the form of Exhibit B
hereto, including the certifications in item (4)
thereof;
and, in each such case set forth in this subparagraph (D), if
the Registrar so requests or if the Applicable Procedures so
require, an Opinion of Counsel in form reasonably acceptable
to the Registrar to the effect that such exchange or transfer
is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
Upon satisfaction of the conditions of any of the
subparagraphs in this Section 2.06(d)(ii), the Trustee shall cancel the
Definitive Notes and increase or cause to be increased the aggregate
principal amount of the Unrestricted Global Note.
(iii) UNRESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS IN
UNRESTRICTED GLOBAL NOTES. A Holder of an Unrestricted Definitive Note
may exchange such Note for
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a beneficial interest in an Unrestricted Global Note or transfer such
Definitive Notes to a Person who takes delivery thereof in the form of
a beneficial interest in an Unrestricted Global Note at any time. Upon
receipt of a request for such an exchange or transfer, the Trustee
shall cancel the applicable Unrestricted Definitive Note and increase
or cause to be increased the aggregate principal amount of one of the
Unrestricted Global Notes.
If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to subparagraphs (ii)(B),
(ii)(D) or (iii) above at a time when an Unrestricted Global Note has
not yet been issued, the Company shall issue and, upon receipt of an
Authentication Order in accordance with Section 2.02 hereof, the
Trustee shall authenticate one or more Unrestricted Global Notes in an
aggregate principal amount equal to the principal amount of Definitive
Notes so transferred.
(e) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES FOR DEFINITIVE
NOTES. Upon request by a Holder of Definitive Notes and such Holder's compliance
with the provisions of this Section 2.06(e), the Registrar shall register the
transfer or exchange of Definitive Notes. Prior to such registration of transfer
or exchange, the requesting Holder shall present or surrender to the Registrar
the Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by its attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.06(e).
(i) RESTRICTED DEFINITIVE NOTES TO RESTRICTED DEFINITIVE
NOTES. Any Restricted Definitive Note may be transferred to and
registered in the name of Persons who take delivery thereof in the form
of a Restricted Definitive Note if the Registrar receives the
following:
(A) if the transfer will be made pursuant to Rule
144A under the Securities Act, then the transferor must
deliver a certificate in the form of Exhibit B hereto,
including the certifications in item (1) thereof;
(B) if the transfer will be made pursuant to Rule 903
or Rule 904, then the transferor must deliver a certificate in
the form of Exhibit B hereto, including the certifications in
item (2) thereof; and
(C) if the transfer will be made pursuant to any
other exemption from the registration requirements of the
Securities Act, then the transferor must deliver a certificate
in the form of Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3)
thereof, if applicable.
(ii) RESTRICTED DEFINITIVE NOTES TO UNRESTRICTED DEFINITIVE
NOTES. Any Restricted Definitive Note may be exchanged by the Holder
thereof for an Unrestricted
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Definitive Note or transferred to a Person or Persons who take delivery
thereof in the form of an Unrestricted Definitive Note if:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the Holder, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that it is not (1) a
broker-dealer, (2) a Person participating in the distribution
of the Exchange Notes or (3) a Person who is an affiliate (as
defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the
Shelf Registration Statement in accordance with the
Registration Rights Agreement;
(C) any such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Restricted
Definitive Notes proposes to exchange such Notes for
an Unrestricted Definitive Note, a certificate from
such Holder in the form of Exhibit C hereto,
including the certifications in item (1)(d) thereof;
or
(2) if the Holder of such Restricted
Definitive Notes proposes to transfer such Notes to a
Person who shall take delivery thereof in the form of
an Unrestricted Definitive Note, a certificate from
such Holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if
the Registrar so requests, an Opinion of Counsel in form
reasonably acceptable to the Company to the effect that such
exchange or transfer is in compliance with the Securities Act
and that the restrictions on transfer contained herein and in
the Private Placement Legend are no longer required in order
to maintain compliance with the Securities Act.
(iii) UNRESTRICTED DEFINITIVE NOTES TO UNRESTRICTED DEFINITIVE
NOTES. A Holder of Unrestricted Definitive Notes may transfer such
Notes to a Person who takes delivery thereof in the form of an
Unrestricted Definitive Note. Upon receipt of a request to register
such a transfer, the Registrar shall register the Unrestricted
Definitive Notes pursuant to the instructions from the Holder thereof.
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(f) EXCHANGE OFFER. Upon the occurrence of the Exchange Offer
in accordance with the Registration Rights Agreement, the Company shall issue
and, upon receipt of an Authentication Order in accordance with Section 2.02,
the Trustee shall authenticate (i) one or more Unrestricted Global Notes in an
aggregate principal amount equal to the principal amount of the beneficial
interests in the Restricted Global Notes tendered for acceptance by Persons that
certify in the applicable Letters of Transmittal that (x) they are not
Broker-Dealers, (y) they are not participating in a distribution of the Exchange
Notes and (z) they are not affiliates (as defined in Rule 144) of the Company,
and accepted for exchange in the Exchange Offer and (ii) Definitive Notes in an
aggregate principal amount equal to the principal amount of the Restricted
Definitive Notes accepted for exchange in the Exchange Offer. Concurrently with
the issuance of such Notes, the Trustee shall cause the aggregate principal
amount of the applicable Restricted Global Notes to be reduced accordingly, and
the Company shall execute and the Trustee shall authenticate and deliver to the
Persons designated by the Holders of Definitive Notes so accepted Definitive
Notes in the appropriate principal amount.
(g) LEGENDS. The following legends shall appear on the face of
all Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.
(i) PRIVATE PLACEMENT LEGEND.
(A) Except as permitted by subparagraph (B) below,
each Global Note and each Definitive Note (and all Notes
issued in exchange therefor or substitution thereof) shall
bear the legend in substantially the following form:
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
ANY STATE SECURITIES LAWS. NEITHER THIS NOTE NOR ANY INTEREST
OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN
THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT. THE HOLDER OF THIS NOTE BY ITS
ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER
SUCH SECURITY, PRIOR TO THE DATE WHICH IS TWO YEARS AFTER THE
LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON
WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE
OWNER OF THIS NOTE (OR ANY PREDECESSOR OF THIS NOTE) (THE
"RESALE RESTRICTION TERMINATION DATE") ONLY (A) TO THE COMPANY
OR ANY SUBSIDIARY, (B) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE
NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO
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RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON
IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS
DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE
IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE
144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS
THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT OR (E) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE
TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i)
PURSUANT TO CLAUSE (E) PRIOR TO THE RESALE RESTRICTION
TERMINATION DATE TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY
TO EACH OF THEM, AND (ii) IN EACH OF THE FOREGOING CASES, TO
REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM APPEARING
ON THIS NOTE IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO
THE TRANSFER AGENT. THIS LEGEND WILL BE REMOVED UPON THE
REQUEST OF A HOLDER AFTER THE RESALE RESTRICTION TERMINATION
DATE.
(B) Notwithstanding the foregoing, any Global Note or
Definitive Note issued pursuant to subparagraphs (b)(iv),
(c)(ii), (c)(iii), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f)
to this Section 2.06 (and all Notes issued in exchange
therefor or substitution thereof) shall not bear the Private
Placement Legend.
(ii) GLOBAL NOTE LEGEND. Each Global Note shall bear a legend
in substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR
THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT
TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT
(I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE
REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS
GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT
TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE
MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO
SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY
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BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR
WRITTEN CONSENT OF THE COMPANY."
(h) CANCELLATION AND/OR ADJUSTMENT OF GLOBAL NOTES. At such
time as all beneficial interests in a particular Global Note have been exchanged
for Definitive Notes or a particular Global Note has been redeemed, repurchased
or canceled in whole and not in part, each such Global Note shall be returned to
or retained and canceled by the Trustee in accordance with Section 2.11 hereof.
At any time prior to such cancellation, if any beneficial interest in a Global
Note is exchanged for or transferred to a Person who will take delivery thereof
in the form of a beneficial interest in another Global Note or for Definitive
Notes, the principal amount of Notes represented by such Global Note shall be
reduced accordingly and an endorsement shall be made on such Global Note by the
Trustee or by the Depositary at the direction of the Trustee to reflect such
reduction; and if the beneficial interest is being exchanged for or transferred
to a Person who will take delivery thereof in the form of a beneficial interest
in another Global Note, such other Global Note shall be increased accordingly
and an endorsement shall be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.
(i) GENERAL PROVISIONS RELATING TO TRANSFERS AND EXCHANGES.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Global Notes
and Definitive Notes upon the Company's order or at the Registrar's
request.
(ii) No service charge shall be made to a holder of a
beneficial interest in a Global Note or to a Holder of a Definitive
Note for any registration of transfer or exchange, but the Company may
require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith (other than
any such transfer taxes or similar governmental charge payable upon
exchange or transfer pursuant to Sections 2.10, 3.06, 3.09, 4.10, 4.15
and 9.05 hereof).
(iii) The Registrar shall not be required to register the
transfer of or exchange any Note selected for redemption in whole or in
part, except the unredeemed portion of any Note being redeemed in part.
(iv) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive
Notes shall be the valid obligations of the Company, evidencing the
same debt, and entitled to the same benefits under this Indenture, as
the Global Notes or Definitive Notes surrendered upon such registration
of transfer or exchange.
(v) The Company shall not be required (A) to issue, to
register the transfer of or to exchange any Notes during a period
beginning at the opening of business 15 days before the day of a
mailing of a notice of redemption of Notes for redemption under
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Section 3.02 hereof and ending at the close of business on the day of
selection, (B) to register the transfer of or to exchange any Note so
selected for redemption in whole or in part, except the unredeemed
portion of any Note being redeemed in part or (C) to register the
transfer of or to exchange a Note between a record date and the next
succeeding interest payment date.
(vi) Prior to due presentment for the registration of a
transfer of any Note, the Trustee, any Agent and the Company may deem
and treat the Person in whose name any Note is registered as the
absolute owner of such Note for the purpose of receiving payment of
principal of and interest on such Notes and for all other purposes, and
none of the Trustee, any Agent or the Company shall be affected by
notice to the contrary.
(vii) The Trustee shall authenticate Global Notes and
Definitive Notes in accordance with the provisions of Section 2.02
hereof.
(viii) All certifications, certificates and Opinions of
Counsel required to be submitted to the Registrar pursuant to this
Section 2.06 to effect a registration of transfer or exchange may be
submitted by facsimile.
(ix) Each Holder of a Note agrees to indemnify the Company and
the Trustee against any liability that may result from the transfer,
exchange or assignment of such Holder's Note in violation of any
provision of this Indenture and/or applicable United States federal or
state securities law.
(x) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer
imposed under this Indenture or under applicable law with respect to
any transfer of any interest in any Note (including any transfers
between or among Depositary Participants or beneficial owners of
interests in any Global Note) other than to require delivery of such
certificates and other documentation or evidence as are expressly
required by, and to do so if and when expressly required by the terms
of, this Indenture, and to examine the same to determine substantial
compliance as to form with the express requirements hereof.
Section 2.07. REPLACEMENT NOTES.
If any mutilated Note is surrendered to the Trustee or the
Company and the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Note, the Company shall issue and the Trustee,
upon receipt of an Authentication Order, shall authenticate a replacement Note
if the Trustee's requirements are met. An indemnity bond must be supplied by the
Holder that is sufficient in the judgment of the Trustee and the Company to
protect the Company, the Trustee, any Agent and any authenticating agent from
any loss that any of them may suffer if a Note is replaced. The Company may
charge for its expenses in replacing a Note.
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Every replacement Note is an additional obligation of the
Company and shall be entitled to all of the benefits of this Indenture equally
and proportionately with all other Notes duly issued hereunder.
Section 2.08. OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes
authenticated by the Trustee except for those canceled by it, those delivered to
it for cancellation, those reductions in the interest in a Global Note effected
by the Trustee in accordance with the provisions hereof, and those described in
this Section as not outstanding. Except as set forth in Section 2.09 hereof, a
Note does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Note.
If a Note is replaced pursuant to Section 2.07 hereof, it
ceases to be outstanding unless the Trustee receives proof satisfactory to it
that the replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under
Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to
accrue.
If the Paying Agent (other than the Company, a Subsidiary or
an Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Notes payable on that date, then on and after that date such
Notes shall be deemed to be no longer outstanding and shall cease to accrue
interest.
Section 2.09. TREASURY NOTES.
In determining whether the Holders of the required principal
amount of Notes have concurred in any direction, waiver or consent, Notes owned
by the Company, or by any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company, shall
be considered as though not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Notes that a Responsible Officer of the
Trustee actually knows are so owned shall be so disregarded.
Section 2.10. TEMPORARY NOTES.
Until certificates representing Notes are ready for delivery,
the Company may prepare and the Trustee, upon receipt of an Authentication
Order, shall authenticate temporary Notes. Temporary Notes shall be
substantially in the form of certificated Notes but may have variations that the
Company considers appropriate for temporary Notes and as shall be reasonably
acceptable to the Trustee. Without unreasonable delay, the Company shall prepare
and the Trustee shall authenticate definitive Notes in exchange for temporary
Notes.
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Holders of temporary Notes shall be entitled to all of the
benefits of this Indenture.
Section 2.11. CANCELLATION.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall dispose of
the canceled Notes in accordance with its customary procedures (subject to the
record retention requirement of the Exchange Act). The Company may not issue new
Notes to replace Notes that it has paid or that have been delivered to the
Trustee for cancellation.
Section 2.12. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Notes,
it shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the Persons who are
Holders on a subsequent special record date, in each case at the rate provided
in the Notes and in Section 4.01 hereof. The Company shall notify the Trustee in
writing of the amount of defaulted interest proposed to be paid on each Note and
the date of the proposed payment. The Company shall fix or cause to be fixed
each such special record date and payment date, PROVIDED that no such special
record date shall be less than 10 days prior to the related payment date for
such defaulted interest. At least 15 days before the special record date, the
Company (or, upon the written request of the Company, the Trustee in the name
and at the expense of the Company) shall mail or cause to be mailed to Holders a
notice that states the special record date, the related payment date and the
amount of such interest to be paid.
Section 2.13. CUSIP NUMBERS.
The Company in issuing the Notes may use "CUSIP" numbers (if
then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in
notices of redemption as a convenience to Holders; PROVIDED that any such notice
may state that no representation is made as to the correctness of such numbers
either as printed on the Notes or as contained in any notice of a redemption and
that reliance may be placed only on the other identification numbers printed on
the Notes, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Company will promptly notify the Trustee of any
change in the "CUSIP" numbers.
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ARTICLE THREE
REDEMPTION AND PREPAYMENT;
SATISFACTION AND DISCHARGE
Section 3.01. NOTICES TO TRUSTEE.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee,
at least 45 days but not more than 60 days before a redemption date, an
Officers' Certificate setting forth (i) the clause of this Indenture pursuant to
which the redemption shall occur, (ii) the redemption date, (iii) the principal
amount of Notes to be redeemed and (iv) the redemption price.
Section 3.02. SELECTION OF NOTES TO BE REDEEMED.
If less than all of the Notes are to be redeemed or purchased
in an offer to purchase at any time, the Trustee shall select the Notes to be
redeemed or purchased among the Holders of the Notes in compliance with the
requirements of the principal national securities exchange, if any, on which the
Notes are listed or, if the Notes are not so listed, on a PRO RATA basis, by lot
or in accordance with any other method the Trustee considers fair and
appropriate. In the event of partial redemption by lot, the particular Notes to
be redeemed shall be selected, unless otherwise provided herein, not less than
30 nor more than 60 days prior to the redemption date by the Trustee from the
outstanding Notes not previously called for redemption.
The Trustee shall promptly notify the Company in writing of
the Notes selected for redemption and, in the case of any Note selected for
partial redemption, the principal amount thereof to be redeemed. Notes and
portions of Notes selected shall be in amounts of $1,000 or whole multiples of
$1,000; except that if all of the Notes of a Holder are to be redeemed, the
entire outstanding amount of Notes held by such Holder, even if not a multiple
of $1,000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
Section 3.03. NOTICE OF REDEMPTION.
Subject to the provisions of Section 3.09 hereof, at least 30
days but not more than 60 days before a redemption date, the Company shall mail
or cause to be mailed, by first class mail, a notice of redemption to each
Holder whose Notes are to be redeemed at its registered address.
The notice shall identify the Notes (including the CUSIP
number) to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the redemption date
upon surrender of such Note, a
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new Note or Notes in principal amount equal to the unredeemed portion shall be
issued upon cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such
redemption payment, interest on Notes called for redemption ceases to accrue on
and after the redemption date;
(g) the paragraph of the Notes and/or Section of this
Indenture pursuant to which the Notes called for redemption are being redeemed;
and
(h) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed on the
Notes.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; PROVIDED, HOWEVER, that the
Company shall have delivered to the Trustee, at least 45 days prior to the
redemption date, an Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph.
Section 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section
3.03 hereof, Notes called for redemption become irrevocably due and payable on
the redemption date at the redemption price. A notice of redemption may not be
conditional.
Section 3.05. DEPOSIT OF REDEMPTION PRICE.
One Business Day prior to the redemption date, the Company
shall deposit with the Trustee or with the Paying Agent money sufficient to pay
the redemption price of and accrued interest on all Notes to be redeemed on that
date. The Trustee or the Paying Agent shall promptly return to the Company any
money deposited with the Trustee or the Paying Agent by the Company in excess of
the amounts necessary to pay the redemption price of, and accrued interest on,
all Notes to be redeemed.
If the Company complies with the provisions of the preceding
paragraph, on and after the redemption date, interest shall cease to accrue on
the Notes or the portions of Notes called for redemption. If a Note is redeemed
on or after an interest record date but on or prior to the related interest
payment date, then any accrued and unpaid interest shall be paid to the Person
in whose name such Note was registered at the close of business on such record
date. If any Note called for redemption shall not be so paid upon surrender for
redemption because of
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the failure of the Company to comply with the preceding paragraph, interest
shall be paid on the unpaid principal, from the redemption date until such
principal is paid, and to the extent lawful on any interest not paid on such
unpaid principal, in each case at the rate provided in the Notes and in Section
4.01 hereof.
Section 3.06. NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, the Company
shall issue and the Trustee shall authenticate for the Holder at the expense of
the Company a new Note equal in principal amount to the unredeemed portion of
the Note surrendered.
Section 3.07. OPTIONAL REDEMPTION.
(a) Except as set forth in clause (b) of this Section 3.07,
the Company shall not have the option to redeem the Notes pursuant to this
Section 3.07 prior to April 15, 2004. Thereafter, the Company may redeem all or
a part of the Notes upon not less than 30 nor more than 60 days' notice, at the
redemption prices (expressed as percentages of principal amount) set forth below
plus accrued and unpaid interest and premium and Liquidated Damages, if any,
thereon, to the applicable redemption date, if redeemed during the twelve-month
period beginning on of the years indicated below:
Year Percentage
---- ----------
2004 104.9375%
2005 103.2910%
2006 101.6450%
2007 and thereafter 100.0000%
(b) Notwithstanding the provisions of clause (a) of this
Section 3.07, at any time prior to April 15, 2002, the Company may redeem up to
35% of the aggregate principal amount of Notes issued under the Indenture at a
redemption price of 109.8750% of the principal amount thereof, plus accrued and
unpaid interest and premium and Liquidated Damages, if any, to the redemption
date, with the net cash proceeds of one or more Qualified Equity Offerings;
PROVIDED that:
(1) at least 65% of the aggregate principal amount of Notes
issued under the Indenture remains outstanding immediately after the
occurrence of such redemption (excluding Notes held by the Company and
its Subsidiaries); and
(2) the redemption must occur within 60 days of the date of
the closing of such Qualified Equity Offering.
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Except pursuant to the preceding paragraph, the Notes will not
be redeemable at the Company's option prior to April 15, 2004.
(c) Any redemption pursuant to this Section 3.07 shall be made
pursuant to the provisions of Sections 3.01 through 3.06 hereof.
Section 3.08. MANDATORY REDEMPTION.
The Company shall not be required to make mandatory redemption
payments or sinking fund payments with respect to the Notes.
Section 3.09. OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.
In the event that, pursuant to Section 4.10 hereof, the
Company shall be required to commence an offer to all Holders to purchase Notes
(an "ASSET SALE OFFER"), it shall follow the procedures specified below.
The Asset Sale Offer shall remain open for a period of 20
Business Days following its commencement and no longer, except to the extent
that a longer period is required by applicable law (the "OFFER PERIOD"). No
later than five Business Days after the termination of the Offer Period (the
"PURCHASE DATE"), the Company shall purchase the principal amount of Notes
required to be purchased pursuant to Section 4.10 hereof (the "OFFER AMOUNT")
or, if less than the Offer Amount has been tendered, all Notes tendered in
response to the Asset Sale Offer. Payment for any Notes so purchased shall be
made in the same manner as interest payments are made.
If the Purchase Date is on or after an interest record date
and on or before the related interest payment date, any accrued and unpaid
interest shall be paid to the Person in whose name a Note is registered at the
close of business on such record date, and no additional interest shall be
payable to Holders who tender Notes pursuant to the Asset Sale Offer.
Upon the commencement of an Asset Sale Offer, the Company
shall send, by first class mail, a notice to the Trustee and each of the
Holders, with a copy to the Trustee. The notice shall contain all instructions
and materials necessary to enable such Holders to tender Notes pursuant to the
Asset Sale Offer. The Asset Sale Offer shall be made to all Holders. The notice,
which shall govern the terms of the Asset Sale Offer, shall state:
(a) that the Asset Sale Offer is being made pursuant to this
Section 3.09 and Section 4.10 hereof and the length of time the Asset Sale Offer
shall remain open;
(b) the Offer Amount, the purchase price and the Purchase
Date;
(c) that any Note not tendered or accepted for payment shall
continue to accrete or accrue interest;
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(d) that, unless the Company defaults in making such payment,
any Note (or portion thereof) accepted for payment pursuant to the Asset Sale
Offer shall cease to accrete or accrue interest after the Purchase Date;
(e) that Holders electing to have a Note purchased pursuant to
an Asset Sale Offer may elect to have Notes purchased in integral multiples of
$1,000 only;
(f) that Holders electing to have a Note purchased pursuant to
any Asset Sale Offer shall be required to surrender the Note, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Note
completed, or transfer by book-entry transfer, to the Company, a depositary, if
appointed by the Company, or a Paying Agent at the address specified in the
notice at least three days before the Purchase Date;
(g) that Holders shall be entitled to withdraw their election
if the Company, the depositary or the Paying Agent, as the case may be,
receives, not later than the expiration of the Offer Period, a facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Note the Holder delivered for purchase and a statement that such
Holder is withdrawing his election to have such Note purchased;
(h) that, if the aggregate principal amount of Notes
surrendered by Holders exceeds the Offer Amount, the Company shall select the
Notes to be purchased on a PRO RATA basis (with such adjustments as may be
deemed appropriate by the Company so that only Notes in denominations of $1,000,
or integral multiples thereof, shall be purchased); and
(i) that Holders whose Notes were purchased only in part shall
be issued new Notes equal in principal amount to the unpurchased portion of the
Notes surrendered (or transferred by book-entry transfer).
On or before the Purchase Date, the Company shall, to the
extent lawful, accept for payment, on a PRO RATA basis to the extent necessary,
the Offer Amount of Notes or portions thereof tendered pursuant to the Asset
Sale Offer, or if less than the Offer Amount has been tendered, all Notes
tendered, and shall deliver to the Trustee an Officers' Certificate stating that
such Notes or portions thereof were accepted for payment by the Company in
accordance with the terms of this Section 3.09. The Company, the Depositary or
the Paying Agent, as the case may be, shall promptly (but in any case not later
than five days after the Purchase Date) mail or deliver to each tendering Holder
an amount equal to the purchase price of the Notes tendered by such Holder and
accepted by the Company for purchase, and the Company shall promptly issue a new
Note, and the Trustee, upon written request from the Company shall authenticate
and mail or deliver such new Note to such Holder, in a principal amount equal to
any unpurchased portion of the Note surrendered. Any Note not so accepted shall
be promptly mailed or delivered by the Company to the Holder thereof. The
Company shall publicly announce the results of the Asset Sale Offer on the
Purchase Date.
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Other than as specifically provided in this Section 3.09, any
purchase pursuant to this Section 3.09 shall be made pursuant to the provisions
of Sections 3.01 through 3.06 hereof.
Section 3.10. SATISFACTION AND DISCHARGE OF INDENTURE. This
Indenture shall be discharged and shall cease to be of further effect as to all
Notes issued thereunder, and the Trustee, at the expense of the Company, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture, when
(i) either
(a) all Notes that have been authenticated (except
lost, stolen or destroyed Notes that have been replaced or
paid and Notes for whose payment money has theretofore been
deposited in trust and thereafter repaid to the Company) have
been delivered to the Trustee for cancellation; or
(b) all Notes that have not been delivered to the
Trustee for cancellation have become due and payable by reason
of the making of a notice of redemption or otherwise or will
become due and payable within one year and the Company or any
Guarantor has irrevocably deposited or caused to be deposited
with the Trustee as trust funds in trust solely for the
benefit of the Holders, cash in U.S. dollars, non-callable
Government Securities, or a combination thereof, in such
amounts as will be sufficient without consideration of any
reinvestment of interest, to pay and discharge the entire
indebtedness on the Notes not delivered to the Trustee for
cancellation for principal, premium and Liquidated Damages, if
any, and accrued interest to the date of maturity or
redemption;
(ii) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or shall occur as a result of
such deposit and such deposit will not result in a breach or violation
of, or constitute a default under, any other instrument to which the
Company or any Guarantor is a party or by which the Company or any
Guarantor is bound;
(iii) the Company or any Guarantor has paid or caused to be
paid all sums payable by it under this Indenture; and
(iv) the Company has delivered irrevocable instructions to the
Trustee under this Indenture to apply the deposited money toward the
payment of the Notes at maturity or the redemption date, as the case
may be.
In addition, the Company must deliver an Officers' Certificate
and an Opinion of Counsel to the Trustee stating that all conditions precedent
to satisfaction and discharge have been satisfied.
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Section 3.11. APPLICATION OF TRUST MONEY. All money deposited
with the Trustee pursuant to Section 3.10 shall be held in trust and applied by
it, in accordance with the provisions of the Notes and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Persons
entitled thereto, of the principal (and premium and Liquidated Damages, if any)
and interest for whose payment such money has been deposited with the Trustee;
but such money need not be segregated from other funds except to the extent
required by law.
ARTICLE FOUR
COVENANTS
Section 4.01. PAYMENT OF NOTES.
The Company shall pay or cause to be paid the principal of,
premium, if any, and interest on the Notes on the dates and in the manner
provided in the Notes. Principal, premium, if any, and interest shall be
considered paid on the date due if the Paying Agent, if other than the Company
or a Subsidiary thereof, holds as of 11:00 a.m. Eastern Time on the due date
money deposited by the Company in immediately available funds and designated for
and sufficient to pay all principal, premium, if any, and interest then due. The
Company shall pay all Liquidated Damages, if any, in the same manner on the
dates and in the amounts set forth in the Registration Rights Agreement.
The Company shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue principal at the
rate equal to 1% per annum in excess of the then applicable interest rate on the
Notes to the extent lawful; it shall pay interest (including postpetition
interest in any proceeding under any Bankruptcy Law) on overdue installments of
interest, and Liquidated Damages (without regard to any applicable grace period)
at the same rate to the extent lawful.
Section 4.02. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in the Borough of Manhattan, the
City of New York, an office or agency (which may be an office of the Trustee or
an agent of the Trustee, Registrar or co-registrar) where Notes may be
surrendered for registration of transfer or for exchange and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may be
served. The Company shall give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee.
The Company may also from time to time designate one or more
other offices or agencies where the Notes may be presented or surrendered for
any or all such purposes and may
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from time to time rescind such designations; PROVIDED, HOWEVER, that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in the Borough of Manhattan, the City
of New York for such purposes. The Company shall give prompt written notice to
the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of
the Trustee as one such office or agency of the Company in accordance with
Section 2.03 of this Indenture.
Section 4.03. REPORTS.
(a) Whether or not required by the rules and regulations of
the SEC, so long as any Notes are outstanding, the Company shall furnish to the
Holders of Notes, within the time periods specified in the SEC's rules and
regulations (i) all quarterly and annual financial information that would be
required to be contained in a filing with the SEC 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 SEC on Form 8-K if the Company were required to file such
reports, in each case, within the time periods specified in the SEC's rules and
regulations.
If the Company has designated any of its Subsidiaries as
Unrestricted Subsidiaries, then the quarterly and annual financial information
required by the preceding paragraph shall include a reasonably detailed
presentation, either on the face of the financial statements or in the footnotes
thereto, and in Management's Discussion and Analysis of Financial Condition and
Results of Operations, of the financial condition and results of operations of
the Company and its Restricted Subsidiaries separate from the financial
condition and results of operations of the Unrestricted Subsidiaries of the
Company. In addition, whether or not required by the rules and regulations of
the SEC, the Company shall file a copy of all such information and reports with
the SEC for public availability within the time periods specified in the SEC's
rules and regulations (unless the SEC will not accept such a filing) and make
such information available to securities analysts and prospective investors upon
request. The Company shall at all times comply with TIA Section 314(a).
(b) For so long as any Notes remain outstanding, the Company
shall furnish to the Holders 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.
(c) Delivery of such reports, information and documents to the
Trustee pursuant to this Section 4.03 is for informational purposes only and the
Trustee's receipt of such shall not constitute constructive notice of any
information contained therein or determinable from
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information contained therein, including the Company's compliance with any of
its covenants hereunder (as to which the Trustee is entitled to rely exclusively
on Officers' Certificates).
Section 4.04. COMPLIANCE CERTIFICATE.
(a) The Company shall deliver to the Trustee, within 90 days
after the end of each fiscal year, an Officers' Certificate stating that a
review of the activities of the Company and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under this Indenture, and further
stating, as to each such Officer signing such certificate, that to the best of
his or her knowledge the Company has kept, observed, performed and fulfilled
each and every covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and conditions of this
Indenture (or, if a Default or Event of Default shall have occurred, describing
all such Defaults or Events of Default of which he or she may have knowledge and
what action the Company is taking or proposes to take with respect thereto) and
that to the best of his or her knowledge no event has occurred and remains in
existence by reason of which payments on account of the principal of or
interest, if any, on the Notes is prohibited or if such event has occurred, a
description of the event and what action the Company is taking or proposes to
take with respect thereto.
(b) So long as not contrary to the then current
recommendations of the American Institute of Certified Public Accountants, the
year-end financial statements delivered pursuant to Section 4.03(a) above shall
be accompanied by a written statement of the Company's independent public
accountants (who shall be a firm of established national reputation) that in
making the examination necessary for certification of such financial statements,
nothing has come to their attention that would lead them to believe that the
Company has violated any provisions of Article Four or Article Five hereof or,
if any such violation has occurred, specifying the nature and period of
existence thereof, it being understood that such accountants shall not be liable
directly or indirectly to any Person for any failure to obtain knowledge of any
such violation.
(c) The Company shall, so long as any of the Notes are
outstanding, deliver to the Trustee, as soon as possible and in any event within
five days after any Officer becomes aware of any Default or Event of Default, an
Officers' Certificate specifying such Default or Event of Default and what
action the Company is taking or proposes to take with respect thereto.
Section 4.05. TAXES.
The Company shall pay, and shall cause each of its
Subsidiaries to pay, prior to delinquency, all material taxes, assessments, and
governmental levies except such as are contested in good faith and by
appropriate proceedings or where the failure to effect such payment is not
adverse in any material respect to the Holders of the Notes.
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Section 4.06. STAY, EXTENSION AND USURY LAWS.
The Company covenants (to the extent that it may lawfully do
so) that it shall not at any time insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay, extension or
usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and the Company and
each of the Guarantors (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
shall not, by resort to any such law, hinder, delay or impede the execution of
any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law has been enacted.
Section 4.07. RESTRICTED PAYMENTS.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly:
(1) 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 (including, without limitation, any
payment in connection with any merger or consolidation involving the
Company or any of its Restricted Subsidiaries) or to the direct or
indirect holders of the Company's or any of its Restricted
Subsidiaries' Equity Interests in their capacity as such (other than
dividends or distributions payable in Equity Interests (other than
Disqualified Stock) of the Company or to the Company or a Restricted
Subsidiary of the Company);
(2) purchase, redeem or otherwise acquire or retire for value
(including, without limitation, in connection with any merger or
consolidation involving the Company) any Equity Interests of the
Company, any direct or indirect parent of the Company or any Subsidiary
of the Company (other than a Wholly Owned Restricted Subsidiary);
(3) make any payment on or with respect to, or purchase,
redeem, defease or otherwise acquire or retire for value any
Indebtedness that is subordinated to the Notes or the Note Guarantees,
except a payment of interest or principal at the Stated Maturity
thereof; or
(4) make any Restricted Investment (all such payments and
other actions set forth in clauses (1) through (4) above being
collectively referred to as "RESTRICTED PAYMENTS"),
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unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof; and
(2) the Company would, at the time of such Restricted Payment
and 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 Section 4.09 hereof; and
(3) such Restricted Payment, together with the aggregate
amount of all other Restricted Payments made by the Company and its
Restricted Subsidiaries after the date of the Indenture (excluding
Restricted Payments permitted by clauses (2) and (3) of the next
succeeding paragraph), is less than the sum, without duplication, of:
(a) 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 Indenture 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
(b) 100% of the aggregate net cash proceeds received
by the Company since the date of this Indenture as a
contribution to its common equity capital or from the issue or
sale of Equity Interests of the Company (other than
Disqualified Stock) or from the issue or sale of convertible
or exchangeable Disqualified Stock or convertible or
exchangeable debt securities of the Company that have been
converted into or exchanged for such Equity Interests (other
than Equity Interests (or Disqualified Stock or debt
securities) sold to a Subsidiary of the Company); PLUS
(c)(i) to the extent that any Restricted Investment
that was made after the date of the Indenture is sold for cash
or otherwise liquidated or repaid for cash, an amount (to the
extent not included in Consolidated Net Income) equal to the
lesser of (x) the cash return of capital with respect to such
Restricted Investment (less the cost of disposition, if any)
and (y) the initial amount of such Restricted Investment and
(ii) in the case of the designation of an Unrestricted
Subsidiary as a Restricted Subsidiary (as long as the
designation of such Subsidiary as an Unrestricted Subsidiary
was deemed a Restricted Investment) an amount equal to the
lesser of (x) the fair market value of all outstanding
Investments owned by the Company and its Restricted
Subsidiaries in such Unrestricted Subsidiary and (y) the
amount of the Restricted Investment deemed made at the time
the Subsidiary was designated as an Unrestricted Subsidiary;
PLUS
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(d) $5.0 million.
So long as no Default has occurred and is continuing or would
be caused thereby (other than in the case of clause (1) below), the preceding
provisions will not prohibit:
(1) the payment of any dividend within 60 days after the date
of declaration thereof, if at said date of declaration such payment
would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or
other acquisition of any subordinated Indebtedness of the Company or
any Guarantor or of any Equity Interests of the Company in exchange
for, or out of the net cash proceeds of the substantially concurrent
sale (other than to a Subsidiary of the Company) of, Equity Interests
of the Company (other than Disqualified Stock); PROVIDED that the
amount of any such net cash proceeds that are utilized for any such
redemption, repurchase, retirement, defeasance or other acquisition
shall be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase or other
acquisition of subordinated Indebtedness of the Company or any
Guarantor with the net cash proceeds from an incurrence of Permitted
Refinancing Indebtedness;
(4) the payment of any dividend by a Restricted Subsidiary of
the Company to the holders of its common Equity Interests on a pro rata
basis;
(5) the repurchase, redemption or other acquisition or
retirement for value of any Equity Interests of the Company or any
Restricted Subsidiary of the Company held by employees of the Company
or its Subsidiaries upon death, disability or termination of
employment; PROVIDED that the aggregate price paid for all such
repurchased, redeemed, acquired or retired Equity Interests shall not
exceed $500,000 in any twelve-month period;
(6) the one-time dividend or distribution of the Company's
direct or indirect interests in the Hockey Club and in the National Car
Rental Center, together with, at the option of the Company, all or a
portion of any other assets related to the sports and entertainment
segment of the Company, PROVIDED that the Fixed Charge Coverage Ratio
for the Company's most recently ended four full fiscal quarters for
which internal financial statements are available immediately preceding
the date on which such dividend or distribution is made would have been
at least 2.25 to 1, determined on a pro forma basis, as if the dividend
or distribution had been made at the beginning of such four-quarter
period;
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(7) the repurchase of Equity Interests of the Company that may
be deemed to occur upon the exercise of options to acquire Capital
Stock of the Company if such Equity Interests represent a portion of
the exercise price of such options;
(8) any Permitted Seller Note Payments;
(9) any distributions under Section 5.01(b) of the Limited
Partnership Agreement ("BRHC LIMITED PARTNERSHIP AGREEMENT") of
Panthers BRHC Limited, a Florida limited partnership, dated June 25,
1997 (which limited partnership owns the Boca Raton Resort and Club) in
respect of income tax liabilities of Boca Raton Hotel and Club Limited
Partnership (which formerly owned the Boca Raton Resort and Club)
arising from its status as a non-managing general partner of Panthers
BRHC Limited, and any distributions under Section 5.01(c) of the BRHC
Limited Partnership Agreement to pay Boca Raton Hotel and Club Limited
Partnership its reasonable administrative costs, plus the $75,000
annual amount due thereunder; and
(10) cash payments in lieu of fractional shares issuable as
dividends on Equity Interests of the Company in an amount, when taken
together with all other cash payments made pursuant to this clause (10)
since the date of this Indenture, not to exceed $500,000.
The amount of all Restricted Payments (other than cash) shall
be the fair market value on the date of the Restricted Payment of the asset(s)
or securities proposed to be transferred or issued to or by the Company or such
Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair
market value of any assets or securities that are required to be valued by this
Section 4.07 shall be determined by the Board of Directors whose resolution with
respect thereto shall be delivered to the Trustee. Not later than the date of
making any Restricted Payment, the Company shall deliver to the Trustee an
Officers' Certificate stating that such Restricted Payment is permitted and
setting forth the basis upon which the calculations required by this Section
4.07 were computed, together with a copy of any fairness opinion or appraisal
required by this Indenture.
Section 4.08. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING
SUBSIDIARIES.
The Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, create or permit to exist or
become effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to:
(1) pay dividends or make any other distributions on its
Capital Stock to the Company or any of its Restricted Subsidiaries, or
with respect to any other interest or participation in, or measured by,
its profits, or pay any indebtedness owed to the Company or any of its
Restricted Subsidiaries;
(2) make loans or advances to the Company or any of its
Restricted Subsidiaries; or
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(3) transfer any of its properties or assets to the Company or
any of its Restricted Subsidiaries.
However, the preceding restrictions will not apply to
encumbrances or restrictions existing under or by reason of:
(1) Existing Indebtedness and Indebtedness under the Credit
Agreements, in each case as in effect on the date of this Indenture,
and any amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings thereof, PROVIDED
that such amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacement or refinancings are not materially
more restrictive, taken as a whole, with respect to such dividend and
other payment restrictions than those contained in such Existing
Indebtedness and Indebtedness under Credit Agreements, as in effect on
the date of the Indenture;
(2) the Indenture, the Notes and the Note Guarantees;
(3) applicable law;
(4)(A) 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 acquisition (except to the
extent such Indebtedness was incurred in connection with or in
contemplation of 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 of the Indenture to be incurred, and (B) in
the case of any such instruments of a Guarantor, any amendments,
modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings thereof, PROVIDED that the
amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings are not
materially more restrictive, taken as a whole, with respect to such
dividend and other payment restrictions than those contained in such
instrument at the time of acquisition;
(5) customary non-assignment provisions in leases entered into
in the ordinary course of business and consistent with past practices;
(6) Capital Lease Obligations, mortgage financings or purchase
money obligations of a Guarantor permitted to be incurred under this
Indenture that imposed restrictions of the nature described in clause
(3) of the preceding paragraph on the property acquired, constructed or
improved through such Capital Lease Obligations, mortgage financing or
purchase money obligations;
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(7) any agreement for the sale or other disposition of a
Restricted Subsidiary that restricts distributions by that Restricted
Subsidiary pending its sale or other disposition;
(8) Permitted Refinancing Indebtedness, PROVIDED that the
restrictions contained in the agreements governing such Permitted
Refinancing Indebtedness are not materially more restrictive, taken as
a whole, than those contained in the agreements governing the
Indebtedness being refinanced;
(9) Liens securing Indebtedness that limit the right of the
debtor to dispose of the assets subject to such Lien; and
(10) mortgage financings of the Company or a Guarantor not
otherwise covered in clauses (1) through (9) above and permitted to be
incurred under the Indenture so long as (A) such encumbrances and
restrictions (x) apply only in the event of a payment default or a
default with respect to a financial covenant contained in such
financings or (y) arise in connection with the creation of reserves for
furniture, fixture and equipment, taxes, insurance, interest, and for
capital repair and replacement or similar reserves, (B) the
encumbrances and restrictions are not materially more disadvantageous
to the Holders of Notes than is customary in comparable financings and
(C) the Company determines that (absent any payment default or a
default with respect to a financial covenant contained in such
financings) any such encumbrances or restrictions will not materially
affect the Company's ability to make interest and principal payments on
the Notes.
Section 4.09. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, issue,
assume, guarantee or otherwise become directly or indirectly liable,
contingently or otherwise, with respect to (collectively, "INCUR" or the
"INCURRENCE") any Indebtedness (including Acquired Debt), and the Company will
not issue any Disqualified Stock and the Company will not permit any of its
Restricted Subsidiaries to issue any Disqualified Stock or preferred stock;
PROVIDED, HOWEVER, that the Company may incur Indebtedness (including Acquired
Debt) or issue Disqualified Stock, and a Guarantor may incur Indebtedness or
issue Disqualified Stock or preferred stock, if the Fixed Charge Coverage Ratio
for the Company's most recently ended four full fiscal quarters for which
internal financial statements are available immediately preceding the date on
which such additional Indebtedness is incurred or such Disqualified Stock or
preferred stock is issued would have been at least 2 to 1, 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 preferred stock or
Disqualified Stock had been issued, as the case may be, at the beginning of such
four-quarter period.
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The first paragraph of this Section 4.09 will not prohibit the
incurrence of any of the following items of Indebtedness (collectively,
"PERMITTED DEBT"):
(1) the incurrence by the Company and any Guarantor of
revolving credit Indebtedness and letters of credit under Credit
Facilities in an aggregate principal amount at any one time outstanding
under this clause (1)(with letters of credit being deemed to have a
principal amount equal to the maximum potential liability of the
Company and the Guarantors and the Guarantors thereunder) not to exceed
$200.0 million LESS the aggregate amount of all Net Proceeds of Asset
Sales applied by the Company or any Guarantor to repay any revolving
credit Indebtedness under a Credit Facility and effect a corresponding
commitment reduction thereunder pursuant to Section 4.10;
(2) the incurrence by the Company and any Guarantor of the
Existing Indebtedness;
(3) the incurrence by the Company and the Guarantors of
Indebtedness represented by the Notes and the related Note Guarantees
to be issued on the date of this Indenture and the Exchange Notes and
the related Note Guarantees to be issued pursuant to the Registration
Rights Agreement;
(4) the incurrence by the Company or any Guarantor of
Indebtedness represented by Capital Lease Obligations, mortgage
financings or purchase money obligations, in each case, incurred for
the purpose of financing all or any part of the purchase price or cost
of construction or improvement of property, plant or equipment used in
the business of the Company or such Guarantor (including any
refinancing thereof), in an aggregate principal amount not to exceed
$10.0 million at any time outstanding;
(5) the incurrence by the Company or any of Guarantor of
Permitted Refinancing Indebtedness in exchange for, or the net proceeds
of which are used to refund, refinance or replace Indebtedness (other
than intercompany Indebtedness) that was permitted by the Indenture to
be incurred under the first paragraph of this Section 4.09 or clause
(2), (3) or (5) of this paragraph;
(6) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among the Company
and any of its Wholly Owned Restricted Subsidiaries; PROVIDED, HOWEVER,
that:
(a) if the Company or any Guarantor is the obligor on
such Indebtedness, such Indebtedness must be expressly
subordinated to the prior payment in full in cash of all
Obligations with respect to the Notes, in the case of the
Company, or the Note Guarantee, in the case of a Guarantor;
and
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(b)(i) any subsequent issuance or transfer of Equity
Interests that results in any such Indebtedness being held by
a Person other than the Company or a Restricted Subsidiary
thereof and (ii) any sale or other transfer of any such
Indebtedness to a Person that is not either the Company or a
Wholly Owned Restricted Subsidiary thereof; shall be deemed,
in each case, to constitute an incurrence of such Indebtedness
by the Company or such Restricted Subsidiary, as the case may
be, that was not permitted by this clause (6);
(7) the incurrence by the Company or any of its Restricted
Subsidiaries of:
(a) Hedging Obligations that are incurred for the
purpose of fixing or hedging interest rate risk with respect
to any floating rate Indebtedness that is permitted by the
terms of this Indenture to be outstanding; and
(b) Currency Agreements entered into in the ordinary
course of business in respect of assets or obligations
denominated in a foreign currency;
(8) the guarantee by the Company or any of the Guarantors of
Indebtedness of the Company or a Restricted Subsidiary of the Company
that was permitted to be incurred by another provision of this Section
4.09;
(9) the accrual of interest, the accretion or amortization of
original issue discount, the payment of interest on any Indebtedness of
the Company or any Guarantor in the form of additional Indebtedness
with the same terms, and the payment of dividends on Disqualified Stock
in the form of additional shares of the same class of Disqualified
Stock will not be deemed to be an incurrence of Indebtedness or an
issuance of Disqualified Stock for purposes of this covenant; PROVIDED,
in each such case, that the amount thereof is included in Fixed Charges
of the Company as accrued;
(10) 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 that was not permitted by this
clause (10);
(11) Indebtedness of the Company or any Guarantor arising from
the honoring by a bank or other financial institution of a check, draft
or similar instrument inadvertently (except in the case of daylight
overdrafts) drawn against insufficient funds in the ordinary course of
business; PROVIDED, HOWEVER, that such Indebtedness is extinguished
within two business days of incurrence;
(12) Indebtedness of the Company or any Guarantor represented
by letters of credit for the account of the Company or such Restricted
Subsidiary, as the case may be,
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in order to provide security for workers' compensation claims, payment
obligations in connection with self-insurance or similar requirements
in the ordinary course of business; and
(13) the incurrence by the Company or any Guarantor of
additional Indebtedness (including any refinancings thereof) in an
aggregate principal amount (or accreted value, as applicable) at any
time outstanding, not to exceed $25.0 million.
For purposes of determining compliance with this Section 4.09,
in the event that an item of proposed Indebtedness meets the criteria of more
than one of the categories of Permitted Debt described in clauses (1) through
(13) above, or is entitled to be incurred pursuant to the first paragraph of
this Section 4.09, the Company will be permitted to classify such item of
Indebtedness on the date of its incurrence in any manner that complies with this
Section 4.09.
Section 4.10. ASSET SALES.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, consummate an Asset Sale unless:
(1) 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 (as determined at the time a legally
binding agreement is entered into with respect to such Asset Sale) of
the assets or Equity Interests issued or sold or otherwise disposed of;
(2) if such fair market value exceeds $10.0 million, the Board
of Directors of the Company shall have determined that such Asset Sale
is fair and reasonable to, and in the best interests of, the Company,
as evidenced by a resolution of the Board of Directors set forth in an
Officers' Certificate delivered to the Trustee; and
(3) at least 75% of the consideration therefor received by the
Company or such Restricted Subsidiary is in the form of cash or Cash
Equivalents. For purposes of this provision, each of the following
shall be deemed to be cash:
(a) 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 Note Guarantee) 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
(b) any securities, notes or other obligations
received by the Company or any such Restricted Subsidiary from
such transferee that are contemporaneously (subject to
ordinary settlement periods) converted by the
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Company or such Restricted Subsidiary into cash (to the extent
of the cash received in that conversion).
Within 365 days after the receipt of any Net Proceeds from an
Asset Sale, the Company may apply such Net Proceeds at its option:
(1) to repay Senior Debt and, if the Senior Debt repaid is
revolving credit Indebtedness, to correspondingly reduce commitments
with respect thereto;
(2) to acquire all or substantially all of the assets of, or a
majority of the Voting Stock of, another Permitted Business;
(3) to make a capital expenditure in or that is used or useful
in a Permitted Business; or
(4) to acquire other long-term assets that are used or useful
in a Permitted Business.
In the case of Investments under (2), (3) and (4) above, the Company may, within
365 days after the receipt of Net Proceeds from an Asset Sale, enter into a
legally binding agreement to invest such Net Proceeds within one year. If any
such legally binding agreement to invest such Net Proceeds is terminated, then
the Company may, within 90 days of such termination or within 365 days of such
Asset Sale, whichever is later, invest such Net Proceeds as provided in clause
(2), (3) or (4) in the preceding paragraph.
Pending the final application of any such Net Proceeds, the
Company may temporarily reduce revolving credit borrowings or otherwise invest
such Net Proceeds in any manner that is not prohibited by this Indenture.
Any Net Proceeds from Asset Sales that are not applied or
invested as provided in the two preceding paragraphs will constitute "EXCESS
PROCEEDS." When the aggregate amount of Excess Proceeds exceeds $15.0 million,
the Company will make an Asset Sale Offer to all Holders of Notes and all
holders of other Indebtedness that is PARI PASSU with the Notes containing
provisions similar to those set forth in this Indenture with respect to offers
to purchase or redeem with the proceeds of sales of assets to purchase the
maximum principal amount of Notes and such other PARI PASSU Indebtedness that
may be purchased out of the Excess Proceeds. The offer price in any Asset Sale
Offer will be equal to 100% of principal amount plus accrued and unpaid interest
and Liquidated Damages, if any, to the date of purchase, and will be payable in
cash. If any Excess Proceeds remain after consummation of an Asset Sale Offer,
the Company may use such Excess Proceeds for any purpose not otherwise
prohibited by this Indenture. If the aggregate principal amount of Notes and
such other PARI PASSU Indebtedness tendered into such Asset Sale Offer exceeds
the amount of Excess Proceeds, the Trustee shall select the Notes and such other
PARI PASSU Indebtedness to be purchased on a pro rata basis based on the
principal
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amount of Notes and such other PARI PASSU Indebtedness tendered. Upon completion
of each 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 each
repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with the Asset Sales
provisions of this Indenture, the Company will comply with the applicable
securities laws and regulations and will not be deemed to have breached its
obligations under the Asset Sale provisions of this Indenture by virtue of such
conflict.
Section 4.11. TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall 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 transaction,
contract, agreement, understanding, loan, advance or guarantee with, or for the
benefit of, any Affiliate (each, an "AFFILIATE TRANSACTION"), unless:
(1) 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
(2) the Company delivers to the Trustee:
(a) with respect to any Affiliate Transaction or
series of related Affiliate Transactions involving aggregate
consideration in excess of $1.0 million, an Officers'
Certificate certifying that such Affiliate Transaction
complies with this Section 4.11; PROVIDED that such Officers'
Certificate shall not be required with respect to any
Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of
$1.0 million and less than $5.0 million where such Transaction
or Transactions are incurred in the ordinary course of
business of the Company or such Restricted Subsidiary;
(b) 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
Board of Directors set forth in an Officers' Certificate
certifying that such Affiliate Transaction complies with this
Section 4.11 and that such Affiliate Transaction has been
approved by a majority of the disinterested members of the
Board of Directors; and
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(c) with respect to any Affiliate Transaction or
series of related Affiliate Transactions involving aggregate
consideration in excess of $15.0 million, an opinion as to the
fairness to the Company or such Restricted Subsidiary of such
Affiliate Transaction from a financial point of view issued by
an accounting, appraisal or investment banking firm of
national standing.
The following items shall not be deemed to be Affiliate
Transactions and, therefore, will not be subject to the provisions of the prior
paragraph:
(1) any employment agreement entered into by the Company or
any of its Restricted Subsidiaries in the ordinary course of business
and consistent with the past practice of the Company or such Restricted
Subsidiary;
(2) transactions between or among the Company and/or its
Restricted Subsidiaries;
(3) payment of reasonable directors fees to Persons who are
not otherwise Affiliates of the Company;
(4) sales of Equity Interests (other than Disqualified Stock)
to Affiliates of the Company;
(5) Restricted Payments that are permitted by Section 4.07;
and
(6) any written agreement in existence on the date of this
Indenture between the Company and any Affiliate, and amendments from
time to time thereto, provided that any such amendment is not less
favorable in any material respect to the Company than the terms of such
agreement as in effect on the date of this Indenture.
Section 4.12. LIENS.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, create, incur, assume or otherwise cause or suffer
to exist or become effective any Lien of any kind securing Indebtedness,
Attributable Debt or trade payables (other than Permitted Liens) upon any of
their property or assets, now owned or hereafter acquired, unless:
(a) in the case of Liens securing Indebtedness, Attributable
Debt or trade payables (other than Permitted Liens) that are expressly
subordinated in right of payment to the Notes, the Notes are secured on
a senior basis to the obligations so secured until such time as such
obligations are no longer secured by a Lien; and
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(b) in all other cases, all payments due under the Indenture
and the Notes are secured on an equal and ratable basis with the
obligations so secured until such time as such obligations are no
longer secured by a Lien.
Section 4.13. BUSINESS ACTIVITIES.
The Company shall not, and shall not permit any Restricted
Subsidiary to, engage in any business other than Permitted Businesses, except to
such extent as would not be material to the Company and its Restricted
Subsidiaries taken as a whole.
Section 4.14. CORPORATE EXISTENCE.
Subject to Article Five hereof, the Company shall do or cause
to be done all things necessary to preserve and keep in full force and effect
(i) its corporate existence, and the corporate, partnership or other existence
of each of its Subsidiaries, in accordance with the respective organizational
documents (as the same may be amended from time to time) of the Company or any
such Subsidiary and (ii) the rights (charter and statutory), licenses and
franchises of the Company and its Subsidiaries; PROVIDED, HOWEVER, that the
Company shall not be required to preserve any such right, license or franchise,
or the corporate, partnership or other existence of any of its Subsidiaries, if
the Board of Directors shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and its
Subsidiaries, taken as a whole, and that the loss thereof is not adverse in any
material respect to the Holders of the Notes.
Section 4.15. OFFER TO REPURCHASE UPON CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, the Company
shall make an offer (a "CHANGE OF CONTROL OFFER") to each Holder to repurchase
all or any part (equal to $1,000 or an integral multiple thereof) of each
Holder's Notes at a purchase price equal to 101% of the aggregate principal
amount thereof plus accrued and unpaid interest and Liquidated Damages, if any,
thereon, to the date of purchase (the "CHANGE OF CONTROL PAYMENT"). Within 30
days following any Change of Control, the Company shall mail a notice to each
Holder describing the transaction or transactions that constitute the Change of
Control and stating: (i) that the Change of Control Offer is being made pursuant
to this Section 4.15 and that all Notes tendered will be accepted for payment;
(ii) the purchase price and the purchase date, which shall be no earlier than 30
days and no later than 60 days from the date such notice is mailed (the "CHANGE
OF CONTROL PAYMENT DATE"); (iii) that any Note not tendered will continue to
accrue interest; (iv) that, unless the Company defaults in the payment of the
Change of Control Payment, all Notes accepted for payment pursuant to the Change
of Control Offer shall cease to accrue interest after the Change of Control
Payment Date; (v) that Holders electing to have any Notes purchased pursuant to
a Change of Control Offer will be required to surrender the Notes, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Notes
completed, to the Paying Agent at the address specified in the notice prior to
the close of business on the third Business Day preceding the Change of Control
Payment Date; (vi) that
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Holders will be entitled to withdraw their election if the Paying Agent
receives, not later than the close of business on the second Business Day
preceding the Change of Control Payment Date, a facsimile transmission or letter
setting forth the name of the Holder, the principal amount of Notes delivered
for purchase, and a statement that such Holder is withdrawing his election to
have the Notes purchased; and (vii) that Holders whose Notes are being purchased
only in part will be issued new Notes equal in principal amount to the
unpurchased portion of the Notes surrendered, which unpurchased portion must be
equal to $1,000 in principal amount or an integral multiple thereof. The Company
shall 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 Notes as a
result of a Change of Control. To the extent that the provisions of any
securities laws or regulations conflict with this Section 4.15, the Company
shall comply with the applicable securities laws and regulations and shall not
be deemed to have breached its obligations under this Section 4.15 by virtue of
such conflict.
(b) On the Change of Control Payment Date, the Company shall,
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 Agent 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 Trustee 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 Agent shall promptly mail to each Holder of Notes
so tendered payment in an amount equal to the purchase price for the Notes, and
the Trustee shall 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 by such Holder, if any; PROVIDED
that each such new Note shall be in a principal amount of $1,000 or an integral
multiple thereof.
Section 4.16. LIMITATION ON SALE AND LEASEBACK TRANSACTIONS
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, enter into any sale and leaseback transaction;
PROVIDED that the Company or any Restricted Subsidiary may enter into a sale and
leaseback transaction if:
(1) the Company or that Restricted Subsidiary, as applicable,
could have incurred Indebtedness in an amount equal to the Attributable
Debt relating to such sale
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and leaseback transaction under the Fixed Charge Coverage Ratio test in
the first paragraph of Section 4.09 hereof;
(2) the gross cash proceeds of that sale and leaseback
transaction are at least equal to the fair market value, as determined
in good faith by the Board of Directors and set forth in an Officers'
Certificate delivered to the Trustee, of the property that is the
subject of that sale and leaseback transaction; and
(3) the transfer of assets in that sale and leaseback
transaction is permitted by, and the Company applies the proceeds of
such transaction in compliance with Section 4.10 hereof.
Section 4.17. LIMITATION ON SALE OR ISSUANCE OF CAPITAL STOCK OF RESTRICTED
SUBSIDIARIES.
The Company shall not sell any shares of Capital Stock of a
Restricted Subsidiary, and shall not permit any Restricted Subsidiary, directly
or indirectly, to issue or sell any shares of its Capital Stock except: (i) to
the Company or a Wholly Owned Restricted Subsidiary or (ii) (A) in compliance
with Section 4.10 hereof if, immediately after giving effect to such issuance or
sale, such Restricted Subsidiary would continue to be a Restricted Subsidiary or
(B) if, immediately after giving effect to such issuance or sale, such
Restricted Subsidiary would no longer be a Restricted Subsidiary and the
Investment of the Company in such Person after giving effect to such issuance or
sale would have been permitted to be made under Section 4.07 hereof as if made
on the date of such issuance or sale. Notwithstanding the foregoing, (i) the
Company may sell all, but not less than all, of the Capital Stock of a
Subsidiary as long as the Company is in compliance with the terms of Section
4.10 hereof and (ii) the Company and its Restricted Subsidiaries may issue
directors' qualifying shares or shares issued to be held by foreign nationals
(in each case to the extent mandated by applicable law).
The Company will not sell any shares of preferred stock of any
Restricted Subsidiary and will not permit any Restricted Subsidiary, directly or
indirectly, to issue or sell any shares of its preferred stock to any Person
(other than to the Company or a Wholly Owned Restricted Subsidiary).
Section 4.18. LIMITATIONS ON ISSUANCES OF GUARANTEES BY RESTRICTED
SUBSIDIARIES.
The Company will not permit any of its Restricted
Subsidiaries, directly or indirectly, to Guarantee or pledge any assets to
secure the payment of any other Indebtedness of the Company unless such
Restricted Subsidiary simultaneously executes and delivers a supplemental
indenture providing for the Guarantee of the payment of the Notes by such
Restricted Subsidiary, which Guarantee shall be senior to or PARI PASSU with
such Subsidiary's Guarantee of or pledge to secure such other Indebtedness
unless such other Indebtedness is Senior Debt, in which case the Guarantee of
the Notes may be subordinated to the Guarantee of such Senior Debt to the same
extent as the Notes are subordinated to such Senior Debt.
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Notwithstanding the preceding paragraph, any Note Guarantee of
the Notes will provide by its terms that it will be automatically and
unconditionally released and discharged under the circumstances described under
Section 10.07 hereof.
Section 4.19. DESIGNATION OF RESTRICTED AND UNRESTRICTED SUBSIDIARIES.
The Board of Directors may designate any Restricted Subsidiary
to be an Unrestricted Subsidiary if that designation would not cause a Default.
If a Restricted Subsidiary is designated as an Unrestricted Subsidiary, the
aggregate fair market value of all outstanding Investments owned by the Company
and its Restricted Subsidiaries in the Subsidiary so designated will be deemed
to be a Restricted Investment made as of the time of such designation and that
designation will only be permitted if such Investment would be permitted at that
time and if such Restricted Subsidiary otherwise meets the definition of an
Unrestricted Subsidiary. 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 (1) such
Indebtedness is permitted under the covenant described under Section 4.09 hereof
calculated on a pro forma basis as if such designation had occurred at the
beginning of the four-quarter reference period; and (2) no Default or Event of
Default would be in existence following such designation.
Section 4.20. PAYMENTS FOR CONSENT.
The Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration to or for the benefit of any Holder of Notes for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of the Indenture or the Notes, UNLESS such consideration is offered to be paid
and is paid to all Holders of the Notes that consent, waive or agree to amend in
the time frame set forth in the solicitation documents relating to such consent,
waiver or agreement.
Section 4.21. NO SENIOR SUBORDINATED DEBT.
The Company will not 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 of the Company and senior in any respect in
right of payment to the Notes. No Guarantor will incur, create, issue, assume,
guarantee or otherwise become liable for any Indebtedness that is subordinate or
junior in right of payment to the Senior Debt of such Guarantor and senior in
any respect in right of payment to such Guarantor's Note Guarantee.
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Section 4.22. ADDITIONAL NOTE GUARANTEES.
If the Company or any of its Restricted Subsidiaries acquires
or creates another Domestic Subsidiary after the date of the Indenture, then
that newly acquired or created Domestic Subsidiary must become a Guarantor and
execute a supplemental indenture and deliver an Opinion of Counsel to the
Trustee.
ARTICLE FIVE
SUCCESSORS
Section 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS.
Neither the Company nor any Restricted Subsidiary may,
directly or indirectly: (1) consolidate or merge with or into another Person
(whether or not the Company or such Restricted Subsidiary is the surviving
corporation); or (2) sell, assign, transfer, convey, lease or otherwise dispose
of all or substantially all of the properties or assets of the Company and its
Subsidiaries taken as a whole, in one or more related transactions, to another
Person; unless:
(a) either: (i) the Company or such Restricted Subsidiary, as
the case may be, is the surviving corporation; or (ii) the Person
formed by or surviving any such consolidation or merger (if other than
the Company or such Restricted Subsidiary) or to which such sale,
assignment, transfer, conveyance, lease 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;
(2) the Person formed by or surviving any such consolidation
or merger (if other than the Company or such Restricted Subsidiary) or
the Person to which such sale, assignment, transfer, conveyance, lease
or other disposition shall have been made assumes all the obligations
of the Company or such Restricted Subsidiary (if such Restricted
Subsidiary is a Guarantor), as the case may be, under the Notes, the
Indenture and the Registration Rights Agreement pursuant to agreements
reasonably satisfactory to the Trustee;
(3) immediately after such transaction no Default or Event of
Default exists; and
(4) if such transaction involves the Company, the Company or
the Person formed by or surviving any such consolidation or merger (if
other than the Company), or to which such sale, assignment, transfer,
conveyance, lease or other disposition shall have been made will, on
the date of such transaction after giving pro forma effect thereto and
any related financing transactions as if the same 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 Section 4.09
hereof.
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This Section 5.01 will not apply to a sale, assignment,
transfer, conveyance, lease or other disposition of assets between or among the
Company and any of its Restricted Subsidiaries.
Section 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment,
transfer, conveyance, lease or other disposition of all or substantially all of
the properties and assets of the Company or any Restricted Subsidiary in
accordance with Section 5.01, the successor Person formed by such consolidation
or into which the Company or such Restricted Subsidiary, as the case may be, is
merged or the successor Person to which such sale, assignment, transfer,
conveyance, lease or disposition is made shall succeed to, and may exercise
every right and power of, the Company or such Restricted Subsidiary, as the case
may be, under the Indenture and/or the Guarantees, as the case may be, with the
same effect as if such successor had been named as the Company or such
Restricted Subsidiary, as the case may be, therein and/or in the Guarantees, as
the case may be. When a successor assumes all the obligations of its predecessor
under the Indenture, the Notes or a Guarantee, as the case may be, the
predecessor shall be released from those obligations; PROVIDED that in the case
of a transfer by lease, the predecessor shall not be released from its
obligations under this Indenture.
ARTICLE SIX
DEFAULTS AND REMEDIES
Section 6.01. EVENTS OF DEFAULT.
An "Event of Default" occurs if:
(a) the Company defaults for 30 days in the payment when due
of interest on, or Liquidated Damages with respect to, the Notes, whether or not
prohibited by Article Eleven hereof;
(b) the Company defaults in the payment when due of principal
of or premium, if any, on the Notes, whether or not prohibited by Article Eleven
hereof;
(c) the Company fails to comply or any of the Company's
Subsidiaries fail to comply with any of the provisions of Section 4.07, 4.09,
4.10, 4.15 or 5.01 hereof;
(d) the Company fails or any of the Company's Restricted
Subsidiaries fails to observe or perform any other covenant, representation,
warranty or other agreement in this Indenture or the Notes for 60 days after
notice to the Company by the Trustee or the Holders of at least 25% in aggregate
principal amount of the Notes then outstanding voting as a single class;
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(e) a default occurs 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 this Indenture, if that default (a) is
caused by a failure to pay principal of or premium, if any, or interest on such
Indebtedness prior to the expiration of the grace period provided in such
Indebtedness on the date of such default (a "PAYMENT DEFAULT") or (b) 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 under which there has been a
Payment Default or the maturity of which has been so accelerated, aggregates
$20.0 million or more;
(f) a final judgment or final judgments for the payment of
money are entered by a court or courts of competent jurisdiction against the
Company or any of its Restricted Subsidiaries and such judgment or judgments
remain undischarged for a period (during which execution shall not be
effectively stayed) of 60 days, PROVIDED that the aggregate of all such
undischarged judgments exceeds $20.0 million;
(g) except as permitted by this Indenture, any Note Guarantee
shall be held in any judicial proceeding to be unenforceable or invalid or shall
case for any reason to be in full force and effect or any Guarantor, or any
Person acting on behalf of any Guarantor, shall deny or disaffirm its
obligations under its Note Guarantee; and
(h) the Company or any Restricted Subsidiary that constitutes
a Significant Subsidiary pursuant to or within the meaning of Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief
against it in an involuntary case,
(iii) consents to the appointment of a custodian
of it or for all or substantially all of its
property,
(iv) makes a general assignment for the benefit
of its creditors, or
(v) generally is not paying its debts as they
become due; or
(i) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(i) is for relief against the Company or any of
its Restricted Subsidiaries that constitutes
a Significant Subsidiary or any group
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of Restricted Subsidiaries that, taken as a
whole, would constitute a Significant
Subsidiary in an involuntary case;
(ii) appoints a custodian of the Company or any
of its Restricted Subsidiaries that
constitutes a Significant Subsidiary or any
group of Restricted Subsidiaries that, taken
as a whole, would constitute a Significant
Subsidiary or for all or substantially all
of the property of the Company or any of its
Restricted Subsidiaries that constitutes a
Significant Subsidiary or any group of
Restricted Subsidiaries that, taken as a
whole, would constitute a Significant
Subsidiary; or
(iii) orders the liquidation of the Company or any
of its Restricted Subsidiaries that
constitutes a Significant Subsidiary or any
group of Restricted Subsidiaries that, taken
as a whole, would constitute a Significant
Subsidiary.
and the order or decree remains unstayed and in effect for 60 consecutive days.
Section 6.02. ACCELERATION.
If any Event of Default (other than an Event of Default
specified in clause (h) or (i) of Section 6.01 hereof with respect to the
Company, any Restricted Subsidiary that constitutes a Significant Subsidiary or
any group of Restricted Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary) occurs and is continuing, the Trustee or the Holders of
at least 25% in principal amount of the then outstanding Notes may declare all
the Notes to be due and payable immediately. Upon any such declaration, the
Notes shall become due and payable immediately, PROVIDED that so long as any
Designated Senior Debt shall be outstanding, if any such other Event of Default
shall have occurred and be continuing, any such acceleration shall not be
effective until the earlier to occur of (x) five business days following
delivery by the Trustee or the Company of a written notice of such acceleration
of the Notes to each representative under Designated Senior Debt and (y) the
acceleration of any Indebtedness under any Designated Senior Debt.
Notwithstanding the foregoing, if an Event of Default specified in clause (g) or
(h) of Section 6.01 hereof occurs with respect to the Company, any of its
Restricted Subsidiaries that constitutes a Significant Subsidiary or any group
of Restricted Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary, all outstanding Notes shall be due and payable
immediately without further action or notice. The Holders of a majority in
aggregate principal amount of the then outstanding Notes by written notice to
the Trustee may on behalf of all of the Holders rescind an acceleration and its
consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default (except nonpayment of principal, interest,
premium or Liquidated Damages that has become due solely because of the
acceleration) have been cured or waived.
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If any Event of Default occurs on or after April 15, 2004 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 Section 3.07 hereof, then, upon acceleration of the Notes, an
equivalent premium shall also become and be immediately due and payable, to the
extent permitted by law, anything in this Indenture or in the Notes to the
contrary notwithstanding. If an Event of Default occurs prior to April 15, 2004
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 such date, then, upon acceleration of the
Notes, an additional premium shall also become and be immediately due and
payable in an amount, for each of the years beginning on April 15 of the years
set forth below, as set forth below (expressed as a percentage of the principal
amount of the Notes on the date of payment that would otherwise be due but for
the provisions of this sentence):
YEAR PERCENTAGE
---- ----------
1999 109.8750%
2000 108.8875%
2001 107.9000%
2002 106.9125%
2003 105.9250%
Section 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee
may pursue any available remedy to collect the payment of principal, premium, if
any, interest, and Liquidated Damages, if any, with respect to, the Notes or to
enforce the performance of any provision of the Notes or this Indenture;
PROVIDED, HOWEVER, that if an Event of Default shall occur and be continuing
solely by reason of the failure by the Company or any of its Subsidiaries to
comply with the provisions of Section 4.10 hereof, and such failure results
solely from the exercise by a holder of Designated Senior Debt of rights and
remedies in accordance with the terms of such Designated Senior Debt, then the
Trustee may only pursue remedies in accordance with Sections 6.02 and 6.08
hereof and will not be entitled to any injunction or other equitable relief.
The Trustee may maintain a proceeding even if it does not
possess any of the Notes or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Holder of a Note in exercising any right
or remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. All remedies
are cumulative to the extent permitted by law.
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Section 6.04. WAIVER OF PAST DEFAULTS.
Holders of not less than a majority in aggregate principal
amount of the then outstanding Notes by notice to the Trustee may on behalf of
the Holders of all of the Notes waive an existing Default or Event of Default
and its consequences hereunder, except a continuing Default or Event of Default
in the payment of the principal of, premium, if any, interest on, or Liquidated
Damages, if any, with respect to, the Notes (including in connection with an
offer to purchase) (PROVIDED, HOWEVER, that the Holders of a majority in
aggregate principal amount of the then outstanding Notes may rescind an
acceleration and its consequences, including any related payment default that
resulted from such acceleration). Upon any such waiver, such Default shall cease
to exist, and any Event of Default arising therefrom shall be deemed to have
been cured for every purpose of this Indenture; but no such waiver shall extend
to any subsequent or other Default or impair any right consequent thereon.
Section 6.05. CONTROL BY MAJORITY.
Holders of a majority in principal amount of the then
outstanding Notes may direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee or exercising any
trust or power conferred on it. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture that the Trustee determines
may be unduly prejudicial to the rights of other Holders of Notes or that may
involve the Trustee in personal liability.
Section 6.06. LIMITATION ON SUITS.
A Holder of a Note may pursue a remedy with respect to this
Indenture or the Notes only if:
(a) the Holder of a Note gives to the Trustee written notice
of a continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the
then outstanding Notes make a written request to the Trustee to pursue the
remedy;
(c) such Holder of a Note or Holders of Notes offer and, if
requested, provide to the Trustee indemnity satisfactory to the Trustee against
any loss, liability or expense;
(d) the Trustee does not comply with the request within 60
days after receipt of the request and the offer and, if requested, the provision
of indemnity; and
(e) during such 60-day period the Holders of a majority in
principal amount of the then outstanding Notes do not give the Trustee a
direction inconsistent with the request.
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A Holder of a Note may not use this Indenture to prejudice the
rights of another Holder of a Note or to obtain a preference or priority over
another Holder of a Note.
Section 6.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the
right of any Holder of a Note to receive payment of principal, premium, if any,
interest on, and Liquidated Damages, if any, with respect to, the Note, on or
after the respective due dates expressed in the Note (including in connection
with an offer to purchase), or to bring suit for the enforcement of any such
payment on or after such respective dates, shall not be impaired or affected
without the consent of such Holder.
Section 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(a) or (b)
occurs and is continuing, the Trustee is authorized to recover judgment in its
own name and as trustee of an express trust against the Company for the whole
amount of principal of, premium, if any, interest, and Liquidated Damages, if
any, remaining unpaid on the Notes and interest on overdue principal and
premium, if any, and, to the extent lawful, interest and Liquidated Damages, if
any, and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
Section 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and
other papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel) and
the Holders of the Notes allowed in any judicial proceedings relative to the
Company or any Guarantor (or any other obligor upon the Notes), its creditors or
its property and shall be entitled and empowered to collect, receive and
distribute any money or other property payable or deliverable on any such claims
and any custodian in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee, and in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay to
the Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.07 hereof. To the extent that the
payment of any such compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof out of the estate in any such proceeding, shall be denied
for any reason, payment of the same shall be secured by a Lien on, and shall be
paid out of, any and all distributions, dividends, money, securities and other
properties that the Holders may be entitled to receive in such proceeding
whether in liquidation or under any plan of
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reorganization or arrangement or otherwise. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
Section 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article, it
shall pay out the money in the following order:
FIRST: to the Trustee, its agents and attorneys for amounts
due under Section 7.07 hereof, including payment of all compensation,
expense and liabilities incurred, and all advances made, by the Trustee
and the costs and expenses of collection;
SECOND: to Holders of Notes for amounts due and unpaid on the
Notes for principal, premium, if any, interest and Liquidated Damages,
if any, ratably, without preference or priority of any kind, according
to the amounts due and payable on the Notes for principal, premium, if
any, interest, and Liquidated Damages, if any, respectively; and
THIRD: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any
payment to Holders of Notes pursuant to this Section 6.10.
Section 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any action taken or
omitted by it as a Trustee, a court in its discretion may require the filing by
any party litigant in the suit of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees and expenses, against any party litigant in the suit,
having due regard to the merits and good faith of the claims or defenses made by
the party litigant. This Section does not apply to a suit by the Trustee, a suit
by a Holder of a Note pursuant to Section 6.07 hereof, or a suit by Holders of
more than 10% in principal amount of the then outstanding Notes.
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ARTICLE SEVEN
TRUSTEE
Section 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by
the express provisions of this Indenture and the Trustee need perform
only those duties that are specifically set forth in this Indenture and
no others, and no implied covenants or obligations shall be read into
this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture. However, in the case of any such certificates or
opinions which by any provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall examine the certificates
and opinions to determine whether or not they conform to the
requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its
own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b)
of this Section;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every
provision of this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b), and (c) of this Section.
(e) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or incur any liability. The Trustee shall be
under no obligation to exercise any of its rights and powers under this
Indenture at the request of any Holders, unless such Holder shall have offered
to the Trustee security and indemnity satisfactory to it against any loss,
liability or expense.
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(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
Section 7.02. RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely upon any document
believed by it to be genuine and to have been signed or presented by the proper
Person. The Trustee need not investigate any fact or matter stated in the
document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel or both. The Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on such Officers' Certificate or Opinion of Counsel. The Trustee may
consult with counsel of its selection and the advice of such counsel or any
Opinion of Counsel shall be full and complete authorization and protection from
liability in respect of any action taken, suffered or omitted by it hereunder in
good faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and
shall not be responsible for the misconduct or negligence of any agent appointed
with due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith that it believes to be authorized or within the
rights or powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture,
any demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(f) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders unless such Holders shall have offered to the
Trustee security or indemnity satisfactory to it against the costs, expenses and
liabilities that might be incurred by it in compliance with such request or
direction.
(g) The Trustee shall not be deemed to have notice of any
Default or Event of Default unless a Responsible Officer of the Trustee has
actual knowledge thereof or unless written notice of any event which is in fact
such a Default is received by the Trustee at the Corporate Trust Office of the
Trustee, and such notice references the Notes and this Indenture.
(h) The rights, privileges, protections, immunities and
benefits given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in each
of its capacities hereunder, and to each agent, custodian and other Person
employed to act hereunder.
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Section 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Notes and may become a creditor of, or otherwise deal
with, the Company, any Guarantor or any Affiliate of the Company with the same
rights it would have if it were not Trustee. However, in the event that the
Trustee acquires any conflicting interest it must eliminate such conflict within
90 days, apply to the SEC for permission to continue as trustee or resign. Any
Agent may do the same with like rights and duties. The Trustee is also subject
to Sections 7.10 and 7.11 hereof.
Section 7.04. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture or the Notes, it
shall not be accountable for the Company's use of the proceeds from the Notes or
any money paid to the Company or upon the Company's direction under any
provision of this Indenture, it shall not be responsible for the use or
application of any money received by any Paying Agent other than the Trustee,
and it shall not be responsible for any statement or recital herein or any
statement in the Notes or any other document in connection with the sale of the
Notes or pursuant to this Indenture other than its certificate of
authentication.
Section 7.05. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and
if it is actually known to a Responsible Officer of the Trustee, the Trustee
shall mail to Holders of Notes a notice of the Default or Event of Default
within 90 days after it occurs. Except in the case of a Default or Event of
Default in payment of principal of, premium or Liquidated Damages, if any, or
interest on any Note, the Trustee may withhold the notice if and so long as a
committee of its Responsible Officers in good faith determines that withholding
the notice is in the interests of the Holders of the Notes.
Section 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.
Within 60 days after each March 15 beginning with the March 15
following the date of this Indenture, and for so long as Notes remain
outstanding, the Trustee shall mail to the Holders of the Notes a brief report
dated as of such reporting date that complies with TIA Section 313(a) (but if no
event described in TIA Section 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted). The Trustee also
shall comply with TIA Section 313(b)(2). The Trustee shall also transmit by mail
all reports as required by TIA Section 313(c).
A copy of each report at the time of its mailing to the
Holders of Notes shall be mailed to the Company and filed with the SEC and each
stock exchange on which the Notes are
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listed in accordance with TIA Section 313(d). The Company shall promptly notify
the Trustee when the Notes are listed on any stock exchange or any delisting
thereof.
Section 7.07. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time-to-time such
compensation as the Company and the Trustee shall from time-to-time agree in
writing for its services rendered by it hereunder. The Trustee's compensation
shall not be limited by any law on compensation of a trustee of an express
trust. The Company shall reimburse the Trustee promptly upon request for all
reasonable disbursements, advances and out-of-pocket expenses incurred or made
by it in addition to the compensation for its services. Such out-of-pocket
expenses shall include the reasonable compensation, disbursements and expenses
of the Trustee's agents and counsel.
The Company shall indemnify the Trustee or any predecessor
Trustee and their agents for, and to hold them harmless against, any and all
losses, damages, claims, liabilities or expenses including taxes (other than
taxes based upon, measured by or determined by the income of the Trustee)
incurred by it arising out of or in connection with the acceptance or
administration of its duties under this Indenture, including the costs and
expenses of enforcing this Indenture against the Company (including this Section
7.07) and defending itself against any claim (whether asserted by the Company or
any Holder or any other person) or liability in connection with the exercise or
performance of any of its powers or duties hereunder, except to the extent any
such loss, damage, claim, liability or expense may be attributable to its
negligence, bad faith or willful misconduct. The Trustee shall notify the
Company promptly of any claim for which it may seek indemnity. Failure by the
Trustee to so notify the Company shall not relieve the Company of its
obligations hereunder. The Company shall defend the claim and the Trustee shall
cooperate in the defense. The Trustee may have separate counsel and the Company
shall pay the fees and out-of-pocket expenses of such counsel. The Company need
not pay for any settlement made without its consent, which consent shall not be
unreasonably withheld.
The obligations of the Company under this Section 7.07 shall
survive the satisfaction and discharge of this Indenture.
To secure the Company's payment obligations in this Section,
the Trustee shall have a Lien prior to the Notes on all money or property held
or collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes. Such Lien shall survive the satisfaction and
discharge of this Indenture.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(h) or (i) hereof occurs, the expenses
and the compensation for the services (including the fees and expenses of its
agents and counsel) are intended to constitute expenses of administration under
any Bankruptcy Law.
The Trustee shall comply with the provisions of TIA
Section 313(b)(2) to the extent applicable.
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Section 7.08. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section.
The Trustee may resign in writing at any time and be
discharged from the trust hereby created by so notifying the Company. The
Holders of a majority in principal amount of the then outstanding Notes may
remove the Trustee by so notifying the Trustee and the Company in writing. The
Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any Bankruptcy
Law;
(c) a custodian or public officer takes charge of the Trustee
or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office, the
Holders of a majority in principal amount of the then outstanding Notes may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company.
If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company, or the Holders of at least 10% in principal amount of the then
outstanding Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee at the expense of the Company.
If the Trustee, after written request by any Holder who has
been a Holder for at least six months, fails to comply with Section 7.10, such
Holder may petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee, PROVIDED all sums owing to the
Trustee hereunder have been paid and subject to the Lien provided for in Section
7.07 hereof. Notwithstanding replacement of
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the Trustee pursuant to this Section 7.08, the Company's obligations under
Section 7.07 hereof shall continue for the benefit of the retiring Trustee.
Section 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee.
Section 7.10. ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder that is a
corporation organized and doing business under the laws of the United States of
America or of any state thereof that is authorized under such laws to exercise
corporate trustee power, that is subject to supervision or examination by
federal or state authorities and that has a combined capital and surplus of at
least $50.0 million as set forth in its most recent published annual report of
condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to
TIA Section 310(b).
Section 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee is subject to TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated
therein.
ARTICLE EIGHT
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The Company may, at the option of its Board of Directors
evidenced by a resolution set forth in an Officers' Certificate, at any time,
elect to have either Section 8.02 or 8.03 hereof be applied to all outstanding
Notes upon compliance with the conditions set forth below in this Article Eight.
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Section 8.02. LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.01 hereof of the
option applicable to this Section 8.02, the Company and the Guarantors shall,
subject to the satisfaction of the conditions set forth in Section 8.04 hereof,
be deemed to have been discharged from its obligations with respect to all
outstanding Notes and the Note Guarantees on the date the conditions set forth
below are satisfied (hereinafter, "LEGAL DEFEASANCE"). For this purpose, Legal
Defeasance means that the Company shall be deemed to have paid and discharged
the entire Indebtedness represented by the outstanding Notes and the Note
Guarantees, which shall thereafter be deemed to be "outstanding" only for the
purposes of Section 8.05 hereof and the other Sections of this Indenture
referred to in (a) and (b) below, and to have satisfied all its other
obligations under such Notes and this Indenture (and the Trustee, on demand of
and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following provisions which shall survive
until otherwise terminated or discharged hereunder: (a) the rights of Holders of
outstanding Notes to receive solely from the trust fund described in Section
8.04 hereof, and as more fully set forth in such Section, payments in respect of
the principal of, premium and Liquidated Damages, if any, and interest on such
Notes when such payments are due, (b) the Company's obligations with respect to
such Notes under Article Two and Section 4.02 hereof, (c) the rights, powers,
trusts, duties and immunities of the Trustee hereunder and the Company's and the
Guarantors' obligations in connection therewith and (d) this Article Eight.
Subject to compliance with this Article Eight, the Company may exercise its
option under this Section 8.02 notwithstanding the prior exercise of its option
under Section 8.03 hereof.
Section 8.03. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.01 hereof of the
option applicable to this Section 8.03, the Company and the Guarantors shall,
subject to the satisfaction of the conditions set forth in Section 8.04 hereof,
be released from its obligations under the covenants contained in Sections 4.07
through 4.22 hereof and clause (iv) of Section 5.01 hereof with respect to the
outstanding Notes on and after the date the conditions set forth in Section 8.04
are satisfied (hereinafter, "COVENANT DEFEASANCE"), and the Notes shall
thereafter be deemed not "outstanding" for the purposes of any direction,
waiver, consent or declaration or act of Holders (and the consequences of any
thereof) in connection with such covenants, but shall continue to be deemed
"outstanding" for all other purposes hereunder (it being understood that such
Notes shall not be deemed outstanding for accounting purposes). For this
purpose, Covenant Defeasance means that, with respect to the outstanding Notes,
the Company and any Guarantor may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
covenant, whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or by reason of any reference in any such covenant
to any other provision herein or in any other document and such omission to
comply shall not constitute a Default or an Event of Default under Section 6.01
hereof, but, except as specified above, the remainder of this Indenture and such
Notes shall be unaffected thereby.
Section 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of
either Section 8.02 or 8.03 hereof to the outstanding Notes:
(a) the Company must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders, cash in United States dollars,
noncallable Government Securities, or a
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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 and Liquidated Damages, if any, and interest on the
outstanding Notes on the stated date for payment thereof or on the applicable
redemption date, as the case may be;
(b) in the case of an election under Section 8.02 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that (i) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling or (ii) since the date of this 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 Notes 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;
(c) in the case of an election under Section 8.03 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel reasonably
acceptable to the Trustee confirming that the Holders of the outstanding Notes
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;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or insofar as Sections 6.01(h) or 6.01(i)
hereof are concerned, at any time in the period ending on the 91st day after the
date of deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not
result in a breach or violation of, or constitute a default under, any
Designated Senior Debt or any material agreement or instrument to which the
Company or any of its Subsidiaries is a party or by which the Company or any of
its Subsidiaries is bound;
(f) the Company shall have delivered to the Trustee an Opinion
of Counsel to the effect that, assuming no intervening bankruptcy of the Company
or any Guarantor between the date of deposit and the 91st day following the
deposit and assuming that no Holder is an "insider" of the Company under
applicable bankruptcy law, 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;
(g) the Company shall have delivered to the Trustee an
Officers' Certificate stating that the deposit was not made by the Company with
the intent of preferring the Holders over any other creditors of the Company or
with the intent of defeating, hindering, delaying or defrauding creditors of the
Company or others; and
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(h) the Company shall have delivered to the 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.
Section 8.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.06 hereof, all money and non-callable
Government Securities (including the proceeds thereof) deposited with the
Trustee (or other qualifying trustee, collectively for purposes of this Section
8.05, the "TRUSTEE") pursuant to Section 8.04 hereof in respect of the
outstanding Notes shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including the Company acting as
Paying Agent) as the Trustee may determine, to the Holders of such Notes of all
sums due and to become due thereon in respect of principal, premium and
Liquidated Damages, if any, and interest, but such money need not be segregated
from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the cash or non-callable
Government Securities deposited pursuant to Section 8.04 hereof or the principal
and interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Anything in this Article Eight to the contrary
notwithstanding, the Trustee shall deliver or pay to the Company from time to
time upon the request of the Company any money or non-callable Government
Securities held by it as provided in Section 8.04 hereof which, in the opinion
of a nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 8.04(a) hereof), are in excess of the amount thereof
that would then be required to be deposited to effect an equivalent Legal
Defeasance or Covenant Defeasance.
Section 8.06. REPAYMENT TO COMPANY.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of, premium
or Liquidated Damages, if any, or interest on any Note and remaining unclaimed
for two years after such principal, and premium or Liquidated Damages, if any,
or interest has become due and payable shall be paid to the Company on its
request or damages (if then held by the Company) shall be discharged from such
trust; and the Holder of such Note shall thereafter look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; PROVIDED, HOWEVER, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in the New York Times and The
Wall Street Journal (national edition), notice that such money remains unclaimed
and that, after a date
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specified therein, which shall not be less than 30 days from the date of such
notification or publication, any unclaimed balance of such money then remaining
will be repaid to the Company.
Section 8.07. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United
States dollars or non-callable Government Securities in accordance with Section
8.02 or 8.03 hereof, as the case may be, by reason of any order or judgment of
any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, then the Company's obligations under this
Indenture and the Notes shall be revived and reinstated as though no deposit had
occurred pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee
or Paying Agent is permitted to apply all such money in accordance with Section
8.02 or 8.03 hereof, as the case may be; PROVIDED, HOWEVER, that, if the Company
makes any payment of principal of, premium or Liquidated Damages, if any, or
interest on any Note following the reinstatement of its obligations, the Company
shall be subrogated to the rights of the Holders of such Notes to receive such
payment from the money held by the Trustee or Paying Agent.
ARTICLE NINE
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. WITHOUT CONSENT OF HOLDERS OF NOTES.
Notwithstanding Section 9.02 of this Indenture, the Company,
the Guarantors and the Trustee may amend or supplement this Indenture or the
Notes without the consent of any Holder of a Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in
place of certificated Notes or to alter the provisions of Article Two hereof
(including the related definitions) in a manner that does not materially
adversely affect any Holder;
(c) to provide for the assumption of the Company's or any
Guarantor's obligations to the Holders of the Notes by a successor to the
Company pursuant to Article Five hereof;
(d) to make any change that would provide any additional
rights or benefits to the Holders of the Notes or that does not adversely affect
the legal rights hereunder of any Holder of the Note;
(e) to comply with requirements of the SEC in order to effect
or maintain the qualification of this Indenture under the TIA;
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(f) to allow any Subsidiary to guarantee the Notes; or
(g) to provide for collateral for the Notes or one or more
Note Guarantees.
Upon the request of the Company accompanied by a resolution of
its Board of Directors authorizing the execution of any such amended or
supplemental Indenture, and upon receipt by the Trustee of the documents
described in Section 7.02 hereof, the Trustee shall join with the Company and
the Guarantors in the execution of any amended or supplemental Indenture
authorized or permitted by the terms of this Indenture and to make any further
appropriate agreements and stipulations that may be therein contained, but the
Trustee shall not be obligated to enter into such amended or supplemental
Indenture that affects its own rights, duties or immunities under this Indenture
or otherwise.
Section 9.02. WITH CONSENT OF HOLDERS OF NOTES.
Except as provided below in this Section 9.02, the Company,
the Guarantors and the Trustee may amend or supplement this Indenture and the
Notes may be amended or supplemented with the consent of the Holders of at least
a majority in principal amount of the Notes then outstanding voting as a single
class (including consents obtained in connection with a tender offer or exchange
offer for, or purchase of, the Notes), and, subject to Sections 6.04 and 6.07
hereof, any existing Default or Event of Default (other than a Default or Event
of Default in the payment of the principal of, premium or Liquidated Damages, if
any, or interest on the Notes, except a payment default resulting from an
acceleration that has been rescinded) or compliance with any provision of this
Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes voting as a single
class (including consents obtained in connection with a tender offer or exchange
offer for, or purchase of, the Notes).
Upon the request of the Company accompanied by a resolution of
its Board of Directors authorizing the execution of any such amended or
supplemental Indenture, and upon the filing with the Trustee of evidence
satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid,
and upon receipt by the Trustee of the documents described in Section 7.02
hereof, the Trustee shall join with the Company and the Guarantors in the
execution of such amended or supplemental Indenture unless such amended or
supplemental Indenture directly affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise, in which case the Trustee may in
its discretion, but shall not be obligated to, enter into such amended or
supplemental Indenture.
It shall not be necessary for the consent of the Holders of
Notes under this Section 9.02 to approve the particular form of any proposed
amendment or waiver, but it shall be sufficient if such consent approves the
substance thereof.
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After an amendment, supplement or waiver under this Section
becomes effective, the Company shall mail to the Holders of Notes affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Company to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such amended or
supplemental Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the
Holders of a majority in aggregate principal amount of the Notes then
outstanding voting as a single class may waive compliance in a particular
instance by the Company with any provision of this Indenture or the Notes.
However, without the consent of each Holder affected, an amendment or waiver
under this Section 9.02 may not (with respect to any Notes held by a
non-consenting Holder):
(a) reduce the principal amount of Notes whose Holders must
consent to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of
any Note or alter or waive any of the provisions with respect to the redemption
of the Notes;
(c) reduce the rate of or change the time for payment of
interest, including default interest, on any Note;
(d) waive a Default or Event of Default in the payment of
principal of or premium or Liquidated Damages, if any, or interest on the Notes
(except a rescission of acceleration of the Notes by the Holders of at least a
majority in aggregate principal amount of the then outstanding Notes and a
waiver of the payment default that resulted from such acceleration);
(e) make any Note payable in money other than that stated in
the Notes;
(f) make any change in the provisions of this Indenture
relating to waivers of past Defaults or the rights of Holders of Notes to
receive payments of principal, of or interest or premium or Liquidated Damages,
if any, on the Notes;
(g) release any Guarantor from any of its obligations under
its Note Guarantee or this Indenture, except in accordance with the terms of
this Indenture; or
(h) make any change in Section 6.04 or 6.07 hereof or in the
foregoing amendment and waiver provisions.
In addition, any amendment to, or waiver of, the provisions of
the Indenture relating to subordination that adversely affects the rights of the
Holders of the Notes will require the consent of the Holders of at least 75% in
aggregate principal amount of Notes then outstanding.
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Section 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Notes
shall be set forth in a amended or supplemental Indenture that complies with the
TIA as then in effect.
Section 9.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder of a Note is a continuing consent by the Holder of a
Note and every subsequent Holder of a Note or portion of a Note that evidences
the same debt as the consenting Holder's Note, even if notation of the consent
is not made on any Note. However, any such Holder of a Note or subsequent Holder
of a Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
Section 9.05. NOTATION ON OR EXCHANGE OF NOTES.
The Trustee may place an appropriate notation about an
amendment, supplement or waiver on any Note thereafter authenticated. The
Company in exchange for all Notes may issue and the Trustee shall, upon receipt
of an Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.
Failure to make the appropriate notation or issue a new Note
shall not affect the validity and effect of such amendment, supplement or
waiver.
Section 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amended or supplemental Indenture
authorized pursuant to this Article Nine if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
The Company may not sign an amendment or supplemental Indenture until the Board
of Directors approves it. In executing any amended or supplemental indenture,
the Trustee shall be entitled to receive and (subject to Section 7.01 hereof)
shall be fully protected in relying upon, in addition to the documents required
by Section 12.04 hereof, an Officers' Certificate and an Opinion of Counsel
stating that the execution of such amended or supplemental indenture is
authorized or permitted by this Indenture.
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ARTICLE TEN
NOTE GUARANTEES
Section 10.01. NOTE GUARANTEES.
Each Guarantor hereby jointly and severally, fully,
unconditionally and irrevocably guarantees the Notes and obligations of the
Company hereunder and thereunder, and the obligations of each other Guarantor
hereunder and thereunder, and guarantees to each Holder of a Note authenticated
and delivered by the Trustee and to the Trustee on behalf of such Holder, that:
(a) the principal of (and premium and Liquidated Damages, if any) and interest
on the Notes will be paid in full when due, whether at Stated Maturity, by
acceleration, call for redemption or otherwise (including, without limitation,
the amount that would become due but for the operation of the automatic stay
under Section 362(a) of the Federal Bankruptcy Code), together with interest on
the overdue principal, if any, and interest on any overdue interest, to the
extent lawful, and all other obligations of the Company to the Holders or the
Trustee hereunder or thereunder will be paid in full or performed, all in
accordance with the terms hereof and thereof; and (b) in case of any extension
of time of payment or renewal of any Notes or of any such other obligations, the
same will be paid in full when due or performed in accordance with the terms of
the extension or renewal, whether at Stated Maturity, by acceleration or
otherwise. Each of the Note Guarantees shall be a guarantee of payment and not
of collection.
Each Guarantor hereby agrees that its obligations hereunder
shall be unconditional, irrespective of the validity, regularity or
enforceability of the Notes or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of the Notes with respect
to any provisions hereof or thereof, the recovery of any judgment against the
Company, any action to enforce the same or any other circumstance which might
otherwise constitute a legal or equitable discharge or defense of a Guarantor.
Each Guarantor hereby waives the benefits of diligence,
presentment, demand for payment, filing of claims with a court in the event of
insolvency or bankruptcy of the Company, any right to require a proceeding first
against the Company or any other Person, protest, notice and all demands
whatsoever and covenants that the Note Guarantee of such Guarantor will not be
discharged as to any Note except by complete performance of the obligations
contained in such Note and such Note Guarantee or as provided for in this
Indenture. Each of the Guarantors hereby agrees that, in the event of a default
in payment of principal (or premium or Liquidated Damages, if any) or interest
on such Note, whether at its Stated Maturity, by acceleration, call for
redemption, purchase or otherwise, legal proceedings may be instituted by the
Trustee on behalf of, or by, the Holder of such Note, subject to the terms and
conditions set forth in this Indenture, directly against each of the Guarantors
to enforce such Guarantor's Note Guarantee without first proceeding against the
Company or any other Guarantor. Each Guarantor agrees that if, after the
occurrence and during the continuance of an Event of Default, the Trustee or any
of the Holders are prevented by applicable law from exercising their respective
rights to accelerate the maturity of the Notes, to collect interest on the
Notes, or to enforce or exercise any other right or remedy with respect to the
Notes, such Guarantor will pay to the Trustee for the account of the Holders,
upon demand therefor, the amount that would otherwise have been due and payable
had such rights and remedies been permitted to be exercised by the Trustee or
any of the Holders.
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If any Holder or the Trustee is required by any court or
otherwise to return to the Company or any Guarantor, or any custodian, trustee,
liquidator or other similar official acting in relation to either the Company or
any Guarantor, any amount paid by any of them to the Trustee or such Holder, the
Note Guarantee of each of the Guarantors, to the extent theretofore discharged,
shall be reinstated in full force and effect. Each Guarantor further agrees
that, as between each Guarantor, on the one hand, and the Holders and the
Trustee, on the other hand, (x) the maturity of the obligations guaranteed
hereby may be accelerated as provided in Article Six hereof for the purposes of
the Note Guarantee of such Guarantor, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any acceleration of such obligations
as provided in Article Six hereof, such obligations (whether or not due and
payable) shall forthwith become due and payable by each Guarantor for the
purpose of the Note Guarantee of such Guarantor.
Section 10.02. EXECUTION AND DELIVERY OF NOTE GUARANTEE.
The delivery of any Note by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of the Note
Guarantee set forth in this Indenture on behalf of each of the Guarantors.
Section 10.03. SEVERABILITY.
In case any provision of any Note Guarantee shall be invalid,
illegal or unenforceable, the validity, legality, and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
Section 10.04. SENIORITY OF NOTE GUARANTEES.
The Obligations of each Guarantor under its Note Guarantee
pursuant to this Article Ten shall be junior and subordinated to any Senior Debt
of such Guarantor on the same basis as the Notes are junior and subordinated to
Senior Debt of the Company. For the purposes of the foregoing sentence, the
Trustee and the Holders shall have the right to receive and/or retain payments
by any of the Guarantors only at such times as they may receive and/or retain
payments in respect of the Notes pursuant to this Indenture, including Article
Eleven hereof.
Section 10.05. LIMITATION OF GUARANTOR'S LIABILITY.
Each Guarantor and by its acceptance hereof each Holder
confirms that it is the intention of all such parties that the Note Guarantee of
such Guarantor not constitute a fraudulent transfer or conveyance for purposes
of the Federal Bankruptcy Code, the Uniform Fraudulent Conveyance Act, the
Uniform Fraudulent Transfer Act or any similar federal or state law or the
provisions of its local law relating to fraudulent transfer or conveyance. To
effectuate the foregoing intention, the Trustee, the Holders and the Guarantors
hereby irrevocably agree that the obligations of such Guarantor under its Note
Guarantee shall be limited to the maximum amount that will not, after giving
effect to all other contingent and fixed liabilities of such Guarantor and after
giving effect to any collections from, rights to receive contribution from or
payments made by or on behalf of any other Guarantor in respect of the
obligations of such other Guarantor under its Note Guarantee, result in the
obligations of such Guarantor under its Note Guarantee constituting a fraudulent
transfer or conveyance.
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Section 10.06. GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS.
Except as otherwise provided in Section 10.07, a Guarantor may
not sell or otherwise dispose of all or substantially all of its assets, or
consolidate with or merge with or into (whether or not such Guarantor is the
surviving Person) another Person unless:
(a) immediately after giving effect to such transaction (other
than in the case of a sale described in clause (c) of the definition of "Asset
Sale"), no Default or Event of Default exists; and
(b) either:
(i) the Person acquiring the property in any such sale or
disposition or the Person formed by or surviving any such consolidation
or merger assumes all the obligations of that Guarantor under this
Indenture, its Note Guarantee and the Registration Rights Agreement
pursuant to a supplemental indenture satisfactory to the Trustee; or
(ii) such sale or other disposition complies with the "Asset
Sale" provisions of this Indenture, including the application of the
Net Proceeds therefrom.
In case of any such consolidation, merger, sale or conveyance
and upon the assumption by the successor Person, by supplemental indenture,
executed and delivered to the Trustee and satisfactory in form to the Trustee,
of the Note Guarantee and the due and punctual performance of all of the
covenants and conditions of this Indenture to be performed by the Guarantor,
such successor Person shall succeed to and be substituted for the Guarantor with
the same effect as if it had been named herein as a Guarantor. All the Note
Guarantees so issued shall in all respects have the same legal rank and benefit
under this Indenture as the Note
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Guarantees theretofore and thereafter issued in accordance with the terms of
this Indenture as though all of such Note Guarantees had been issued at the date
of the execution hereof.
Except as set forth in Articles Four and Five hereof, and
notwithstanding clauses (a) and (b) above, nothing contained in this Indenture
or in any of the Notes shall prevent any consolidation or merger of a Guarantor
with or into the Company or another Guarantor, or shall prevent any sale or
conveyance of the property of a Guarantor as an entirety or substantially as an
entirety to the Company or another Guarantor.
Section 10.07. RELEASES FOLLOWING SALE OF ASSETS.
Any Guarantor will be released and relieved of any obligations
under its Note Guarantee, (i) in connection with any sale or other disposition
of all or substantially all of the assets of that Guarantor (including by way of
merger or consolidation) to a Person that is not (either before or after giving
effect to such transaction) a Restricted Subsidiary of the Company, if the sale
or other disposition of all or substantially all of the assets of that Guarantor
complies with the provisions of this Indenture; (ii) in connection with any sale
of all of the Capital Stock of a Guarantor to a Person that is not (either
before or after giving effect to such transaction) a Restricted Subsidiary of
the Company, if the sale of all such Capital Stock of that Guarantor complies
with the provisions of this Indenture; (iii) if the Company designates any
Restricted Subsidiary that is a Guarantor as an Unrestricted Subsidiary in
accordance with the terms hereof; or (iv) upon dissolution or liquidation in
accordance with the provisions of this Indenture. Upon delivery by the Company
to the Trustee of an Officers' Certificate and an Opinion of Counsel to the
effect that such sale or other disposition was made by the Company in accordance
with the provisions of this Indenture, including without limitation Section 4.10
hereof, the Trustee shall execute any documents reasonably required in order to
evidence the release of any Guarantor from its obligations under its Note
Guarantee.
Any Guarantor not released from its obligations under its Note
Guarantee shall remain liable for the full amount of principal of and interest
on the Notes and for the other obligations of any Guarantor under this Indenture
as provided in this Article Ten.
Section 10.08. BENEFITS ACKNOWLEDGED.
Each Guarantor acknowledges that it will receive direct and
indirect benefits from the financing arrangements contemplated by this Indenture
and that its guarantee and waivers pursuant to its Guarantee are knowingly made
in contemplation of such benefits.
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ARTICLE ELEVEN
SUBORDINATION
Section 11.01. NOTES SUBORDINATE TO SENIOR DEBT.
The Company covenants and agrees, and each Holder, by its
acceptance thereof, likewise covenants and agrees, for the benefit of the
holders, from time to time, of Senior Debt that, to the extent and in the manner
hereinafter set forth in this Article, the Indebtedness represented by the Notes
and the payment of the principal of (and premium and Liquidated Damages, if any)
and interest on each and all of the Notes are hereby expressly made subordinate
and subject in right of payment as provided in this Article to the prior payment
in full in cash of all Senior Debt, whether outstanding on the date of this
Indenture or thereafter incurred; PROVIDED, HOWEVER, that the Notes, the
Indebtedness represented thereby and the payment of the principal of (and
premium and Liquidated Damages, if any) and interest on the Notes in all
respects shall rank equally with, or prior to, all existing and future unsecured
indebtedness (including, without limitation, Indebtedness) of the Company that
is subordinated to Senior Debt.
Section 11.02. PAYMENT OVER BY THE COMPANY OF PROCEEDS UPON DISSOLUTION, ETC.
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 marshaling of the
Company's assets and liabilities,
(1) the holders of Senior Debt of the Company shall be
entitled to receive payment in full in cash of all Obligations due in
respect of such Senior Debt (including interest after the commencement
of any such proceeding, whether or not allowed, at the rate specified
in the applicable Senior Debt) 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 in cash, any
distribution to which the Holders would be entitled shall be made to
the holders of Senior Debt (except that Holders may receive payments
made from the trust described in Section 8.04); and
(2) in the event that, notwithstanding the foregoing
provisions of this Section, the Trustee or any Holder shall have
received any payment in respect of the Notes (other than a payment from
the trust described in Section 8.04) when (i) the payment is prohibited
by this Article, and (ii) the Trustee or the Holder has actual
knowledge or otherwise receives notice that such payment is prohibited,
the Trustee or the Holder, as the case may be, shall hold the payment
in trust for the benefit of the holder of Senior Debt of the Company,
and upon the written request of the holders of Senior Debt of the
Company, the Trustee or the Holder, as the case may be, shall deliver
the amounts in trust to the holders of Senior Debt of the Company or
their proper representative.
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The consolidation of the Company with, or the merger of the
Company into, another Person or the liquidation or dissolution of the Company
following the conveyance, transfer or lease of its properties and assets
substantially as an entirety to another Person upon the terms and conditions set
forth in Article Five shall not be deemed a dissolution, winding up,
liquidation, reorganization, assignment for the benefit of creditors or
marshaling of assets and liabilities of the Company for the purposes of this
Section if the Person formed by such consolidation or into which the Company is
merged or the Person which acquires by conveyance, transfer or lease such
properties and assets substantially as an entirety, as the case may be, shall,
as a part of such consolidation, merger, conveyance, transfer or lease, comply
with the conditions set forth in Article Five.
Section 11.03. SUSPENSION OF PAYMENT ON NOTES WHEN SENIOR DEBT OF THE COMPANY
IN DEFAULT.
(a) Unless Section 11.02 shall be applicable, the Company
shall not make any payment upon or in respect of the Notes (except from the
trust described in Section 8.04) if
(i) a default in the payment (including any such
default following acceleration of maturity) of the principal
of, premium, if any, or interest on Designated Senior Debt
occurs and is continuing beyond any applicable period of grace
(a "PAYMENT EVENT OF DEFAULT") which is notified to the
Trustee in writing from the Company or by any representative
of holders of Designated Senior Debt, or
(ii) any other default occurs and is continuing (a
"NON-PAYMENT EVENT OF DEFAULT") on any Designated Senior Debt
which permits holders of that Designated Senior Debt to
accelerate its maturity and the Trustee receives a notice of
such default (a "PAYMENT BLOCKAGE NOTICE") from the Company or
the holders or the representative of the holders of any
Designated Senior Debt.
(b) Payments on the Notes may and shall be resumed: (i) in the
case of a Payment Event of Default, upon the date on which such default is cured
or waived; and (ii) in case of a Non-payment Event of Default, the earlier of
the date on which such Non-payment Event of Default is cured or waived or 179
days after the date on which the applicable Payment Blockage Notice is received,
unless the maturity of any Designated Senior Debt has been accelerated.
No new period of payment blockage may be commenced by a
Payment Blockage Notice unless and until 360 days have elapsed since the first
day of the effectiveness of the immediately prior Payment Blockage Notice. No
Non-payment Event of Default that existed or was continuing on the date of
delivery of any Payment Blockage Notice to the Trustee shall be, or be made, the
basis for a subsequent Payment Blockage Notice, unless such default has been
cured or waived for a period of not less than 90 consecutive days. For purposes
of clarification, acceleration on Designated Senior Debt based on any
Non-payment Event of Default shall not
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affect any suspension of payment upon or in respect of the Notes in accordance
with Section 11.03(a)(i) hereof due to any Payment Event of Default existing at
the time of or resulting from any nonpayment following such acceleration.
Section 11.04. PAYMENT OVER BY GUARANTORS OF PROCEEDS UPON DISSOLUTION, ETC.
Upon any distribution to creditors of any Guarantor in a
liquidation or dissolution of such Guarantor or in a bankruptcy, reorganization,
insolvency, receivership or similar proceeding relating to such Guarantor or its
property, an assignment for the benefit of creditors or any marshaling of such
Guarantor's assets and liabilities,
(1) the holders of Senior Debt of such Guarantor shall be
entitled to receive indefeasible payment in full in cash of all
Obligations due in respect of such Senior Debt (including interest
after the commencement of any such proceeding, whether nor not allowed,
at the rate specified in the applicable Senior Debt) before the Holders
will be entitled to receive any payment with respect to the respective
Note Guarantee, and until all Obligations with respect to Senior Debt
of such Guarantor and Senior Debt of the Company are paid in full in
cash, any distribution to which the Holders would be entitled shall be
made to the holders of such Senior Debt (except that Holders may
receive payments made from the trust described in Section 8.04); and
(2) in the event that, notwithstanding the foregoing
provisions of this Section, the Trustee or any Holder shall have
received any payment in respect of the Notes (other than a payment from
the trust described in Section 8.04) when (i) the payment is prohibited
by this Article, and (ii) the Trustee or the Holder has actual
knowledge or otherwise receives notice that such payment is prohibited,
the Trustee or the Holder, as the case may be, shall hold the payment
in trust for the benefit of the holder of Senior Debt of such
Guarantor, and upon the written request of the holders of Senior Debt
of such Guarantor, the Trustee or the Holder, as the case may be, shall
deliver the amounts in trust to the holders of Senior Debt of such
Guarantor or their proper representative.
The consolidation of any Guarantor with, or the merger of any
Guarantor into, another Person or the liquidation or dissolution of any
Guarantor following the conveyance, transfer or lease of its properties and
assets substantially as an entirety to another Person upon the terms and
conditions set forth in Article 5 shall not be deemed a dissolution, winding up,
liquidation, reorganization, assignment for the benefit of creditors or
marshaling of assets and liabilities of such Guarantor for the purposes of this
Section if the Person formed by such consolidation or into which such Guarantor
is merged or the Person which acquires by conveyance, transfer or lease such
properties and assets substantially as an entirety, as the case may be, shall,
as a part of such consolidation, merger, conveyance, transfer or lease, comply
with the conditions set forth in Article Five.
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Section 11.05. SUSPENSION OF PAYMENT ON NOTE GUARANTEES WHEN SENIOR
INDEBTEDNESS OF GUARANTOR IN DEFAULT.
(a) Unless Section 11.04 shall be applicable, a Guarantor
shall not make any payment upon or in respect of such Guarantor's Note Guarantee
if
(i) a Payment Event of Default on Designated Senior
Debt of such Guarantor or Designated Senior Debt of the
Company occurs and is continuing beyond any applicable period
of grace which is notified to the Trustee in writing from such
Guarantor or by any representative of holders of Designated
Senior Debt, or
(ii) any Non-payment Event of Default occurs and is
continuing with respect to Designated Senior Debt of such
Guarantor or Designated Senior Debt of the Company which
permits holders of the Designated Senior Debt of such
Guarantor or Designated Senior Debt of the Company as to
which such default relates to accelerate its maturity and
the Trustee receives a Payment Blockage Notice from the
Company or the holders or the representative of the holders
of such Designated Senior Debt.
(b) Payments on the Note Guarantees may and shall be resumed:
(i) in the case of a Payment Event of Default, upon the date on which such
default is cured or waived; and (ii) in case of a Non-payment Event of Default,
the earlier of the date on which such Non-payment Event of Default is cured or
waived or 179 days after the date on which the applicable Payment Blockage
Notice is received, unless the maturity of any Designated Senior Debt has been
accelerated.
No new period of payment blockage may be commenced by a
Payment Blockage Notice unless and until 360 days have elapsed since the first
day of the effectiveness of the immediately prior Payment Blockage Notice. No
Non-payment Event of Default that existed or was continuing on the date of
delivery of any Payment Blockage Notice to the Trustee shall be, or be made, the
basis for a subsequent Payment Blockage Notice, unless such default has been
cured or waived for a period of not less than 90 consecutive days. For purposes
of clarification, acceleration on Designated Senior Debt based on any
Non-payment Event of Default shall not affect any suspension of payment upon or
in respect of the Notes in accordance with Section 11.05(a)(i) hereof due to any
Payment Event of Default existing at the time of or resulting from any
nonpayment following such acceleration.
Section 11.06. PAYMENT PERMITTED IF NO DEFAULT.
Nothing contained in this Article or elsewhere in this
Indenture, in any of the Notes or in any Note Guarantee shall prevent the
Company or any Guarantors, as applicable, at any time except during the pendency
of any case, proceeding, dissolution, liquidation or other
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winding up, assignment for the benefit of creditors or other marshaling of
assets and liabilities of the Company or any Guarantor referred to in Section
11.02 or 11.04 under the conditions described in Section 11.03 or 11.05, from
making payments at any time of principal of (and premium and Liquidated Damages,
if any, on) or interest on the Notes or under a Note Guarantee, as applicable.
Section 11.07. SUBROGATION TO RIGHTS OF HOLDERS OF SENIOR DEBT.
Subject to the payment in full of all Senior Debt, the Holders
shall be subrogated (equally and ratably with the holders of all Indebtedness of
the Company or any Guarantor which by its express terms is subordinated to
Senior Debt of the Company or such Guarantor to the same extent as the Notes or
the Note Guarantees are subordinated and which is entitled to like rights of
subrogation) to the rights of the holders of such Senior Debt to receive
payments and distributions of cash, property and securities applicable to the
Senior Debt until the principal of (and premium and Liquidated Damages, if any)
and interest on the Notes shall be paid in full. For purposes of such
subrogation, no payments or distributions to the holders of Senior Debt of any
cash, property or securities to which the Holders or the Trustee would be
entitled except for the provisions of this Article, and no payments pursuant to
the provisions of this Article to the holders of Senior Debt by Holders or the
Trustee, shall, as among the Company, the Guarantors, their respective creditors
other than holders of Senior Debt, and the Holders of the Notes, be deemed to be
a payment or distribution by the Company or any Guarantor to or on account of
the Senior Debt.
Section 11.08. PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS.
The provisions of this Article are and are intended solely for
the purpose of defining the relative rights of the Holders of the Notes on the
one hand and the holders of Senior Debt on the other hand. Nothing contained in
this Article or elsewhere in this Indenture or in the Notes is intended to or
shall (a) impair, as between the Company, or any Guarantor as applicable, and
the Holders, the obligation of the Company or such Guarantor, which is absolute
and unconditional, to pay to the Holders the principal of (and premium and
Liquidated Damages, if any) and interest on the Notes as and when the same shall
become due and payable in accordance with their terms; or (b) affect the
relative rights against the Company or any Guarantor of the Holders and
creditors of the Company or such Guarantor other than the holders of Senior
Debt; or (c) prevent the Trustee or any Holder from exercising all remedies
otherwise permitted by applicable law upon default under this Indenture, subject
to the rights, if any, under this Article of the holders of Senior Debt.
Section 11.09. TRUSTEE TO EFFECTUATE SUBORDINATION.
Each Holder of a Note by his acceptance thereof authorizes and
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the
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subordination provided in this Article and appoints the Trustee his
attorney-in-fact for any and all such purposes.
Section 11.10. NO WAIVER OF SUBORDINATION PROVISIONS.
(a) No right of any present or future holder of any Senior
Debt to enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by (i) any act or failure to act on the part of the
Company or any Guarantor, (ii) by any act or failure to act, in good faith, by
any such holder, (iii) by any non-compliance by the Company or any Guarantor
with the terms, provisions and covenants of this Indenture, or (iv) the death,
disability, dissolution, reorganization, insolvency, bankruptcy, custodianship
or receivership of the Company, any Guarantor, any Holder of any Note, any
holder of any Senior Debt or any agent, administrator or trustee therefor, any
guarantor, surety or pledgor, or any other Person, regardless of any knowledge
thereof any such holder may have or be otherwise charged with.
(b) Without in any way limiting the generality of paragraph
(a) of this Section, the holders of Senior Debt may, at any time and from time
to time, without the consent of or notice to the Trustee or the Holders of the
Notes, without incurring responsibility to the Holders and without impairing or
releasing the subordination provided in this Article or the obligations
hereunder of the Holders to the holders of Senior Debt, do any one or more of
the following: (1) change the manner, place or terms of payment or extend the
time of payment of, or renew or alter, Senior Debt or any instrument evidencing
the same or any agreement under which Senior Debt is outstanding, whether such
Senior Debt and the Obligations thereunder are now or hereafter existing,
acquired or created, and irrespective of the fact that from time to time under
the Credit Facilities governing such Senior Debt monies may be advanced, repaid
and readvanced and that outstanding balances may be zero; (2) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or otherwise
securing Senior Debt or release or impair any Lien thereon; (3) release any
Person liable in any manner for the collection of Senior Debt; and (4) exercise
or refrain from exercising any rights against the Company, any Guarantor and any
other Person.
Section 11.11. NOTICE TO TRUSTEE.
(a) The Company shall give prompt written notice to the
Trustee of any fact known to the Company which would prohibit the making of any
payment to or by the Trustee in respect of the Notes. Notwithstanding the
provisions of this Article or any other provision of this Indenture, the Trustee
shall not be charged with knowledge of the existence of any facts which would
prohibit the making of any payment to or by the Trustee in respect of the Notes,
unless and until the Trustee shall have received written notice thereof from the
Company or the representative therefor at the address specified in Section 12.02
hereof; and, prior to the receipt of any such written notice, the Trustee,
subject to TIA Sections 315(a) through 315(d), shall be entitled in all respects
to assume that no such facts exist; PROVIDED, HOWEVER, that, if a
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Responsible Officer of the Trustee shall not have received the notice provided
for in this Section at least three Business Days prior to the date upon which by
the terms hereof any money may become payable for any purpose (including,
without limitation, the payment of the principal of (and premium and Liquidated
Damages, if any) or interest on any Note), then, anything herein contained to
the contrary notwithstanding, the Trustee shall have full power and authority to
receive such money and to apply the same to the purpose for which such money was
received and shall not be affected by any notice to the contrary which may be
received by it within three Business Days prior to such date.
(b) Subject to TIA Sections 315(a) through 315(d), the Trustee
shall be entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Debt (or a representative
therefor) to establish that such notice has been given by a holder of Senior
Debt (or a representative therefor). In the event that the Trustee determines in
good faith that further evidence is required with respect to the right of any
Person as a holder of Senior Debt to participate in any payment or distribution
pursuant to this Article, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Senior Debt held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and any other facts pertinent to the
rights of such Person under this Article and, if such evidence is not furnished,
the Trustee may defer any payment to such Person pending judicial determination
as to the right of such Person to receive such payment.
Section 11.12. RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING AGENT.
Upon any payment or distribution of assets of the Company
referred to in this Article, the Trustee, subject to TIA Sections 315(a) through
315(d), and the Holders shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which such insolvency,
bankruptcy, receivership, liquidation, reorganization, dissolution, winding up
or similar case or proceeding is pending, or a certificate of the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee for the benefit
of creditors, agent or other Person making such payment or distribution,
delivered to the Trustee or to the Holders, for the purpose of ascertaining the
Persons entitled to participate in such payment or distribution, the holders of
Senior Debt and other indebtedness of the Company, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article.
Section 11.13. RIGHTS OF TRUSTEE AS A HOLDER OF SENIOR DEBT; PRESERVATION OF
TRUSTEES RIGHTS.
The Trustee in its individual capacity shall be entitled to
all the rights set forth in this Article with respect to any Senior Debt which
may at any time be held by it, to the same extent as any other holder of Senior
Debt, and nothing in this Indenture shall deprive the Trustee of any of its
rights as such holder. Nothing in this Article shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 7.07 hereof.
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Section 11.14. ARTICLE APPLICABLE TO PAYING AGENTS.
In case at any time any Paying Agent other than the Trustee
shall have been appointed by the Company and be then acting hereunder, the term
"Trustee" as used in this Article shall in such case (unless the context
otherwise requires) be construed as extending to and including such Paying Agent
within its meaning as fully for all intents and purposes as if such Paying Agent
were named in this Article in addition to or in place of the Trustee; PROVIDED,
HOWEVER, that Section 11.13 shall not apply to the Company or any Affiliate of
the Company if it or such Affiliate acts as Paying Agent.
Section 11.15. NO SUSPENSION OF REMEDIES.
Nothing contained in this Article shall limit the right of the
Trustee or the Holders to take any action to accelerate the maturity of the
Notes pursuant to Article Six or to pursue any rights or remedies hereunder or
under applicable law, except as provided in Article Six.
Section 11.16. TRUST MONEYS NOT SUBORDINATED.
Notwithstanding anything contained herein to the contrary,
payments from cash or the proceeds of Government Securities held in trust under
Article Eight hereof by the Trustee (or other qualifying trustee) and which were
deposited in accordance with the terms of Article Eight hereof and not in
violation of Section 11.03 hereof for the payment of principal of (and premium
and Liquidated Damages, if any) and interest on the Notes shall not be
subordinated to the prior payment of any Senior Debt or subject to the
restrictions set forth in this Article, and none of the Holders shall be
obligated to pay over any such amount to the Company or any holder of Senior
Debt or any other creditor of the Company.
Section 11.17. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR DEBT.
The Trustee shall not be deemed to owe any fiduciary duty to
the holders of Senior Debt and shall not be liable to any such holders if it
shall in good faith mistakenly pay over or distribute to Holders or to the
Company or to any other Person cash, property or securities to which any holders
of Senior Debt shall be entitled by virtue of this Article or otherwise.
With respect to the holders of Senior Debt, the Trustee
undertakes to perform or to observe only such of its covenants or obligations as
are specifically set forth in this Article and no implied covenants or
obligations with respect to the holders of Senior Debt shall be read into this
Indenture against the Trustee.
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Section 11.18. NOTICE TO HOLDERS OF SENIOR DEBT.
The Company shall promptly notify holders of its Senior Debt
if payment of the Notes is accelerated in accordance with Article Six because of
an Event of Default.
Section 11.19. AMENDMENTS TO ARTICLE ELEVEN.
The provisions of this Article Eleven shall not be amended or
modified without the written consent of the holders of all Designated Senior
Debt.
ARTICLE TWELVE
MISCELLANEOUS
Section 12.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or
conflicts with the duties imposed by TIA Section 318(c), the imposed duties
shall control.
Section 12.02. NOTICES.
Any notice or communication by the Company or the Trustee to
the others is duly given if in writing and delivered in Person or mailed by
first class mail (registered or certified, return receipt requested), telecopier
(promptly confirmed in writing) or overnight air courier guaranteeing next day
delivery, to the others' address:
If to the Company or the Guarantors:
Florida Panthers Holdings, Inc.
450 East Las Olas Boulevard,
Suite 1400
Fort Lauderdale, Florida 33301
Attention: William M. Pierce
With a copy to:
Akerman, Senterfitt & Edison, P.A.
One Southeast Third Avenue
28th Floor
Miami, Florida 33131
Attention: Steven K. Roddenberry, Esq.
If to the Trustee:
The Bank of New York
101 Barclay Street, 21W
New York, New York 10286
Attention: Corporate Trust Trustee Administration
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The Company, the Guarantors or the Trustee, by notice to the
others may designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to
Holders) shall be deemed to have been duly given: at the time delivered by hand,
if personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when receipt acknowledged, if telecopied; and the
next Business Day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by
first class mail, certified or registered, return receipt requested, or by
overnight air courier guaranteeing next day delivery to its address shown on the
register kept by the Registrar. Any notice or communication shall also be so
mailed to any Person described in TIA Section 313(c), to the extent required by
the TIA. Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided
above within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it
shall mail a copy to the Trustee and each Agent at the same time.
Section 12.03. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES.
Holders may communicate pursuant to TIA Section 312(b) with
other Holders with respect to their rights under this Indenture or the Notes.
The Company, the Trustee, the Registrar and anyone else shall have the
protection of TIA Section 312(c).
Section 12.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee
to take any action under this Indenture, other than in connection with initial
issuance of the Notes hereunder, the Company shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 12.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and
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(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 12.05 hereof) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been satisfied.
Section 12.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA Section 314(a)(4)) shall comply with the provisions of
TIA Section 314(e) and shall include:
(a) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she
has made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition has
been satisfied; and
(d) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been satisfied.
Section 12.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a
meeting of Holders. The Registrar or Paying Agent may make reasonable rules and
set reasonable requirements for its functions.
Section 12.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS.
No director, officer, employee, incorporator or stockholder of
the Company or any Guarantor, as such, shall have any liability for any
obligations of the Company or the Guarantors under the Notes, this Indenture,
the Note Guarantees or for any claim based on, in respect of, or by reason of,
such obligations or their creation. Each Holder of Notes by accepting a Note
waives and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes. The waiver may not be effective to
waive liabilities under the federal securities laws.
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Section 12.08. GOVERNING LAW.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE
USED TO CONSTRUE THIS INDENTURE AND THE NOTES WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
Section 12.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret any other
indenture, loan or debt agreement of the Company or its Subsidiaries or of any
other Person. Any such indenture, loan or debt agreement may not be used to
interpret this Indenture.
Section 12.10. SUCCESSORS.
All agreements of the Company in this Indenture and the Notes
shall bind its successors. All agreements of the Trustee in this Indenture shall
bind its successors.
Section 12.11. SEVERABILITY.
In case any provision in this Indenture or in the Notes shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
Section 12.12. COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Indenture.
Each signed copy shall be an original, but all of them together represent the
same agreement.
Section 12.13. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of
the Articles and Sections of this Indenture have been inserted for convenience
of reference only, are not to be considered a part of this Indenture and shall
in no way modify or restrict any of the terms or provisions hereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed as of the day and year first above written.
FLORIDA PANTHERS HOLDINGS, INC.
By: /s/ William M. Pierce
---------------------------------------
Name: William M. Pierce
Title: Senior Vice President
[REMAINDER OF THIS SIGNATURE PAGE INTENTIONALLY LEFT BLANK]
S-1 of 6
<PAGE> 116
2301 SE 17TH ST, INC.
ARENA DEVELOPMENT COMPANY, INC.
ARENA OPERATING COMPANY, INC.
BOCA BY DESIGN, INC.
BOCA RATON CATERERS, INC.
BOCA RATON RESORT AND CLUB, INC.
COYOTE HOLDINGS, INC.
DECOMA INVESTMENT, INC. I
DECOMA INVESTMENT, INC. II
FLORIDA GOLF MANAGEMENT, INC.
FLORIDA HOSPITALITY SERVICES, INC.
FLORIDA PANTHERS HOCKEY CLUB, INC.
FLORIDA PANTHERS HOTEL CORPORATION
FLORIDA PANTHERS ICE VENTURES, INC.
FLORIDA PANTHERS NAPLES, INC.
FPH MANAGEMENT, INC.
FPH/RHI MERGER CORP., INC.
MIZNER CENTER, INC.
PANTHERS AHL HOCKEY CORP.
PANTHERS BOCA GENERAL PARTNER, INC.
PANTHERS BOCA LIMITED PARTNER, INC.
PANTHERS BRGP CORPORATION
PANTHERS BRHC MANAGEMENT
CORPORATION
PANTHERS BRLP CORPORATION
PANTHERS EDGEWATER RESORT, INC.
PANTHERS GREY OAKS, INC.
PANTHERS PLANTATION GOLF, INC.
RAHN BAHIA, INC.
RAHN BAHIA MAR, INC.
RAHN BAHIA MAR MGMT., INC.
RAHN PIER, INC.
RAHN PIER MGT., INC.
RESORTHILL, INC.
S-2 of 6
<PAGE> 117
WRIGHT-BILT CORP.
Each by its authorized officer:
By: /s/ William M. Pierce
---------------------------------------
Name: William M. Pierce
Title: Vice President
DESERT JEWEL DESTINATIONS, L.L.C.
By: BILTMORE HOTEL PARTNERS, L.L.L.P.,
managing member
By: WRIGHT-BILT CORP., general partner
By: /s/ William M. Pierce
------------------------------------
Name: William M. Pierce
Title: Vice President
PER, L.L.C.
By: PANTHERS EDGEWATER RESORT, INC.,
managing member
By: /s/ William M. Pierce
---------------------------------------
Name: William M. Pierce
Title: Vice President
2301 MGT., LTD.
By: 2301 SE 17TH ST, INC., general partner
By: /s/ William M. Pierce
---------------------------------------
Name: William M. Pierce
Title: Vice President
S-3 of 6
<PAGE> 118
2301 SE 17TH ST., LTD.
By: 2301 MGT., LTD., general partner
By: 2301 SE 17TH ST, INC., general
partner
By: /s/ William M. Pierce
-----------------------------------
Name: William M. Pierce
Title: Vice President
ARENA DEVELOPMENT COMPANY, LTD.
By: ARENA DEVELOPMENT COMPANY, INC.,
general partner
By: /s/ William M. Pierce
---------------------------------------
Name: William M. Pierce
Title: Vice President
ARENA OPERATING COMPANY, LTD.
By: ARENA OPERATING COMPANY, INC.,
general partner
By: /s/ William M. Pierce
---------------------------------------
Name: William M. Pierce
Title: Vice President
FLORIDA PANTHERS HOCKEY CLUB, LTD.
By: FLORIDA PANTHERS HOCKEY CLUB, INC.,
general partner
By: /s/ William M. Pierce
---------------------------------------
Name: William M. Pierce
Title: Vice President
S-4 of 6
<PAGE> 119
LEHILL PARTNERS L.P.
By: PELICAN HILL ASSOCIATES, L.P.,
general partner
By: RESORTHILL, INC., general partner
By: /s/ William M. Pierce
-----------------------------------
Name: William M. Pierce
Title: Vice President
PANTHERS BRHC LIMITED
By: PANTHERS BRGP CORPORATION,
general partner
By: /s/ William M. Pierce
---------------------------------------
Name: William M. Pierce
Title: Vice President
PANTHERS RPN LIMITED
By: PANTHERS EDGEWATER RESORT, INC.,
general partner
By: /s/ William M. Pierce
---------------------------------------
Name: William M. Pierce
Title: Vice President
PELICAN HILL ASSOCIATES, L.P.
By: RESORTHILL, INC., general partner
By: /s/ William M. Pierce
---------------------------------------
Name: William M. Pierce
Title: Vice President
RAHN BAHIA MAR, G.P., LTD.
By: RAHN BAHIA MAR, INC.,
general partner
By: /s/ William M. Pierce
---------------------------------------
Name: William M. Pierce
Title: Vice President
S-5 of 6
<PAGE> 120
RAHN BAHIA MAR, LTD.
By: RAHN BAHIA MAR, G.P., LTD.,
general partner
By: RAHN BAHIA MAR, INC.,
general partner
By: /s/ William M. Pierce
-----------------------------------
Name: William M. Pierce
Title: Vice President
BILTMORE HOTEL PARTNERS, L.L.L.P.
By: WRIGHT-BILT CORP.,
general partner
By: /s/ William M. Pierce
---------------------------------------
Name: William M. Pierce
Title: Vice President
THE BANK OF NEW YORK, as Trustee
By: /s/ Marie E. Trimboli
---------------------------------------
Name: Marie E. Trimboli
Title: Assistant Treasurer
S-6 of 6
<PAGE> 121
EXHIBIT A
[Face of Note]
[FOR GLOBAL NOTES: THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN
THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF
THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY
BE REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE
MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE
INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR
CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL
NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN
CONSENT OF THE COMPANY.]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1993, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER
THIS NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF
THIS NOTE BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER
SUCH SECURITY, PRIOR TO THE DATE WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS NOTE (OR ANY PREDECESSOR OF THIS
NOTE) (THE "RESALE RESTRICTION TERMINATION DATE") ONLY (A) TO THE COMPANY OR
ANY SUBSIDIARY, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT
TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144"), TO A PERSON IT REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR
OUTSIDE THE UNTIED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND
THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO
CLAUSE (E) PRIOR TO THE RESALE RESTRICTION
<PAGE> 122
TERMINATION DATE TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND (ii)
IN EACH OF THE FOREGOING CASES, TO REQUIREMENT THAT A CERTIFICATE OF TRANSFER
IN THE FORM APPEARING ON THIS NOTE IS COMPLETED AND DELIVERED BY THE TRANSFEROR
TO THE TRANSFER AGENT. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF A HOLDER
AFTER THE RESALE RESTRICTION TERMINATION DATE.
CUSIP/CINS:______________
No. R- _________________ U.S.$___________
FLORIDA PANTHERS HOLDINGS, INC.
9 7/8% Senior Subordinated Notes due 2009
FLORIDA PANTHERS HOLDINGS, INC., a Delaware corporation (the
"COMPANY", which term includes any successor under the Indenture hereinafter
referred to) for value received, promises to pay to __________________________,
or its registered assigns, the principal sum of AND NO/100 UNITED STATES
DOLLARS (U.S.$___________) on April 15, 2009.
Interest Payment Dates: April 15 and October 15
Record Dates: April 1 and October 1
2301 Mgt., Ltd., a Florida limited partnership, 2301 SE 17th
St., Inc., a Florida corporation, 2301 SE 17th St., Ltd., a Florida limited
partnership, Arena Development Company, Inc., a Florida corporation, Arena
Development Company, Ltd., a Florida limited partnership, Arena Operating
Company, Inc., a Florida corporation, Arena Operating Company, Ltd., a Florida
limited partnership, Biltmore Hotel Partners, LLLP, an Arizona limited
liability limited partnership, Boca By Design, Inc., a Florida corporation,
Boca Raton Caterers, Inc., a Florida corporation, Boca Raton Caterers, Inc., a
Florida corporation, Boca Raton Resort and Club, Inc., a Florida corporation,
Coyote Holdings, Inc., a Delaware corporation, Decoma Investment, Inc. I, a
Texas corporation, Decoma Investment, Inc. II, a Texas corporation, Desert
Jewel Destinations, L.L.C., Florida Golf Management, Inc., a Florida
corporation, Florida Hospitality Services, Inc., a Florida corporation, Florida
Panthers Hockey Club, Inc., a Florida corporation, Florida Panthers Hockey
Club, Ltd., a Florida limited partnership, Florida Panthers Hotel Corporation,
a Delaware corporation, Florida Panthers Ice Ventures, Inc., a Florida
corporation, Florida Panthers Naples, Inc., a Florida corporation, FPH
Management, Inc., a Florida corporation, FPH/RHI Merger
A-2
<PAGE> 123
Corp., Inc., a Florida corporation, LeHill Partners, L.P., a Delaware limited
partnership, Mizner Center, Inc., a Florida corporation, Panthers AHL Hockey
Corp., a Florida corporation, Panthers Boca General Partner, Inc., a Florida
corporation, Panthers Boca Limited Partner, Inc., a Florida corporation,
Panthers BRGP Corporation, a Florida corporation, Panthers BRHC Limited, a
Florida limited partnership, Panthers BRHC Management Corporation, a Florida
corporation, Panthers BRLP Corporation, a Florida corporation, Panthers
Edgewater Resort, Inc., a Delaware corporation, Panthers Grey Oaks, Inc., a
Florida corporation, Panthers Plantation Golf, Inc., a Florida corporation,
Panthers RPN Limited, a Florida limited partnership, Pelican Hill Associates,
L.P., a Delaware limited partnership, PER, L.L.C., a Delaware limited liability
corporation, Rahn Bahia, Inc., a Florida corporation, Rahn Bahia Mar, G.P.,
Ltd., a Florida limited partnership, Rahn Bahia Mar, Inc., a Florida
corporation, Rahn Bahia Mar, Ltd., a Florida limited partnership, Rahn Bahia
Mar Management, Inc., a Florida corporation, Rahn Pier, Inc., a Florida
corporation, Rahn Pier Management, Inc., a Florida corporation, Resort, Inc.,
an Illinois corporation, Wright-Bilt Corp., a Delaware corporation
(collectively, the "GUARANTORS", which term includes any successors under the
Indenture hereinafter referred to and any Subsidiary of the Company that
provides a Note Guarantee pursuant to the Indenture), have jointly and
severally, fully and unconditionally guaranteed the payment of principal of,
premium and Liquidated Damages, if any, and interest on the Notes.
Reference is hereby made to the further provisions of this
Note set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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<PAGE> 124
IN WITNESS WHEREOF, the Company has caused this Note to be
signed manually or by facsimile by its duly authorized officers.
FLORIDA PANTHERS HOLDINGS, INC.
By:
-----------------------------------
Name:
Title:
Dated:
(Trustee's Certificate of Authentication)
This is one of the Notes referred to
in the within-mentioned Indenture:
THE BANK OF NEW YORK,
as Trustee
By:
---------------------------------------
Authorized Signatory
A-4
<PAGE> 125
[Reverse Side of Note]
FLORIDA PANTHERS HOLDINGS, INC.
9 7/8% Senior Subordinated Notes due 2009
Capitalized terms used herein shall have the meanings
assigned to them in the Indenture referred to below unless otherwise indicated.
1. INTEREST.
FLORIDA PANTHERS HOLDINGS, INC., a Delaware corporation (the
"COMPANY"), promises to pay interest on the principal amount of this Note at
97/8% per annum from April 15, 1999 until maturity and shall pay Liquidated
Damages payable pursuant to the Registration Rights Agreement referred to
below. The Company will pay interest and Liquidated Damages, if any,
semi-annually in arrears on April 15 and October 15 of each year, or if any
such day is not a Business Day, on the next succeeding Business Day (each, an
"INTEREST PAYMENT DATE"). Interest on the Notes will accrue from the most
recent date to which interest has been paid or, if no interest has been paid,
from the date of issuance; PROVIDED that if there is no existing Default in the
payment of interest, and if this Note is authenticated between a record date
referred to on the face hereof and the next succeeding Interest Payment Date,
interest shall accrue from such next succeeding Interest Payment Date;
PROVIDED, FURTHER, that the first Interest Payment Date shall be October 15,
1999. The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal and premium, if any,
from time to time on demand at a rate that is 1% per annum in excess of the
rate then in effect; it shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue installments of interest
and Liquidated Damages, if any (without regard to any applicable grace
periods), from time to time on demand at the same rate to the extent lawful.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
2. METHOD OF PAYMENT.
The Company will pay interest on the Notes (except
defaulted interest) and Liquidated Damages, if any, to the Persons who are
registered Holders of Notes at the close of business on the April 1 or October
1 next preceding the Interest Payment Date, even if such Notes are canceled
after such record date and on or before such Interest Payment Date, except as
provided in Section 2.12 of the Indenture with respect to defaulted interest.
The Notes will be payable as to principal, premium and Liquidated Damages, if
any, and interest at the office or agency of the Company maintained for such
purpose within or without the City and State of New York, or, at the option of
the Company, payment of interest and Liquidated Damages, if any, may be made by
check mailed to the Holders at their addresses set forth in the register of
Holders, and
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<PAGE> 126
provided that payment by wire transfer of immediately available funds will be
required with respect to principal of and interest, premium and Liquidated
Damages, if any, on, all Global Notes and all other Notes the Holders of which
shall have provided wire transfer instructions to the Company or the Paying
Agent. Such payment shall be in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts.
3. PAYING AGENT AND REGISTRAR.
Initially, The Bank of New York, the Trustee under the
Indenture, will act as Paying Agent and Registrar. The Company may change any
Paying Agent or Registrar without notice to any Holder. The Company or any of
its Subsidiaries may act in any such capacity.
4. INDENTURE.
The Company issued the Notes under an Indenture dated as of
April 21, 1999 (the "INDENTURE") among the Company, the Guarantors named on the
signature pages thereto and the Trustee. The terms of the Notes include those
stated in the Indenture and those made part of the Indenture by reference to the
Trust Indenture Act of 1939, as amended (15 U.S. Code Sections 77aaa-77bbbb).
The Notes are subject to all such terms, and Holders are referred to the
Indenture and such Act for a statement of such terms. To the extent any
provision of this Note conflicts with the express provisions of the Indenture,
the provisions of the Indenture shall govern and be controlling. The Notes are
general obligations of the Company limited to $340 million in aggregate
principal amount.
5. OPTIONAL REDEMPTION.
(a) Except as set forth in subparagraph (b) of this Paragraph
5, the Company shall not have the option to redeem the Notes prior to April 15,
2004. Thereafter, the Company shall have the option to redeem the Notes, in
whole or in part, upon not less than 30 nor more than 60 days' notice, at the
redemption prices (expressed as percentages of principal amount) set forth
below plus accrued and unpaid interest and premium and Liquidated Damages, if
any, thereon to the applicable redemption date, if redeemed during the
twelve-month period beginning on April 15 of the years indicated below:
YEAR PERCENTAGE
---- ----------
2004............................................... 104.9375%
2005............................................... 103.2910%
2006............................................... 101.6450%
2007 and thereafter................................ 100.0000%
(b) Notwithstanding the provisions of subparagraph (a) of
this Paragraph 5, at any time prior to April 15, 2002, the Company may redeem
up to 35% of the aggregate principal amount of Notes originally issued under
the Indenture at a redemption price of 109.875% of the aggregate principal
amount thereof, plus accrued and unpaid interest and premium and Liquidated
Damages, if any, to the redemption date, with the net cash proceeds of one or
more Qualified Equity Offerings; PROVIDED that at least $221.0 million of the
aggregate principal amount of Notes remains outstanding immediately after the
occurrence of such redemption (excluding Notes held by the Company and its
Subsidiaries) and the redemption occurs within 60 days of the date of the
closing of such Qualified Equity Offering.
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<PAGE> 127
6. MANDATORY REDEMPTION.
Except as set forth in paragraph 7 below, the Company shall
not be required to make mandatory redemption payments with respect to the
Notes.
7. REPURCHASE AT OPTION OF HOLDER.
(a) If there is a Change of Control, the Company shall be
required to make an offer (a "CHANGE OF CONTROL OFFER") to repurchase all or
any part (equal to $1,000 or an integral multiple thereof) of each Holder's
Notes at a purchase price equal to 101% of the aggregate principal amount
thereof plus accrued and unpaid interest and Liquidated Damages, if any,
thereon, to the date of purchase (the "CHANGE OF CONTROL PAYMENT"). Within 30
days following any Change of Control, the Company shall mail a notice to each
Holder setting forth the procedures governing the Change of Control Offer as
required by the Indenture.
(b) When the aggregate amount of Excess Proceeds from one or
more Asset Sales exceeds $15.0 million, the Company shall commence an offer to
all Holders of Notes (an "ASSET SALE OFFER") pursuant to Section 3.09 of the
Indenture to purchase the maximum principal amount of Notes that may be
purchased out of the Excess Proceeds at an offer price in cash in an amount
equal to 100% of the principal amount thereof plus accrued and unpaid interest
and Liquidated Damages, if any, thereon to the date fixed for the closing of
such offer in accordance with the procedures set forth in the Indenture. 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 such deficiency for
any purpose not otherwise prohibited by the Indenture. If the aggregate
principal amount of Notes surrendered by Holders thereof exceeds the amount of
Excess Proceeds, the Trustee shall select the Notes to be purchased on a PRO
RATA basis. Holders of Notes that are the subject of an offer to purchase will
receive an Asset Sale Offer from the Company prior to any related purchase date
and may elect to have such Notes purchased by completing the form entitled
"Option of Holder to Elect Purchase" on the reverse of the Notes.
8. NOTICE OF REDEMPTION.
A notice of redemption will be mailed at least 30 days but
not more than 60 days before the redemption date to each Holder whose Notes are
to be redeemed at its registered address. Notes in denominations larger than
$1,000 may be redeemed in part but only in whole multiples of $1,000, unless
all of the Notes held by a Holder are to be redeemed. On and after the
redemption date interest ceases to accrue on Notes or portions thereof called
for redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE.
The Notes are in registered form without coupons in
denominations of $1,000 and integral multiples of $1,000. The transfer of Notes
may be registered and Notes may be exchanged as provided in the Indenture. The
Registrar and the Trustee 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 Indenture.
The Company need not exchange or register the transfer of any Note or portion
of a Note selected for redemption, except for the unredeemed portion of any
Note being redeemed in part. Also, the Company need not exchange or register
the transfer of any Notes for a period of 15 days before the mailing of a
notice of redemption of Notes to be redeemed or during the period between a
record date and the corresponding Interest Payment Date.
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<PAGE> 128
10. PERSONS DEEMED OWNERS.
The registered Holder of a Note may be treated as its owner
for all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER.
Subject to certain exceptions, the Indenture or the Notes may
be amended or supplemented with the consent of the Holders of at least a
majority in principal amount of the then outstanding Notes voting as a single
class, and any existing default or compliance with any provision of the
Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes voting as a single
class. Without the consent of any Holder of a Note, the Indenture or the Notes
may be amended or supplemented 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 or any Guarantor's
obligations to Holders of the Notes in case of a merger or consolidation, to
make any change that would provide any additional rights or benefits to the
Holders of the Notes or that does not adversely affect the legal rights under
the Indenture of any such Holder, to comply with the requirements of the SEC in
order to effect or maintain the qualification of the Indenture under the Trust
Indenture Act, to allow any Subsidiary of the Company to guarantee the Notes,
or to provide for collateral for the Notes or one or more Note Guarantees.
12. DEFAULTS AND REMEDIES.
Events of Default include: (i) default for 30 days in the
payment when due of interest on, or Additional Interest with respect to, the
Notes; (ii) default in payment when due of principal of or premium, if any, on
the Notes, whether or not prohibited by Article Eleven of the Indenture; (iii)
failure by the Company or the Company's Subsidiaries to comply with the
provisions of Sections 4.07, 4.09, 4.10, 4.15 or 5.01 of the Indenture; (iv)
failure by the Company or the Company's Restricted Subsidiaries for 60 days
after notice to the Company by the Trustee or the Holders of at least 25% in
aggregate principal amount of the Notes then outstanding voting as a single
class to comply with certain other agreements in the Indenture or the Notes;
(v) default under certain other agreements relating to Indebtedness of the
Company which default results in the acceleration of such Indebtedness prior to
its express maturity; (vi) certain final judgments for the payment of money
that remain undischarged for a period of 60 days; and (vii) certain events of
bankruptcy or insolvency with respect to the Company or any of its Restricted
Subsidiaries that constitutes a Significant Subsidiary. If any Event of Default
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Notes may declare all the Notes to be
due and payable. Notwithstanding the foregoing, in the case of an Event of
Default arising from certain events of bankruptcy or insolvency, all
outstanding Notes will become due and payable without further action or notice.
Holders may not enforce the Indenture or the Notes except as provided in the
Indenture. Subject to certain limitations, Holders of a majority in principal
amount of the then outstanding Notes may direct the Trustee in its exercise of
any trust or power. The 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) if it determines that
withholding notice is in their interest. The Holders of a majority in aggregate
principal amount of the Notes then outstanding by notice to the Trustee may on
behalf of the Holders of all of the Notes waive any existing Default or Event
of Default and its consequences under the Indenture except a continuing Default
or Event of Default in the payment of principal of, premium and Liquidated
Damages, if any, or interest on the Notes. The Company is required to deliver
to the Trustee annually a statement regarding compliance with the Indenture,
and the Company is required upon becoming aware of any Default or Event of
Default, to deliver to the Trustee a statement specifying such Default or Event
of Default.
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<PAGE> 129
13. NOTE GUARANTEES.
The Company's obligations under the Notes are fully and
unconditionally guaranteed, jointly and severally, by the Guarantors, as
provided in Article Ten of the Indenture.
14. TRUSTEE DEALINGS WITH COMPANY.
The Trustee, in its individual or any other capacity, may
make loans to, accept deposits from, and perform services for the Company, any
Guarantor or any Affiliate of the Company, and may otherwise deal with the
Company, any Guarantor or any Affiliate of the Company, as if it were not the
Trustee.
15. NO RECOURSE AGAINST OTHERS.
A director, officer, employee, incorporator or stockholder,
of the Company or any Guarantor, as such, shall not have any liability for any
obligations of the Company or the Guarantors under the Notes, the Indenture or
the Note Guarantees 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 the issuance of the Notes.
16. AUTHENTICATION.
This Note shall not be valid until authenticated by the
manual signature of the Trustee or an authenticating agent.
17. ABBREVIATIONS.
Customary abbreviations may be used in the name of a Holder
or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by
the entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).
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<PAGE> 130
18. ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND RESTRICTED
DEFINITIVE NOTES.
In addition to the rights provided to Holders of Notes under
the Indenture, Holders of Restricted Global Notes and Restricted Definitive
Notes shall have all the rights set forth in the Registration Rights Agreement
dated as of April 21, 1999, among the Company and the other parties named on
the signature pages thereof (the "REGISTRATION RIGHTS AGREEMENT").
19. CUSIP NUMBERS.
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company has caused CUSIP
numbers to be printed on the Notes and the Trustee may use CUSIP numbers in
notices of redemption as a convenience to Holders. No representation is made as
to the accuracy of such numbers either as printed on the Notes or as contained
in any notice of redemption and reliance may be placed only on the other
identification numbers placed thereon.
The Company will furnish to any Holder upon written request
and without charge a copy of the Indenture and/or the Registration Rights
Agreement. Requests may be made to:
FLORIDA PANTHERS HOLDINGS, INC.
450 East Las Olas Boulevard
Suite 1400
Fort Lauderdale, Florida 33301
Attention: William M. Pierce
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<PAGE> 131
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to:
_______ (Insert assignee's legal name)
_______ (Insert assignee's soc. sec. or
tax I.D. no.)
_______
_______
_______ (Print or type assignee's name,
address and zip code)
and irrevocably appoint________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date:__________________________
Your Signature:___________________________
(Sign exactly as your name appears on the
face of this Note)
Signature Guarantee*:_________________________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
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<PAGE> 132
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the
Company pursuant to Section 4.10 or 4.15 of the Indenture, check the
appropriate box below:
/ / Section 4.10 / / Section 4.15
If you want to elect to have only part of the Note purchased
by the Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state
the amount you elect to have purchased:
$_______________
Date:__________________________
Your Signature:______________________
(Sign exactly as your name appears on
the face of this Note)
Tax Identification No.:______________
Signature Guarantee*:_______________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
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<PAGE> 133
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE
The following exchanges of a part of this Global Note for an
interest in another Global Note or for a Definitive Note, or exchanges of a
part of another Global Note or Definitive Note for an interest in this Global
Note, have been made:
<TABLE>
<CAPTION>
Principal Amount Signature of
Amount of Decrease in Amount of Increase in of This Global Note Authorized Signatory
Principal Amount Principal Amount Following Such of Trustee or
Date of Exchange of This Global Note of This Global Note Decrease (Or Increase) Note Custodian
---------------- --------------------- --------------------- ---------------------- --------------------
<S> <C> <C> <C> <C>
</TABLE>
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<PAGE> 134
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
FLORIDA PANTHERS HOLDINGS, INC.
450 East Los Olas Boulevard
Suite 1400
Fort Lauderdale, Florida 33301
Attention: William M. Pierce
THE BANK OF NEW YORK
101 Barclay Street, 21W
New York, New York 10286
Attention: Corporate Trust Trustee Administration
ss Re: 9 7/8% Senior Subordinated Notes due 2009
Reference is hereby made to the Indenture, dated as of April
21, 1999 (the "INDENTURE"), among FLORIDA PANTHERS HOLDINGS, INC., as issuer
(the "COMPANY"), the Guarantors named on the signature pages thereto and THE
BANK OF NEW YORK, as trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.
___________________ (the "TRANSFEROR") owns and proposes to
transfer the Note[s] or interest in such Note[s] specified in Annex A hereto,
in the principal amount of $___________ in such Note[s] or interests (the
"TRANSFER"), to ___________________________ (the "TRANSFEREE"), as further
specified in Annex A hereto. In connection with the Transfer, the Transferor
hereby certifies that:
[CHECK ALL THAT APPLY]
1. / / CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN THE 144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A.
The Transfer is being effected pursuant to and in accordance with Rule 144A
under the United States Securities Act of 1933, as amended (the "SECURITIES
ACT"), and, accordingly, the Transferor hereby further certifies that the
beneficial interest or Definitive Note is being transferred to a Person that
the Transferor reasonably believed and believes is purchasing the beneficial
interest or Definitive Note for its own account, or for one or more accounts
with respect to which such Person exercises sole investment discretion, and
such Person and each such account is a "qualified institutional buyer" within
the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A
and such Transfer is in compliance with any applicable blue sky securities laws
of any state of the United States. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the 144A Global Note
and/or the Definitive Note and in the Indenture and the Securities Act.
<PAGE> 135
2. / / CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN THE REGULATION S GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO
REGULATION S. The Transfer is being effected pursuant to and in accordance with
Rule 903 or Rule 904 under the Securities Act and, accordingly, the Transferor
hereby further certifies that (i) the Transfer is not being made to a person in
the United States and (x) at the time the buy order was originated, the
Transferee was outside the United States or such Transferor and any Person
acting on its behalf reasonably believed and believes that the Transferee was
outside the United States or (y) the transaction was executed in, on or through
the facilities of a designated offshore securities market and neither such
Transferor nor any Person acting on its behalf knows that the transaction was
prearranged with a buyer in the United States, (ii) no directed selling efforts
have been made in contravention of the requirements of Rule 903(b) or Rule
904(b) of Regulation S under the Securities Act, (iii) the transaction is not
part of a plan or scheme to evade the registration requirements of the
Securities Act and (iv) if the proposed transfer is being made prior to the
expiration of the Restricted Period, the transfer is not being made to a U.S.
Person or for the account or benefit of a U.S. Person (other than an Initial
Purchaser). Upon consummation of the proposed transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on Transfer enumerated in the Private
Placement Legend printed on the Regulation S Global Note, the Temporary
Regulation S Global Note and/or the Definitive Note and in the Indenture and
the Securities Act.
3. / / CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF
A DEFINITIVE NOTE PURSUANT TO ANY PROVISION OF THE SECURITIES ACT OTHER THAN
RULE 144A OR REGULATION S. The Transfer is being effected in compliance with
the transfer restrictions applicable to beneficial interests in Restricted
Global Notes and Restricted Definitive Notes and pursuant to and in accordance
with the Securities Act and any applicable blue sky securities laws of any
state of the United States, and accordingly the Transferor hereby further
certifies that (check one):
(a) / / such Transfer is being effected pursuant to and in
accordance with Rule 144 under the Securities Act;
or
(b) / / such Transfer is being effected to the Company or a
subsidiary thereof;
or
(c) / / such Transfer is being effected pursuant to an
effective registration statement under the Securities Act and in
compliance with the prospectus delivery requirements of the Securities
Act;
or
(d) / / such Transfer is being effected to an Institutional
Accredited Investor and pursuant to an exemption from the registration
requirements of the Securities Act other than Rule 144A, Rule 144 or
B-2
<PAGE> 136
Rule 904, and the Transferor hereby further certifies that it has not
engaged in any general solicitation within the meaning of Regulation D
under the Securities Act and the Transfer complies with the transfer
restrictions applicable to beneficial interests in a Restricted Global
Note or Restricted Definitive Notes and the requirements of the
exemption claimed, which certification is supported by (1) a
certificate executed by the Transferee in the form of Exhibit D to the
Indenture and (2) an Opinion of Counsel provided by the Transferor or
the Transferee (a copy of which the Transferor has attached to this
certification), to the effect that such Transfer is in compliance with
the Securities Act. Upon consummation of the proposed transfer in
accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the
Definitive Notes and in the Indenture and the Securities Act.
4. / / CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.
(a) / / Check if Transfer is pursuant to Rule 144. (i) The
Transfer is being effected pursuant to and in accordance with Rule 144 under
the Securities Act and in compliance with the transfer restrictions contained
in the Indenture and any applicable blue sky securities laws of any state of
the United States and (ii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act. Upon consummation of the proposed
Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will no longer be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Global Notes, on Restricted Definitive Notes and in the
Indenture.
(b) / / Check if Transfer is Pursuant to Regulation. (i) The
Transfer is being effected pursuant to and in accordance with Rule 904S under
the Securities Act and in compliance with the transfer restrictions contained
in the Indenture and any applicable blue sky securities laws of any state of
the United States and (ii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act. Upon consummation of the proposed
Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will no longer be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Global Notes, on Restricted Definitive Notes and in the
Indenture.
(c) / / Check if Transfer is Pursuant to Other Exemption. (i)
The Transfer is being effected pursuant to and in compliance with an exemption
from the registration requirements of the Securities Act other than Rule 144 or
Rule 904 and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any State of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will not be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes or Restricted Definitive Notes and in the Indenture.
B-3
<PAGE> 137
This certificate and the statements contained herein are made
for your benefit and the benefit of the Company.
[Insert Name of Transferor]
By:
----------------------------------
Name:
Title:
Dated:_____________________
B-4
<PAGE> 138
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) / / a beneficial interest in the:
(i) / / 144A Global Note (CUSIP __________); or
(ii) / / Regulation S Global Note (CUSIP __________); or
(b) / / a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) / / a beneficial interest in the:
(i) / / 144A Global Note (CUSIP __________); or
(ii) / / Regulation S Global Note (CUSIP __________); or
(iii) / / Unrestricted Global Note (CUSIP _________); or
(b) / / a Restricted Definitive Note; or
(c) / / an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
B-5
<PAGE> 139
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
FLORIDA PANTHERS HOLDINGS, INC.
450 East Los Olas Boulevard
Suite 1400
Fort Lauderdale, Florida 33301
Attention: William M. Pierce
THE BANK OF NEW YORK
101 Barclay Street, 21W
New York, New York 10286
Attention: Corporate Trust Trustee Administration
Re: 9 7/8% Senior Subordinated Notes due 2009
(CUSIP ____________)
Reference is hereby made to the Indenture, dated as of April
21, 1999 (the "INDENTURE"), among FLORIDA PANTHERS HOLDINGS, INC., as issuer
(the "COMPANY"), the Guarantors named on the signature pages thereto and THE
BANK OF NEW YORK, as trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.
__________________________ (the "OWNER") owns and proposes to
exchange the Note[s] or interest in such Note[s] specified herein, in the
principal amount of $____________ in such Note[s] or interests (the
"EXCHANGE"). In connection with the Exchange, the Owner hereby certifies that:
1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL
INTERESTS IN A RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR
BENEFICIAL INTERESTS IN AN UNRESTRICTED GLOBAL NOTE
(a) / / Check if Exchange is from beneficial interest in a
Restricted Global Note to beneficial interest in an Unrestricted Global Note.
In connection with the Exchange of the Owner's beneficial interest in a
Restricted Global Note for a beneficial interest in an Unrestricted Global Note
in an equal principal amount, the Owner hereby certifies (i) the beneficial
interest is being acquired for the Owner's own account without transfer, (ii)
such Exchange has been effected in compliance with the transfer restrictions
applicable to the Global Notes and pursuant to and in accordance with the
United States Securities Act of 1933, as amended (the "SECURITIES ACT"), (iii)
the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act and (iv) the beneficial interest in an Unrestricted Global Note
is being acquired in compliance with any applicable blue sky securities laws of
any state of the United States.
<PAGE> 140
(b) / / Check if Exchange is from beneficial interest in a
Restricted Global Note to Unrestricted Definitive Note. In connection with the
Exchange of the Owner's beneficial interest in a Restricted Global Note for an
Unrestricted Definitive Note, the Owner hereby certifies (i) the Definitive
Note is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance
with the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the Definitive Note is
being acquired in compliance with any applicable blue sky securities laws of
any state of the United States.
(c) / / Check if Exchange is from Restricted Definitive Note
to beneficial interest in an Unrestricted Global Note. In connection with the
Owner's Exchange of a Restricted Definitive Note for a beneficial interest in
an Unrestricted Global Note, the Owner hereby certifies (i) the beneficial
interest is being acquired for the Owner's own account without transfer, (ii)
such Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance
with the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the beneficial interest is
being acquired in compliance with any applicable blue sky securities laws of
any state of the United States.
(d) / / Check if Exchange is from Restricted Definitive Note
to Unrestricted Definitive Note. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner
hereby certifies (i) the Unrestricted Definitive Note is being acquired for the
Owner's own account without transfer, (ii) such Exchange has been effected in
compliance with the transfer restrictions applicable to Restricted Definitive
Notes and pursuant to and in accordance with the Securities Act, (iii) the
restrictions on transfer contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities Act
and (iv) the Unrestricted Definitive Note is being acquired in compliance with
any applicable blue sky securities laws of any state of the United States.
2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL
INTERESTS IN RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR
BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES
(a) / / Check if Exchange is from beneficial interest in a
Restricted Global Note to Restricted Definitive Note. In connection with the
Exchange of the Owner's beneficial interest in a Restricted Global Note for a
Restricted Definitive Note with an equal principal amount, the Owner hereby
certifies that the Restricted Definitive Note is being acquired for the Owner's
own account without transfer. Upon consummation of the proposed Exchange in
accordance with the terms of the Indenture, the Restricted Definitive Note
issued will continue to be subject to the restrictions on transfer enumerated
in the Private Placement Legend printed on the Restricted Definitive Note and
in the Indenture and the Securities Act.
C-2
<PAGE> 141
(b) Check if Exchange is from Restricted Definitive Note to
beneficial interest in a Restricted Global Note. In connection with the
Exchange of the Owner's Restricted Definitive Note for a beneficial interest in
the [CHECK ONE] / / 144A Global Note, / / Regulation S Global Note, with an
equal principal amount, the Owner hereby certifies (i) the beneficial interest
is being acquired for the Owner's own account without transfer and (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance
with the Securities Act, and in compliance with any applicable blue sky
securities laws of any state of the United States. Upon consummation of the
proposed Exchange in accordance with the terms of the Indenture, the beneficial
interest issued will be subject to the restrictions on transfer enumerated in
the Private Placement Legend printed on the relevant Restricted Global Note and
in the Indenture and the Securities Act.
This certificate and the statements contained herein are made
for your benefit and the benefit of the Company.
[Insert Name of Transferor]
By:
-----------------------------------
Name:
Title:
Dated:____________________
C-3
<PAGE> 142
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
FLORIDA PANTHERS HOLDINGS, INC.
450 East Los Olas Boulevard
Suite 1400
Fort Lauderdale, Florida 33301
Attention: William M. Pierce
THE BANK OF NEW YORK
101 Barclay Street, 21W
New York, New York 10286
Attention: Corporate Trust Trustee Administration
Re: 9 7/8% Senior Subordinated Notes due 2009
Reference is hereby made to the Indenture, dated as of April
21, 1999 (the "INDENTURE"), among FLORIDA PANTHERS HOLDINGS, INC., as issuer
(the "COMPANY"), the Guarantors named on the signature pages thereto and THE
BANK OF NEW YORK, as trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.
In connection with our proposed purchase of $____________
aggregate principal amount of:
(a) / / a beneficial interest in a Global Note, or
(b) / / a Definitive Note,
we confirm that:
1. We understand that the Notes have not been registered
under the Securities Act of 1933, as amended (the "SECURITIES ACT"), and may
not be sold except as permitted in the following sentence. We agree on our own
behalf and on behalf of any investor account for which we are purchasing the
Notes to offer, sell or otherwise transfer such Notes prior to the date which
is two years after the later of the date of original issue and the last date on
which the Company or any affiliate of the Company was the owner of such Notes,
or any predecessor thereto (the "RESALE RESTRICTION TERMINATION DATE") only (a)
to the Company, (b) pursuant to a registration statement which has been
declared effective under the Securities Act, (c) for so long as the Notes are
eligible for resale pursuant to Rule 144A under the Securities Act, to a person
we reasonably believe is a qualified institutiosnal buyer under Rule 144A (a
"QIB") that purchases for its own account or for the account of a QIB to whom
notice is given that the transfer is being made in reliance on Rule 144A, (d)
pursuant to offers and sales to non-U.S. Persons that occur outside the United
States within the meaning of Regulations S
<PAGE> 143
under the Securities Act, (e) to an institutional "accredited investor" within
the meaning of subparagraph (a)(1), (2), (3) or (7) of Rule 501 under the
Securities Act that is acquiring the Notes for its own account or for the
account of such an institutional "accredited investor" for investment purposes
and not with a view to, or for offer or sale in connection with, any
distribution thereof in violation of the Securities Act or (f) pursuant to any
other available exemption from the registration requirements of the Securities
Act, subject in each of the foregoing cases to any requirement of law that the
disposition of our property and the property of such investor account or
accounts be at all times within our or their control and to compliance with any
applicable state securities laws. The foregoing restrictions on resale will not
apply subsequent to the Resale Restriction Termination Date. If any resale or
other transfer of the Notes is proposed to be made pursuant to clause (e) above
prior to the Resale Restriction Termination Date, the transferor shall deliver a
letter from the transferee substantially in the form of this letter to the
Trustee, which shall provide, among other things, that the transferee is an
institutional "accredited investor" within the meaning of subparagraph (a)(1),
(2), (3) or (7) or Rule 501 under the Securities Act and that it is acquiring
such Notes for investment purposes and not for distribution in violation of the
Securities Act. We acknowledge that the Company and the Trustee reserve the
right prior to any offer, sale or other transfer prior to the Resale Restriction
Termination Date of the Notes pursuant to clauses (d), (e) and (f) above to
require the delivery of an Opinion of Counsel, certifications and/or other
information satisfactory to the Company and the Trustee.
2. We are an institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act)
purchasing for our own account or for the account of such an institutional
"accredited investor", and we are acquiring the Notes for investment purposes
and not with a view to, or for offer or sale in connection with, any
distribution in violation of the Securities Act and we have such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of our investment in the Notes, and we and any accounts for
which we are acting are each able to bear the economic risk of our or its
investment.
3. We are acquiring the Notes or beneficial interest therein
purchased by us for our own account or for one or more accounts (each of which
is an institutional "accredited investor") as to each of which we exercise sole
investment discretion.
You and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby.
[Insert Name of Accredited Investor]
By:
------------------------------------
Name:
Title:
Dated:______________________
D-2
<PAGE> 1
EXHIBIT 4.4
REGISTRATION RIGHTS AGREEMENT
DATED AS OF APRIL 21, 1999
BY AND AMONG
FLORIDA PANTHERS HOLDINGS, INC.,
THE GUARANTORS NAMED ON THE
SIGNATURE PAGES HERETO
AND
BEAR, STEARNS & CO. INC.
BT ALEX. BROWN INCORPORATED
ALLEN & COMPANY INCORPORATED
JEFFERIES & COMPANY, INC.
RAYMOND JAMES & ASSOCIATES, INC.
<PAGE> 2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT") is made and
entered into as of April 21, 1999, by and among Florida Panthers Holdings, Inc.,
a Delaware corporation (the "COMPANY"), the Guarantors named on the signature
pages hereto (each a "GUARANTOR" and, collectively, the "GUARANTORS"), Bear,
Stearns & Co. Inc., BT Alex. Brown Incorporated, Allen & Company Incorporated,
Jefferies & Company, Inc. and Raymond James & Associates, Inc. (collectively,
the "INITIAL PURCHASERS"), which has agreed to purchase the Company's 9.875%
Senior Subordinated Notes due 2009 (the "NOTES") pursuant to the Purchase
Agreement (as defined below).
This Agreement is made pursuant to the Purchase Agreement, dated April
15, 1999 (the "PURCHASE AGREEMENT"), by and among the Company, the Guarantors
and the Initial Purchasers. In order to induce the Initial Purchasers to
purchase the Notes, the Company and the Guarantors have agreed to provide the
registration rights set forth in this Agreement. The execution and delivery of
this Agreement is a condition to the obligations of the Initial Purchasers set
forth in Section 2 of the Purchase Agreement. Capitalized terms used herein and
not otherwise defined shall have the meaning assigned to them the Indenture,
dated April 21, 1999, between the Company, the Guarantors and The Bank of New
York, as Trustee, relating to the Notes and the Exchange Notes (the
"INDENTURE").
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have
the following meanings:
ACT: The Securities Act of 1933, as amended.
AFFILIATE: As defined in Rule 144 of the Act.
BROKER-DEALER: Any broker or dealer registered under the Exchange Act.
CERTIFICATED SECURITIES: Definitive Notes, as defined in the Indenture.
CLOSING DATE: The date hereof.
COMMISSION: The Securities and Exchange Commission.
<PAGE> 3
CONSUMMATE: An Exchange Offer shall be deemed "Consummated" for
purposes of this Agreement upon the occurrence of (a) the filing and
effectiveness under the Act of the Exchange Offer Registration Statement
relating to the Exchange Notes to be issued in the Exchange Offer, (b) the
maintenance of such Exchange Offer Registration Statement continuously effective
and the keeping of the Exchange Offer open for a period not less than the period
required pursuant to Section 3(b) hereof and (c) the delivery by the Company to
the Registrar under the Indenture of Exchange Notes in the same aggregate
principal amount as the aggregate principal amount of Notes tendered by Holders
thereof pursuant to the Exchange Offer.
CONSUMMATION DEADLINE: As defined in Section 3(b) hereof.
EFFECTIVENESS TARGET DATE: As defined in Section 3(a) and 4(a) hereof.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended.
EXCHANGE NOTES: The Company's 9.875% Senior Subordinated Notes due 2009
to be issued pursuant to the Indenture (i) in the Exchange Offer or (ii) as
contemplated by Section 4 hereof.
EXCHANGE OFFER: The exchange and issuance by the Company of a principal
amount of Exchange Notes (which shall be registered pursuant to the Exchange
Offer Registration Statement) equal to the outstanding principal amount of Notes
that are tendered by such Holders in connection with such exchange and issuance.
EXCHANGE OFFER REGISTRATION STATEMENT: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.
EXEMPT RESALES: The transactions in which the Initial Purchasers
propose to sell the Notes to certain "qualified institutional buyers," as such
term is defined in Rule 144A under the Act.
FILING DEADLINE: As defined in Sections 3(a) and 4(a) hereof.
HOLDERS: As defined in Section 2 hereof.
PROSPECTUS: The prospectus included in a Registration Statement at the
time such Registration Statement is declared effective, as amended or
supplemented by any prospectus supplement and by all other amendments thereto,
including post-effective amendments, and all material incorporated by reference
into such Prospectus.
RECOMMENCEMENT DATE: As defined in Section 6(d) hereof.
REGISTRATION DEFAULT: As defined in Section 5 hereof.
<PAGE> 4
REGISTRATION STATEMENT: Any registration statement of the Company and
the Guarantors relating to (a) an offering of Exchange Notes pursuant to an
Exchange Offer or (b) the registration for resale of Transfer Restricted
Securities pursuant to the Shelf Registration Statement, in each case, (i) that
is filed pursuant to the provisions of this Agreement and (ii) including the
Prospectus included therein, all amendments and supplements thereto (including
post-effective amendments) and all exhibits and material incorporated by
reference therein.
RULE 144: Rule 144 promulgated under the Act.
SHELF REGISTRATION STATEMENT: As defined in Section 4 hereof.
SUSPENSION NOTICE: As defined in Section 6(d) hereof.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb)
as in effect on the date of the Indenture.
TRANSFER RESTRICTED SECURITIES: Each (A) Note, until the earliest to
occur of (i) the date on which such Note is exchanged in the Exchange Offer for
an Exchange Note which is entitled to be resold to the public by the Holder
thereof without complying with the prospectus delivery requirements of the Act,
(ii) the date on which such Note has been disposed of in accordance with a Shelf
Registration Statement (and the purchasers thereof have been issued Exchange
Notes), or (iii) the date on which such Note is distributed to the public
pursuant to Rule 144 under the Act and each (B) Exchange Note held by a Broker
Dealer until the date on which such Exchange Note is disposed of by a
Broker-Dealer pursuant to the "Plan of Distribution" contemplated by the
Exchange Offer Registration Statement (including the delivery of the Prospectus
included therein).
SECTION 2. HOLDERS
A Person is deemed to be a holder of Transfer Restricted Securities
(each, a "HOLDER") whenever such Person owns Transfer Restricted Securities.
SECTION 3. REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permitted by applicable law
or Commission policy (after the procedures set forth in Section 6(a)(i) below
have been complied with), the Company and the Guarantors shall (i) cause the
Exchange Offer Registration Statement to be filed with the Commission on or
prior to 60 days after the Closing Date (such 60th day being the "FILING
DEADLINE"), (ii) use its best efforts to cause such Exchange Offer Registration
Statement to become effective on or prior to 120 days after the Closing Date
(such 120th day being the "EFFECTIVENESS TARGET
<PAGE> 5
DATE"), (iii) in connection with the foregoing, (A) file all pre-effective
amendments to such Exchange Offer Registration Statement as may be necessary in
order to cause it to become effective, (B) file, if applicable, a post-effective
amendment to such Exchange Offer Registration Statement pursuant to Rule 430A
under the Act and (C) cause all necessary filings, if any, in connection with
the registration and qualification of the Exchange Notes to be made under the
Blue Sky laws of such jurisdictions as are necessary to permit Consummation of
the Exchange Offer, and (iv) upon the effectiveness of such Exchange Offer
Registration Statement, commence and Consummate the Exchange Offer. The Exchange
Offer shall be on the appropriate form permitting (i) registration of the
Exchange Notes to be offered in exchange for the Notes that are Transfer
Restricted Securities and (ii) resales of Exchange Notes by Broker-Dealers that
tendered into the Exchange Offer Notes that such Broker-Dealer acquired for its
own account as a result of market making activities or other trading activities
(other than Notes acquired directly from the Company or any of its Affiliates)
as contemplated by Section 3(c) below.
(b) The Company and the Guarantors shall use their respective best
efforts to cause the Exchange Offer Registration Statement to be effective
continuously, and shall keep the Exchange Offer open for a period of not less
than the minimum period required under applicable federal and state securities
laws to Consummate the Exchange Offer; PROVIDED, HOWEVER, that in no event shall
such period be less than 20 Business Days. The Company and the Guarantors shall
cause the Exchange Offer to comply with all applicable federal and state
securities laws. No securities other than the Exchange Notes shall be included
in the Exchange Offer Registration Statement. The Company and the Guarantors
shall use their respective best efforts to cause the Exchange Offer to be
Consummated on the earliest practicable date after the Exchange Offer
Registration Statement has become effective, but in no event later than 30
Business Days thereafter, unless required by the federal securities laws (such
30th day, or the earliest day thereafter on which the federal securities laws
permit Consummation of the Exchange Offer, being the "CONSUMMATION DEADLINE").
(c) The Company shall include a "PLAN OF DISTRIBUTION" section in the
Prospectus contained in the Exchange Offer Registration Statement and indicate
therein that any Broker-Dealer who holds Transfer Restricted Securities that
were acquired for the account of such Broker-Dealer as a result of market-making
activities or other trading activities (other than Notes acquired directly from
the Company or any Affiliate of the Company), may exchange such Transfer
Restricted Securities pursuant to the Exchange Offer. Such "Plan of
Distribution" section shall also contain all other information with respect to
such sales by such Broker-Dealers that the Commission may require in order to
permit such sales pursuant thereto, but such "Plan of Distribution" shall not
name any such Broker-Dealer or disclose the amount of Transfer Restricted
Securities held by any such Broker-Dealer, except to the extent required by the
Commission as a result of a change in policy, rules or regulations after the
date of
<PAGE> 6
this Agreement.
Because such Broker-Dealer may be deemed to be an "underwriter" within
the meaning of the Act and must, therefore, deliver a prospectus meeting the
requirements of the Act in connection with its initial sale of any Exchange
Notes received by such Broker-Dealer in the Exchange Offer, the Company and the
Guarantors shall permit the use of the Prospectus contained in the Exchange
Offer Registration Statement by such Broker-Dealer to satisfy such prospectus
delivery requirement. To the extent necessary to ensure that the prospectus
contained in the Exchange Offer Registration Statement is available for sales of
Exchange Notes by Broker-Dealers, the Company and the Guarantors agree to use
their respective best efforts to keep the Exchange Offer Registration Statement
continuously effective, supplemented, amended and current as required by and
subject to the provisions of Section 6(a) and (c) hereof and in conformity with
the requirements of this Agreement, the Act and the policies, rules and
regulations of the Commission as announced from time to time, for a period of
one year from the Consummation Deadline or such shorter period as will terminate
when all Transfer Restricted Securities covered by such Registration Statement
have been sold pursuant thereto. The Company and the Guarantors shall provide
sufficient copies of the latest version of such Prospectus to such
Broker-Dealers, promptly upon request, and in no event later than one day after
such request, at any time during such period.
SECTION 4. SHELF REGISTRATION
(a) SHELF REGISTRATION. If (i) the Exchange Offer is not permitted by
applicable law or Commission policy (after the Company and the Guarantors have
complied with the procedures set forth in Section 6(a)(i) below) or (ii) any
Holder of Transfer Restricted Securities shall notify the Company within 20 Days
following the Consummation Deadline that (A) such Holder was prohibited by
applicable law or Commission policy from participating in the Exchange Offer or
(B) such Holder may not resell the Exchange Notes acquired by it in the Exchange
Offer to the public without delivering a prospectus and the Prospectus contained
in the Exchange Offer Registration Statement is not appropriate or available for
such resales by such Holder or (C) such Holder is a Broker-Dealer and holds
Notes acquired directly from the Company or any of its Affiliates, then the
Company and the Guarantors shall:
(x) use their best efforts to file, on or prior to 30 days
after the earlier of (i) the date on which the Company determines that
the Exchange Offer Registration Statement cannot be filed as a result
of clause (a)(i) above and (ii) the date on which the Company receives
the notice specified in clause (a)(ii) above, (such earlier date, the
"FILING DEADLINE"), a shelf registration statement pursuant to Rule 415
under the Act (which may be an amendment to the Exchange Offer
Registration Statement (the "SHELF REGISTRATION STATEMENT")), relating
to all Transfer Restricted Securities, and
<PAGE> 7
(y) shall use their best efforts to cause such Shelf
Registration Statement to become effective on or prior to 90 days after
the Filing Deadline for the Shelf Registration Statement (such 90th day
being the "EFFECTIVENESS TARGET DATE").
If, after the Company has filed an Exchange Offer Registration
Statement that satisfies the requirements of Section 3(a) above, the Company is
required to file and make effective a Shelf Registration Statement solely
because the Exchange Offer is not permitted under applicable federal law or
Commission policy (i.e., clause (a)(i) above), then the filing of the Exchange
Offer Registration Statement shall be deemed to satisfy the requirements of
clause (x) above; PROVIDED that, in such event, the Company shall remain
obligated to meet the Effectiveness Target Date set forth in clause (y).
To the extent necessary to ensure that the Shelf Registration Statement
is available for sales of Transfer Restricted Securities by the Holders thereof
entitled to the benefit of this Section 4(a) and the other securities required
to be registered therein pursuant to Section 6(b)(ii) hereof, the Company and
the Guarantors shall use their respective best efforts to keep any Shelf
Registration Statement required by this Section 4(a) continuously effective,
supplemented, amended and current as required by and subject to the provisions
of Sections 6(b) and (c) hereof and in conformity with the requirements of this
Agreement, the Act and the policies, rules and regulations of the Commission as
announced from time to time, for a period of at least two years (as extended
pursuant to Section 6(c)(i)) following the Closing Date, or such shorter period
as will terminate when all Transfer Restricted Securities covered by such Shelf
Registration Statement have been sold pursuant thereto.
(b) PROVISION BY HOLDERS OF CERTAIN INFORMATION IN CONNECTION WITH THE
SHELF REGISTRATION STATEMENT. No Holder of Transfer Restricted Securities may
include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, within 20 days after receipt of a request therefor, the
information specified in Item 507 or 508 of Regulation S-K, as applicable, of
the Act for use in connection with any Shelf Registration Statement or
Prospectus or preliminary Prospectus included therein. No Holder of Transfer
Restricted Securities shall be entitled to liquidated damages pursuant to
Section 5 hereof unless and until such Holder shall have provided all such
information. Each selling Holder agrees promptly to furnish additional
information required to be disclosed in order to make the information previously
furnished to the Company by such Holder not materially misleading.
SECTION 5. LIQUIDATED DAMAGES
If (i) any Registration Statement required by this Agreement is not
filed with the Commission on or prior to the applicable Filing Deadline, (ii)
any such Registration
<PAGE> 8
Statement has not been declared effective by the Commission on or prior to the
applicable Effectiveness Target Date, (iii) the Exchange Offer has not been
Consummated on or prior to the Consummation Deadline or (iv) any Registration
Statement required by this Agreement is filed and declared effective but shall
thereafter cease to be effective or fail to be usable for its intended purpose
without being succeeded within 2 days by a post-effective amendment to such
Registration Statement that cures such failure and that is itself declared
effective within 5 days of filing such post-effective amendment to such
Registration Statement (each such event referred to in clauses (i) through (iv),
a "REGISTRATION DEFAULT"), then the Company and the Guarantors hereby jointly
and severally agree to pay to each Holder of Transfer Restricted Securities
affected thereby liquidated damages in an amount equal to $.05 per week per
$1,000 in principal amount of Transfer Restricted Securities held by such Holder
for each week or portion thereof that the Registration Default continues for the
first 90-day period immediately following the occurrence of such Registration
Default. The amount of the liquidated damages shall increase by an additional
$.05 per week per $1,000 in principal amount of Transfer Restricted Securities
with respect to each subsequent 90-day period until all Registration Defaults
have been cured, up to a maximum amount of liquidated damages of $.50 per week
per $1,000 in principal amount of Transfer Restricted Securities; PROVIDED that
the Company and the Guarantors shall in no event be required to pay liquidated
damages for more than one Registration Default at any given time.
Notwithstanding anything to the contrary set forth herein, (1) upon filing of
the Exchange Offer Registration Statement (or, if applicable, the Shelf
Registration Statement) after a Registration Default of the type specified in
clause (i) above, (2) upon the effectiveness of the Exchange Offer Registration
Statement (or, if applicable, the Shelf Registration Statement), after a
Registration Default of the type specified in clause (ii) above, (3) upon
Consummation of the Exchange Offer, after a Registration Default of the type
specified in clause (iii) above, or (4) upon the filing of a post-effective
amendment to the Registration Statement or an additional Registration Statement
that causes the Exchange Offer Registration Statement (or, if applicable, the
Shelf Registration Statement) again to be declared effective or made usable
after a Registration Default of the type specified in clause (iv) above, the
liquidated damages payable with respect to the Transfer Restricted Securities as
a result of such clause (i), (ii), (iii) or (iv), as applicable, shall cease.
All accrued liquidated damages shall be paid to the Holders entitled
thereto, in the manner provided for the payment of interest in the Indenture, on
each Interest Payment Date, as more fully set forth in the Indenture and the
Notes. Notwithstanding the fact that any securities for which liquidated damages
are due cease to be Transfer Restricted Securities, all obligations of the
Company and the Guarantors to pay liquidated damages with respect to securities
shall survive until such time as such obligations with respect to such
securities shall have been satisfied in full.
<PAGE> 9
SECTION 6. REGISTRATION PROCEDURES
(a) EXCHANGE OFFER REGISTRATION STATEMENT. In connection with the
Exchange Offer, the Company and the Guarantors shall (x) comply with all
applicable provisions of Section 6(c) below, (y) use their respective best
efforts to effect such exchange and to permit the resale of Exchange Notes by
Broker-Dealers that tendered in the Exchange Offer Notes that such Broker-
Dealer acquired for its own account as a result of its market making activities
or other trading activities (other than Notes acquired directly from the Company
or any of its Affiliates) being sold in accordance with the intended method or
methods of distribution thereof, and (z) comply with all of the following
provisions:
(i) If, following the date hereof, there has been announced a
change in Commission policy with respect to exchange offers such as the
Exchange Offer, that in the reasonable opinion of counsel to the
Company raises a substantial question as to whether the Exchange Offer
is permitted by applicable federal law, the Company and the Guarantors
hereby agree to seek an interpretation or other favorable decision from
the Commission allowing the Company and the Guarantors to Consummate an
Exchange Offer for such Transfer Restricted Securities. The Company and
the Guarantors hereby agree to pursue the issuance of such a decision
at the Commission staff level. In connection with the foregoing, the
Company and the Guarantors hereby agree to take all such other actions
as may be requested by the Commission or otherwise required in
connection with the issuance of such decision, including without
limitation (A) participating in telephonic conferences with the
Commission, (B) delivering to the Commission staff an analysis prepared
by counsel to the Company setting forth the legal bases, if any, upon
which such counsel has concluded that such an Exchange Offer should be
permitted and (C) diligently pursuing a resolution (which need not be
favorable) by the Commission staff.
(ii) As a condition to its participation in the Exchange
Offer, each Holder of Transfer Restricted Securities (including,
without limitation, any Holder who is a Broker-Dealer) shall furnish,
upon the request of the Company, prior to the Consummation of the
Exchange Offer, a written representation to the Company and the
Guarantors (which may be contained in the letter of transmittal
contemplated by the Exchange Offer Registration Statement) to the
effect that (A) it is not an Affiliate of the Company, (B) it is not
engaged in, and does not intend to engage in, and has no arrangement or
understanding with any person to participate in, a distribution of the
Exchange Notes to be issued in the Exchange Offer and (C) it is
acquiring the Exchange Notes in its ordinary course of business. As a
condition to its participation in the Exchange Offer, each Holder using
the Exchange Offer to participate in a distribution of the Exchange
Notes shall acknowledge and agree that, if the resales are of Exchange
Notes
<PAGE> 10
obtained by such Holder in exchange for Notes acquired directly from
the Company or an Affiliate thereof, it (1) could not, under Commission
policy as in effect on the date of this Agreement, rely on the position
of the Commission enunciated in MORGAN STANLEY AND CO., INC. (available
June 5, 1991) and EXXON CAPITAL HOLDINGS CORPORATION (available May 13,
1988), as interpreted in the Commission's letter to SHEARMAN &
STERLING.
(b) SHELF REGISTRATION STATEMENT.
In connection with the Shelf Registration Statement, the Company and
the Guarantors shall (w) comply with all the provisions of Section 6(c) below,
(x) prepare and file with the Commission a Registration Statement relating to
the registration on any appropriate form under the Act, which form shall be
available for the sale of the Transfer Restricted Securities within the time
periods and otherwise in accordance with the provisions hereof, (y) use their
respective best efforts to effect such registration to permit the sale of the
Transfer Restricted Securities being sold in accordance with the intended method
or methods of distribution thereof (as indicated in the information furnished to
the Company pursuant to Section 4(b) hereof), and (z) issue, upon the request of
any Holder or purchaser of Notes covered by any Shelf Registration Statement
contemplated by this Agreement, Exchange Notes having an aggregate principal
amount equal to the aggregate principal amount of Notes sold pursuant to the
Shelf Registration Statement and surrendered to the Company for cancellation;
the Company shall register Exchange Notes on the Shelf Registration Statement
for this purpose and issue the Exchange Notes to the purchaser(s) of securities
subject to the Shelf Registration Statement in such names as such purchaser(s)
shall designate.
(c) GENERAL PROVISIONS. In connection with any Registration Statement
and any related Prospectus required by this Agreement, the Company and the
Guarantors shall:
(i) use their respective best efforts to keep such
Registration Statement continuously effective and provide all requisite
financial statements for the period specified in Section 3 or 4 of this
Agreement, as applicable. Upon the occurrence of any event that would
cause any such Registration Statement or the Prospectus contained
therein (A) to contain an untrue statement of material fact or omit to
state any material fact necessary to make the statements therein not
misleading or (B) not to be effective and usable for resale of Transfer
Restricted Securities during the period required by this Agreement, the
Company and the Guarantors shall file promptly an appropriate amendment
to such Registration Statement curing such defect, and, if Commission
review is required, use their respective best efforts to cause such
amendment to be declared effective as soon as practicable.
<PAGE> 11
(ii) prepare and file with the Commission such amendments and
post-effective amendments to the applicable Registration Statement as
may be necessary to keep such Registration Statement effective for the
applicable period set forth in Section 3 or 4 hereof, as the case may
be; cause the Prospectus to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424
under the Act, and to comply fully with Rules 424, 430A and 462, as
applicable, under the Act in a timely manner; and comply with the
provisions of the Act with respect to the disposition of all securities
covered by such Registration Statement during the applicable period in
accordance with the intended method or methods of distribution by the
sellers thereof set forth in such Registration Statement or supplement
to the Prospectus;
(iii) advise each Holder promptly and, if requested by such
Holder, confirm such advice in writing, (A) when the Prospectus or any
Prospectus supplement or post-effective amendment has been filed, and,
with respect to any applicable Registration Statement or any
post-effective amendment thereto, when the same has become effective,
(B) of any request by the Commission for amendments to the Registration
Statement or amendments or supplements to the Prospectus or for
additional information relating thereto, (C) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement under the Act or of the suspension by any state
securities commission of the qualification of the Transfer Restricted
Securities for offering or sale in any jurisdiction, or the initiation
of any proceeding for any of the preceding purposes, (D) of the
existence of any fact or the happening of any event that makes any
statement of a material fact made in the Registration Statement, the
Prospectus, any amendment or supplement thereto or any document
incorporated by reference therein untrue, or that requires the making
of any additions to or changes in the Registration Statement in order
to make the statements therein not misleading, or that requires the
making of any additions to or changes in the Prospectus in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading. If at any time the Commission
shall issue any stop order suspending the effectiveness of the
Registration Statement, or any state securities commission or other
regulatory authority shall issue an order suspending the qualification
or exemption from qualification of the Transfer Restricted Securities
under state securities or Blue Sky laws, the Company and the Guarantors
shall use their respective best efforts to obtain the withdrawal or
lifting of such order at the earliest possible time;
(iv) subject to Section 6(c)(i), if any fact or event
contemplated by Section 6(c)(iii)(D) above shall exist or have
occurred, prepare a supplement or post-effective amendment to the
Registration Statement or related Prospectus or any document
incorporated therein by reference or file any other required
<PAGE> 12
document so that, as thereafter delivered to the purchasers of Transfer
Restricted Securities, the Prospectus will not contain an untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(v) furnish to each Holder in connection with such exchange or
sale, if any, before filing with the Commission, copies of any
Registration Statement or any Prospectus included therein or any
amendments or supplements to any such Registration Statement or
Prospectus (including all documents incorporated by reference after the
initial filing of such Registration Statement), which documents will be
subject to the review and comment of such Holders in connection with
such sale, if any, for a period of at least five Business Days, and the
Company will not file any such Registration Statement or Prospectus or
any amendment or supplement to any such Registration Statement or
Prospectus (including all such documents incorporated by reference) to
which such Holders shall reasonably object within five Business Days
after the receipt thereof. A Holder shall be deemed to have reasonably
objected to such filing if such Registration Statement, amendment,
Prospectus or supplement, as applicable, as proposed to be filed,
contains an untrue statement of a material fact or omits to state any
material fact necessary to make the statements therein not misleading
or fails to comply with the applicable requirements of the Act;
(vi) promptly prior to the filing of any document that is to
be incorporated by reference into a Registration Statement or
Prospectus, provide copies of such document to each Holder in
connection with such exchange or sale, if any, make the Company's and
the Guarantors' representatives available for discussion of such
document and other customary due diligence matters, and include such
information in such document prior to the filing thereof as such
Holders may reasonably request;
(vii) make available, at reasonable times, for inspection by
each Holder and any attorney or accountant retained by such Holders,
all financial and other records, pertinent corporate documents of the
Company and the Guarantors and cause the Company's and the Guarantors'
officers, directors and employees to supply all information reasonably
requested by any such Holder, attorney or accountant in connection with
such Registration Statement or any post-effective amendment thereto
subsequent to the filing thereof and prior to its effectiveness;
(viii) if requested by any Holders in connection with such
exchange or sale, promptly include in any Registration Statement or
Prospectus, pursuant to a supplement or post-effective amendment if
necessary, such information as such Holders may reasonably request to
have included therein, including,
<PAGE> 13
without limitation, information relating to the "Plan of Distribution"
of the Transfer Restricted Securities; and make all required filings of
such Prospectus supplement or post-effective amendment as soon as
practicable after the Company is notified of the matters to be included
in such Prospectus supplement or post-effective amendment;
(ix) furnish to each Holder in connection with such exchange
or sale, without charge, at least one copy of the Registration
Statement, as first filed with the Commission, and of each amendment
thereto, including all documents incorporated by reference therein and
all exhibits (including exhibits incorporated therein by reference);
(x) deliver to each Holder, without charge, as many copies of
the Prospectus (including each preliminary prospectus) and any
amendment or supplement thereto as such Persons reasonably may request;
the Company and the Guarantors hereby consent to the use (in accordance
with law) of the Prospectus and any amendment or supplement thereto by
each selling Holder in connection with the offering and the sale of the
Transfer Restricted Securities covered by the Prospectus or any
amendment or supplement thereto;
(xi) upon the request of any Holder, enter into such
agreements (including underwriting agreements) and make such
representations and warranties and take all such other actions in
connection therewith in order to expedite or facilitate the disposition
of the Transfer Restricted Securities pursuant to any applicable
Registration Statement contemplated by this Agreement as may be
reasonably requested by any Holder in connection with any sale or
resale pursuant to any applicable Registration Statement. In such
connection, the Company and the Guarantors shall:
(A) upon request of any Holder, furnish (or in the
case of paragraphs (2) and (3), use its best efforts to cause
to be furnished) to each Holder, upon Consummation of the
Exchange Offer or upon the effectiveness of the Shelf
Registration Statement, as the case may be:
(1) a certificate, dated such date, signed
on behalf of the Company and each Guarantor by (x)
the President or any Vice President and (y) a
principal financial or accounting officer of the
Company and such Guarantor, confirming, as of the
date thereof, the matters set forth in Section 5(e)
of the Purchase Agreement and such other similar
matters as such Holders may reasonably request;
(2) an opinion, dated the date of
Consummation of the Exchange Offer or the date of
effectiveness of the Shelf
<PAGE> 14
Registration Statement, as the case may be, of
counsel for the Company and the Guarantors covering
matters similar to those set forth in Exhibit A to
the Purchase Agreement and such other matters as such
Holder may reasonably request, and in any event
including a statement to the effect that such counsel
has participated in conferences with officers and
other representatives of the Company and the
Guarantors, representatives of the independent public
accountants for the Company and the Guarantors and
have considered the matters required to be stated
therein and the statements contained therein,
although such counsel has not independently verified
the accuracy, completeness or fairness of such
statements; and that such counsel advises that, on
the basis of the foregoing, no facts came to such
counsel's attention that caused such counsel to
believe that the applicable Registration Statement,
at the time such Registration Statement or any
post-effective amendment thereto became effective
and, in the case of the Exchange Offer Registration
Statement, as of the date of Consummation of the
Exchange Offer, contained an untrue statement of a
material fact or omitted to state a material fact
required to be stated therein or necessary to make
the statements therein not misleading, or that the
Prospectus contained in such Registration Statement
as of its date and, in the case of the opinion dated
the date of Consummation of the Exchange Offer, as of
the date of Consummation, contained an untrue
statement of a material fact or omitted to state a
material fact necessary in order to make the
statements therein, in the light of the circumstances
under which they were made, not misleading. Without
limiting the foregoing, such counsel may state
further that such counsel assumes no responsibility
for, and has not independently verified, the
accuracy, completeness or fairness of the financial
statements, notes and schedules and other financial
data included in any Registration Statement
contemplated by this Agreement or the related
Prospectus; and
(3) a customary comfort letter, dated the
date of Consummation of the Exchange Offer, or as of
the date of effectiveness of the Shelf Registration
Statement, as the case may be, from the Company's
independent accountants, in the customary form and
covering matters of the type customarily covered in
comfort letters to underwriters in connection
with underwritten offerings, and affirming the
matters set forth in the comfort letters delivered
pursuant to Sections 5(a) and 5(f) of the Purchase
Agreement; and
<PAGE> 15
(B) deliver such other documents and certificates as
may be reasonably requested by the selling Holders to evidence
compliance with the matters covered in sub-clause (A) above
and with any customary conditions contained in any agreement
entered into by the Company and the Guarantors pursuant to
this clause (xi);
(xii) prior to any public offering of Transfer Restricted
Securities, cooperate with the selling Holders and their counsel in
connection with the registration and qualification of the Transfer
Restricted Securities under the securities or Blue Sky laws of such
jurisdictions as the selling Holders may request and do any and all
other acts or things necessary or advisable to enable the disposition
in such jurisdictions of the Transfer Restricted Securities covered by
the applicable Registration Statement; PROVIDED, HOWEVER, that neither
the Company nor any Guarantor shall be required to register or qualify
as a foreign corporation where it is not now so qualified or to take
any action that would subject it to the service of process in suits or
to taxation, other than as to matters and transactions relating to the
Registration Statement, in any jurisdiction where it is not now so
subject;
(xiii) in connection with any sale of Transfer Restricted
Securities that will result in such securities no longer being Transfer
Restricted Securities, cooperate with the Holders to facilitate the
timely preparation and delivery of certificates representing Transfer
Restricted Securities to be sold and not bearing any restrictive
legends; and to register such Transfer Restricted Securities in such
denominations and such names as the selling Holders may request at
least two Business Days prior to such sale of Transfer Restricted
Securities;
(xiv) use their respective best efforts to cause the
disposition of the Transfer Restricted Securities covered by the
Registration Statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the
seller or sellers thereof to consummate the disposition of such
Transfer Restricted Securities, subject to the proviso contained in
clause (xii) above;
(xv) provide a CUSIP number for all Transfer Restricted
Securities not later than the effective date of a Registration
Statement covering such Transfer Restricted Securities and provide the
Trustee under the Indenture with printed certificates for the Transfer
Restricted Securities which are in a form eligible for deposit with the
Depository Trust Company;
(xvi) otherwise use their respective best efforts to comply
with all applicable rules and regulations of the Commission, and make
generally available to its security holders with regard to any
applicable Registration
<PAGE> 16
Statement, as soon as practicable, a consolidated earnings statement
meeting the requirements of Rule 158 (which need not be audited)
covering a twelve-month period beginning after the effective date of
the Registration Statement (as such term is defined in paragraph (c) of
Rule 158 under the Act);
(xvii) cause the Indenture to be qualified under the TIA not
later than the effective date of the first Registration Statement
required by this Agreement and, in connection therewith, cooperate with
the Trustee and the Holders to effect such changes to the Indenture as
may be required for such Indenture to be so qualified in accordance
with the terms of the TIA; and execute, and use its best efforts to
cause the Trustee to execute, all documents that may be required to
effect such changes and all other forms and documents required to be
filed with the Commission to enable such Indenture to be so qualified
in a timely manner; and
(xviii) provide promptly to each Holder, upon request, each
document filed with the Commission pursuant to the requirements of
Section 13 or Section 15(d) of the Exchange Act.
(d) RESTRICTIONS ON HOLDERS. Each Holder agrees by acquisition of a
Transfer Restricted Security that, upon receipt of the notice referred to in
Section 6(c)(iii)(C) or any notice from the Company of the existence of any fact
of the kind described in Section 6(c)(iii)(D) hereof (in each case, a
"SUSPENSION NOTICE"), such Holder will forthwith discontinue disposition of
Transfer Restricted Securities pursuant to the applicable Registration Statement
until (i) such Holder has received copies of the supplemented or amended
Prospectus contemplated by Section 6(c)(iv) hereof, or (ii) such Holder is
advised in writing by the Company that the use of the Prospectus may be resumed,
and has received copies of any additional or supplemental filings that are
incorporated by reference in the Prospectus (in each case, the "RECOMMENCEMENT
DATE"). Each Holder receiving a Suspension Notice hereby agrees that it will
either (i) destroy any Prospectuses, other than permanent file copies, then in
such Holder's possession which have been replaced by the Company with more
recently dated Prospectuses or (ii) deliver to the Company (at the Company's
expense) all copies, other than permanent file copies, then in such Holder's
possession of the Prospectus covering such Transfer Restricted Securities that
was current at the time of receipt of the Suspension Notice. The time period
regarding the effectiveness of such Registration Statement set forth in Section
3 or 4 hereof, as applicable, shall be extended by a number of days equal to the
number of days in the period from and including the date of delivery of the
Suspension Notice to the date of delivery of the Recommencement Date.
SECTION 7. REGISTRATION EXPENSES
(a) All costs, fees and expenses incident to the Company's and the
<PAGE> 17
Guarantors' performance of or compliance with this Agreement will be borne by
the Company, regardless of whether a Registration Statement becomes effective,
including without limitation: (i) all registration and filing fees and expenses;
(ii) all fees and expenses of compliance with federal securities and state Blue
Sky or securities laws; (iii) all expenses of printing (including printing
certificates for the Exchange Notes to be issued in the Exchange Offer and
printing of Prospectuses), messenger and delivery services and telephone; (iv)
all fees and disbursements of counsel for the Company, the Guarantors and the
Holders of Transfer Restricted Securities; (v) all application and filing fees
in connection with listing the Exchange Notes on a national securities exchange
or automated quotation system pursuant to the requirements hereof; (vi) all fees
and disbursements of independent certified public accountants of the Company and
the Guarantors (including the expenses of any special audit and comfort letters
required by or incident to such performance) and (vii) such other costs, fees
and expenses of a nature described in the first sentence of Section 4 of the
Purchase Agreement.
The Company will, in any event, bear its and the Guarantors' internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expenses of
any annual audit and the fees and expenses of any Person, including special
experts, retained by the Company or the Guarantors.
(b) In connection with any Registration Statement required by this
Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Company and the Guarantors
will reimburse the Initial Purchasers and the Holders of Transfer Restricted
Securities who are tendering Notes in the Exchange Offer or selling or reselling
Notes or Exchange Notes pursuant to the "Plan of Distribution" contained in the
Exchange Offer Registration Statement or the Shelf Registration Statement, as
applicable, for the reasonable fees and disbursements of not more than one
counsel, who shall be Shearman & Sterling, unless another firm shall be chosen
by the Holders of a majority in principal amount of the Transfer Restricted
Securities for whose benefit such Registration Statement is being prepared.
SECTION 8. INDEMNIFICATION
(a) The Company and the Guarantors agree, jointly and severally, to
indemnify and hold harmless each Holder and each Person, if any, who controls
such Holder (within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act), from and against any and all losses, claims, damages,
liabilities, judgments, (including without limitation, any legal or other
expenses incurred in connection with investigating or defending any matter,
including any action that could give rise to any such losses, claims, damages,
liabilities or judgments) caused by any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement,
preliminary prospectus or Prospectus (or any amendment or supplement thereto)
provided by the
<PAGE> 18
Company to any Holder or any prospective purchaser of Exchange Notes or
registered Notes, or caused by any omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or judgments are caused by an untrue statement or omission
or alleged untrue statement or omission that is based upon information relating
to any of the Holders furnished in writing to the Company by any of the Holders.
(b) Each Holder of Transfer Restricted agrees, severally and not
jointly, to indemnify and hold harmless the Company and the Guarantors and each
person, if any, who controls (within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act) the Company or the Guarantors to the same extent
as the foregoing indemnity from the Company and the Guarantors set forth in
Section 8(a) above, but only with reference to information relating to such
Holder furnished in writing to the Company by such Holder expressly for use in
any Registration Statement. In no event shall any Holder or any Person who
controls such Holder be liable or responsible for any amount in excess of the
amount received by such Holder with respect to its sale of Transfer Restricted
Securities pursuant to a Registration Statement.
(c) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 8(a) or 8(b) (the
"INDEMNIFIED PARTY"), the indemnified party shall promptly notify the person
against whom such indemnity may be sought (the "INDEMNIFYING PERSON") in writing
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all fees and expenses of such counsel, as incurred (except that
in the case of any action in respect of which indemnity may be sought pursuant
to both Sections 8(a) and 8(b), a Holder shall not be required to assume the
defense of such action pursuant to this Section 8(c), but may employ separate
counsel and participate in the defense thereof, but the fees and expenses of
such counsel, except as provided below, shall be at the expense of the Holder).
Any indemnified party shall have the right to employ separate counsel in any
such action and participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of the indemnified party unless (i) the
employment of such counsel shall have been specifically authorized in writing by
the indemnifying party, (ii) the indemnifying party shall have failed to assume
the defense of such action or employ counsel reasonably satisfactory to the
indemnified party or (iii) the named parties to any such action (including any
impleaded parties) include both the indemnified party and the indemnifying
party, and the indemnified party shall have been advised by such counsel that
there may be one or more legal defenses available to it which are different from
or additional to those available to the indemnifying party (in which case the
indemnifying party shall not have the right to assume the defense of such action
on behalf of the indemnified party). In any such case, the indemnifying party
shall not, in connection with any one action or separate but substantially
similar or
<PAGE> 19
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the fees and expenses of more than
one separate firm of attorneys (in addition to any local counsel) for all
indemnified parties and all such fees and expenses shall be reimbursed as they
are incurred. Such firm shall be designated in writing by a majority of the
Holders, in the case of the parties indemnified pursuant to Section 8(a), and by
the Company and Guarantors, in the case of parties indemnified pursuant to
Section 8(b). The indemnifying party shall indemnify and hold harmless the
indemnified party from and against any and all losses, claims, damages,
liabilities and judgments by reason of any settlement of any action (i) effected
with its written consent or (ii) effected without its written consent if the
settlement is entered into more than twenty business days after the indemnifying
party shall have received a request from the indemnified party for reimbursement
for the fees and expenses of counsel (in any case where such fees and expenses
are at the expense of the indemnifying party) and, prior to the date of such
settlement, the indemnifying party shall have failed to comply with such
reimbursement request. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement or compromise of, or
consent to the entry of judgment with respect to, any pending or threatened
action in respect of which the indemnified party is or could have been a party
and indemnity or contribution may be or could have been sought hereunder by the
indemnified party, unless such settlement, compromise or judgment (i) includes
an unconditional release of the indemnified party from all liability on claims
that are or could have been the subject matter of such action and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of the indemnified party.
(d) To the extent that the indemnification provided for in this Section
8 is unavailable to an indemnified party in respect of any losses, claims,
damages, liabilities or judgments referred to therein, then each indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities or judgments (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Guarantors, on the one hand, and each Holder, on the other hand, from the sale
of Transfer Restricted Securities or (ii) if the allocation provided by clause
8(d)(i) is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause 8(d)(i) above
but also the relative fault of the Company and the Guarantors, on the one hand,
and of each Holder, on the other hand, in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
judgments, as well as any other relevant equitable considerations. The relative
fault of the Company and the Guarantors, on the one hand, and of each Holder, on
the other hand, shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company or a Guarantor, on the one hand, or by a Holder, on the other hand, and
the parties' relative intent, knowledge, access to information and opportunity
to
<PAGE> 20
correct or prevent such statement or omission. The amount paid or payable by a
party as a result of the losses, claims, damages, liabilities and judgments
referred to above shall be deemed to include, subject to the limitations set
forth in the second paragraph of Section 8(a), any legal or other fees or
expenses reasonably incurred by such party in connection with investigating or
defending any action or claim.
The Company, the Guarantors and each Holder agree that it would not be
just and equitable if contribution pursuant to this Section 8(d) were determined
by pro rata allocation (even if the Holders were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any matter, including any
action that could have given rise to such losses, claims, damages, liabilities
or judgments. Notwithstanding the provisions of this Section 8, no Holder, its
directors, its officers or any Person, if any, who controls such Holder shall be
required to contribute, in the aggregate, any amount in excess of the amount by
which the total received by such Holder with respect to the sale of Transfer
Restricted Securities pursuant to a Registration Statement exceeds (i) the
amount paid by such Holder for such Transfer Restricted Securities and (ii) the
amount of any damages which such Holder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Holders'
obligations to contribute pursuant to this Section 8(c) are several in
proportion to the respective principal amount of Transfer Restricted Securities
held by each Holder hereunder and not joint.
SECTION 9. RULE 144A AND RULE 144
The Company and each Guarantor agrees with each Holder, for so long as
any Transfer Restricted Securities remain outstanding and during any period in
which the Company or such Guarantor (i) is not subject to Section 13 or 15(d) of
the Exchange Act, to make available, upon request of any Holder, to such Holder
or beneficial owner of Transfer Restricted Securities in connection with any
sale thereof, and to any prospective purchaser of such Transfer Restricted
Securities designated by such Holder or beneficial owner, the information
required by Rule 144A(d)(4) under the Act in order to permit resales of such
Transfer Restricted Securities pursuant to Rule 144A, and (ii) is subject to
Section 13 or 15(d) of the Exchange Act, to make all filings required thereby
in a timely manner in order to permit resales of such Transfer Restricted
Securities pursuant to Rule 144.
<PAGE> 21
SECTION 10. MISCELLANEOUS
(a) REMEDIES. The Company and the Guarantors acknowledge and agree that
any failure by the Company or the Guarantors to comply with their respective
obligations under Sections 3 and 4 hereof may result in material irreparable
injury to the Initial Purchasers or the Holders for which there is no adequate
remedy at law, that it will not be possible to measure damages for such injuries
precisely and that, in the event of any such failure, the Initial Purchasers or
any Holder may obtain such relief as may be required to specifically enforce the
Company's and the Guarantors' obligations under Sections 3 and 4 hereof. The
Company and the Guarantors further agree to waive the defense in any action for
specific performance that a remedy at law would be adequate.
(b) NO INCONSISTENT AGREEMENTS. Neither the Company nor any Guarantor
will, on or after the date of this Agreement, enter into any agreement with
respect to its securities that is inconsistent with the rights granted to the
Holders in this Agreement or otherwise conflicts with the provisions hereof.
Neither the Company nor any Guarantor has previously entered into any agreement
granting any registration rights with respect to its securities to any Person.
The rights granted to the Holders hereunder do not in any way conflict with and
are not inconsistent with the rights granted to the holders of the Company's and
the Guarantors' securities under any agreement in effect on the date hereof.
(c) AMENDMENTS AND WAIVERS. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to or departures from
the provisions hereof may not be given unless (i) in the case of Section 5
hereof and this Section 10(c)(i), the Company has obtained the written consent
of Holders of all outstanding Transfer Restricted Securities and (ii) in the
case of all other provisions hereof, the Company has obtained the written
consent of Holders of a majority of the outstanding principal amount of Transfer
Restricted Securities (excluding Transfer Restricted Securities held by the
Company or its Affiliates). Notwithstanding the foregoing, a waiver or consent
to departure from the provisions hereof that relates exclusively to the rights
of Holders whose Transfer Restricted Securities are being tendered pursuant to
the Exchange Offer, and that does not affect directly or indirectly the rights
of other Holders whose Transfer Restricted Securities are not being tendered
pursuant to such Exchange Offer, may be given by the Holders of a majority of
the outstanding principal amount of Transfer Restricted Securities subject to
such Exchange Offer.
(d) THIRD PARTY BENEFICIARY. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Company and the
Guarantors, on the one hand, and the Initial Purchasers, on the other hand, and
shall have the right to enforce such agreements directly to the extent they may
deem such enforcement necessary or advisable to protect their rights hereunder.
<PAGE> 22
(e) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:
(1) if to a Holder, at the address set forth on the records of
the Registrar under the Indenture, with a copy to the Registrar under
the Indenture; and
(2) if to the Company or the Guarantors:
Florida Panthers Holdings, Inc.
450 East Las Olas Boulevard
Suite 1400
Ft. Lauderdale, FL 33301
Telecopier No.: (954) 627-5076
Attention: Richard L. Handley
With a copy to:
Akerman, Senterfitt & Eidson, P.A.
SunTrust International Center
One Southeast Third Avenue
28th Floor
Miami, FL 33131
Telecopier No. (305) 374-5095
Attention: Stephen K. Roddenberry
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if telecopied; and on the next business day, if timely delivered
to an air courier guaranteeing overnight delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
(f) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit
of
<PAGE> 23
and be binding upon the successors and assigns of each of the parties, including
without limitation and without the need for an express assignment, subsequent
Holders; PROVIDED, that nothing herein shall be deemed to permit any assignment,
transfer or other disposition of Transfer Restricted Securities in violation of
the terms hereof or of the Purchase Agreement or the Indenture. If any
transferee of any Holder shall acquire Transfer Restricted Securities in any
manner, whether by operation of law or otherwise, such Transfer Restricted
Securities shall be held subject to all of the terms of this Agreement, and by
taking and holding such Transfer Restricted Securities such Person shall be
conclusively deemed to have agreed to be bound by and to perform all of the
terms and provisions of this Agreement, including the restrictions on resale set
forth in this Agreement and, if applicable, the Purchase Agreement, and such
Person shall be entitled to receive the benefits hereof.
(g) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(j) SEVERABILITY. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(k) ENTIRE AGREEMENT. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted with respect to the Transfer
Restricted Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 24
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
FLORIDA PANTHERS HOLDINGS, INC.
By: /s/ William M. Pierce
------------------------------
Name: William M. Pierce
Title: Senior Vice President
2301 SE 17TH ST, INC.
ARENA DEVELOPMENT COMPANY, INC.
ARENA OPERATING COMPANY, INC.
BOCA BY DESIGN, INC.
BOCA RATON CATERERS, INC.
BOCA RATON RESORT AND CLUB, INC.
COYOTE HOLDINGS, INC.
DECOMA INVESTMENT, INC. I
DECOMA INVESTMENT, INC. II
FLORIDA GOLF MANAGEMENT, INC.
FLORIDA HOSPITALITY SERVICES, INC.
FLORIDA PANTHERS HOCKEY CLUB, INC.
FLORIDA PANTHERS HOTEL CORPORATION
FLORIDA PANTHERS ICE VENTURES, INC.
FLORIDA PANTHERS NAPLES, INC.
FPH MANAGEMENT, INC.
FPH/RHI MERGER CORP., INC.
MIZNER CENTER, INC.
PANTHERS AHL HOCKEY CORP.
PANTHERS BOCA GENERAL PARTNER, INC.
PANTHERS BOCA LIMITED PARTNER, INC.
PANTHERS BRGP CORPORATION
PANTHERS BRHC MANAGEMENT
CORPORATION
PANTHERS BRLP CORPORATION
PANTHERS EDGEWATER RESORT, INC.
PANTHERS GREY OAKS, INC.
PANTHERS PLANTATION GOLF, INC.
RAHN BAHIA, INC.
<PAGE> 25
RAHN BAHIA MAR, INC.
RAHN BAHIA MAR MGMT., INC.
RAHN PIER, INC.
RAHN PIER MGT., INC.
RESORTHILL, INC.
WRIGHT-BILT CORP.
Each by its authorized officer:
/s/ William M. Pierce
------------------------------------------
Name: William M. Pierce
Title: Vice President
DESERT JEWEL DESTINATIONS, L.L.C.
By: BILTMORE HOTEL PARTNERS,
L.L.L.P., managing member
By: WRIGHT-BILT CORP., general
partner
By: /s/ William M. Pierce
---------------------------------------
Name: William M. Pierce
Title: Vice President
PER, L.L.C.
By: PANTHERS EDGEWATER RESORT,
INC., managing member
By: /s/ William M. Pierce
----------------------------------------
Name: William M. Pierce
Title: Vice President
<PAGE> 26
2301 MGT., LTD.
By: 2301 SE 17TH ST, INC., general partner
By: /s/ William M. Pierce
---------------------------------------
Name: William M. Pierce
Title: Vice President
2301 SE 17TH ST., LTD.
By: 2301 MGT., LTD., general partner
By: 2301 SE 17TH ST, INC., general
partner
By: /s/ William M. Pierce
---------------------------------------
Name: William M. Pierce
Title: Vice President
ARENA DEVELOPMENT COMPANY, LTD.
By: ARENA DEVELOPMENT
COMPANY, INC., general partner
By: /s/ William M. Pierce
---------------------------------------
Name: William M. Pierce
Title: Vice President
<PAGE> 27
ARENA OPERATING COMPANY, LTD.
By: ARENA OPERATING COMPANY,
INC., general partner
By: /s/ William M. Pierce
---------------------------------------
Name: William M. Pierce
Title: Vice President
FLORIDA PANTHERS HOCKEY CLUB, LTD.
By: FLORIDA PANTHERS HOCKEY
CLUB, INC., general partner
By: /s/ William M. Pierce
---------------------------------------
Name: William M. Pierce
Title: Vice President
LEHILL PARTNERS L.P.
By: PELICAN HILL ASSOCIATES, L.P.,
general partner
By: RESORTHILL, INC., general
partner
By: /s/ William M. Pierce
---------------------------------------
Name: William M. Pierce
Title: Vice President
<PAGE> 28
PANTHERS BRHC LIMITED
By: PANTHERS BRGP CORPORATION,
general partner
By: /s/ William M. Pierce
---------------------------------------
Name: William M. Pierce
Title: Vice President
PANTHERS RPN LIMITED
By: PANTHERS EDGEWATER RESORT,
INC., general partner
By: /s/ William M. Pierce
---------------------------------------
Name: William M. Pierce
Title: Vice President
PELICAN HILL ASSOCIATES, L.P.
By: RESORTHILL, INC., general partner
By: /s/ William M. Pierce
---------------------------------------
Name: William M. Pierce
Title: Vice President
RAHN BAHIA MAR, G.P., LTD.
By: RAHN BAHIA MAR, INC., general
partner
By: /s/ William M. Pierce
---------------------------------------
Name: William M. Pierce
Title: Vice President
<PAGE> 29
RAHN BAHIA MAR, LTD.
By: RAHN BAHIA MAR, G.P., LTD.,
general partner
By: RAHN BAHIA MAR, INC.,
general partner
By: /s/ William M. Pierce
-------------------------------
Name: William M. Pierce
Title: Vice President
BILTMORE HOTEL PARTNERS, L.L.L.P.
By: WRIGHT-BILT CORP., general partner
By: /s/ William M. Pierce
--------------------------------
Name: William M. Pierce
Title: Vice President
<PAGE> 30
BEAR, STEARNS & CO. INC.
By: /s/ John Kilgallon
------------------------------------
Name: John Kilgallon
Title: Senior Managing Director
BT ALEX. BROWN INCORPORATED
By: /s/ John Mehlman
------------------------------------
Name: John Mehlman
Title: Principal
ALLEN & COMPANY INCORPORATED
By: /s/ John Simon
------------------------------------
Name: John Simon
Title: Managing Director
JEFFERIES & COMPANY, INC.
By: /s/ David St. Jean
------------------------------------
Name: David St. Jean
Title: Managing Director
RAYMOND JAMES & ASSOCIATES, INC.
By: /s/ John Blackmon
------------------------------------
Name: John Blackmon
Title: Senior Vice President
<PAGE> 1
EXHIBIT 4.5
$146,000,000
CREDIT AGREEMENT
Dated as of April 21, 1999
Among
FLORIDA PANTHERS HOTEL CORPORATION,
AS BORROWER,
THE INITIAL LENDERS NAMED HEREIN,
BEAR, STEARNS & CO. INC.,
as SYNDICATION AGENT
and
BANKERS TRUST COMPANY,
as ADMINISTRATIVE AGENT
<PAGE> 2
T A B L E O F C O N T E N T S
<TABLE>
<CAPTION>
SECTION PAGE
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
<S> <C> <C>
1.01. Certain Defined Terms.............................................................................1
1.02. Computation of Time Periods; Other Definitional Provisions.......................................22
1.03. Accounting Terms.................................................................................22
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
2.01. The Advances.....................................................................................22
2.02. Making the Advances..............................................................................22
2.03. Repayment of Advances............................................................................23
2.04. Termination or Reduction of the Commitments......................................................23
2.05. Prepayments......................................................................................24
2.06. Interest.........................................................................................24
2.07. Fees.............................................................................................25
2.08. Conversion of Advances...........................................................................25
2.09. Increased Costs, Etc.............................................................................26
2.10. Payments and Computations........................................................................27
2.11. Taxes............................................................................................28
2.12. Sharing of Payments, Etc.........................................................................30
2.13. Use of Proceeds..................................................................................31
2.14. Evidence of Debt.................................................................................31
2.15. Cash Management..................................................................................32
ARTICLE III
CONDITIONS OF LENDING
3.01. Conditions Precedent to Closing Date.............................................................33
3.02. Conditions Precedent to Each Borrowing...........................................................39
3.03. Determinations Under Section 3.01................................................................39
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.01. Representations and Warranties of the Borrower...................................................40
ARTICLE V
COVENANTS
5.01. Affirmative Covenants............................................................................48
5.02. Negative Covenants...............................................................................52
5.03. Borrower Reporting Requirements..................................................................59
5.04 Parent Guarantor Reporting Requirements..........................................................62
5.05. Parent Guarantor Covenants.......................................................................63
ARTICLE VI
EVENTS OF DEFAULT
6.01. Events of Default................................................................................63
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
ARTICLE VII
THE AGENTS
<S> <C> <C>
7.01. Authorization and Action.........................................................................66
7.02. Agent's Reliance, Etc............................................................................67
7.03. BT Co., Bear Stearns and Affiliates..............................................................67
7.04. Lender Party Credit Decision.....................................................................68
7.05. Indemnification..................................................................................68
7.06. Successor Administrative Agents..................................................................69
7.07. Syndication Agent................................................................................69
7.08. Collateral Documents: Secured Party Action.......................................................69
7.09. Certain Actions after an Event of Default........................................................70
ARTICLE VIII
MISCELLANEOUS
8.01. Amendments, Etc..................................................................................71
8.02. Notices, Etc.....................................................................................71
8.03. No Waiver; Remedies..............................................................................72
8.04. Costs and Expenses...............................................................................72
8.05. Right of Set-off.................................................................................75
8.06. Binding Effect...................................................................................75
8.07. Assignments and Participations...................................................................75
8.08. Execution in Counterparts........................................................................78
8.09. Jurisdiction, Etc................................................................................78
8.10. Governing Law....................................................................................78
8.11. Waiver of Jury Trial.............................................................................78
</TABLE>
<PAGE> 4
CREDIT AGREEMENT
CREDIT AGREEMENT dated as of April 21, 1999 among Florida Panthers
Hotel Corporation, a Delaware corporation (the "BORROWER"), the banks,
financial institutions and other institutional lenders listed on the signature
pages hereof as the Initial Lenders (the "INITIAL LENDERS"), Bear, Stearns &
Co. Inc. ("BEAR STEARNS"), as syndication agent (the "SYNDICATION AGENT") and
Bankers Trust Company ("BT CO."), as administrative agent (together with any
successors appointed pursuant to Article VII, the "ADMINISTRATIVE AGENT" and,
together with the Syndication Agent, the "AGENTS") for the Lender Parties (as
hereinafter defined).
PRELIMINARY STATEMENTS:
(1) The Borrower is a wholly-owned Subsidiary of Florida Panthers
Holdings, Inc., a Delaware corporation (the "PARENT GUARANTOR") and the
indirect owner of all of the Borrowing Base Properties (as hereinafter
defined).
(2) The Borrower has requested that the Lender Parties (as hereinafter
defined) lend to the Borrower up to $146,000,000 to finance capital
improvements, repayment of existing indebtedness, acquisitions of first class,
full service hotels, and to provide working capital for the Borrower, the
Subsidiary Guarantors or the Parent Guarantor.
(3) The Lender Parties have indicated their willingness to agree to
lend such amounts on the terms and conditions of this Agreement.
(4) The Borrower has requested that the Lender Parties purchase that
certain existing Term Note of the Parent Guarantor to the order of The Chase
Manhattan Bank, the obligations of the borrower under which have been assumed
by the Borrower and which reflects a current outstanding principal balance of
$146,000,000. The Lender Parties are willing to do so on the condition that,
immediately thereafter, the Notes herein contemplated are substituted for said
Term Note and the principal amount outstanding thereunder is immediately
reduced to $24,900,000.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto hereby agree as
follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. CERTAIN DEFINED TERMS. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"ADJUSTED EBITDA" means, with respect to any Person, for any
Rolling Period and as at any
<PAGE> 5
date of determination, the sum of EBITDA for such Person for such
Rolling Period, PLUS the increase or MINUS the decrease in the amount
of deferred Premier Club membership fees reflected as a component of
deferred revenue on the balance sheet of such Person at the beginning
and end of such Rolling Period PLUS the decrease or MINUS the increase
in Premier Club notes receivable reflected on such balance sheet
(without taking into account any write-offs related to such amounts)
less all expenses during such Rolling Period in connection with such
Premier Club operations (which were not otherwise included in
computing net income for such Rolling Period).
"ADVANCE" has the meaning specified in Section 2.01.
"ADMINISTRATIVE AGENT" has the meaning specified in the
recital of parties to this Agreement.
"ADMINISTRATIVE AGENT'S ACCOUNT" means the account of the
Administrative Agent maintained by the Administrative Agent at the
Federal Reserve Bank of New York, 33 Liberty Street, New York, New
York 10048, ABA No. 021 001 033, for further credit to Account No. 99
401268, Commercial Loan Division, or such other account maintained by
the Administrative Agent and designated by the Administrative Agent in
a written notice to the Lender Parties and the Borrower.
"AFFILIATE" means, as to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under common
control with such Person or is a director or officer of such Person.
For purposes of this definition, the term "control" (including the
terms "controlling", "controlled by" and "under common control with")
of a Person means the possession, direct or indirect, of the power to
vote 10% or more of the Voting Interests of such Person or to direct
or cause the direction of the management and policies of such Person,
whether through the ownership of Voting Interests, by contract or
otherwise.
"AGENTs" has the meaning specified in the recital of parties
to this Agreement.
"AGREEMENT VALUE" means, for each Hedge Agreement, on any
date of determination, an amount equal to: (a) in the case of a Hedge
Agreement documented pursuant to the Master Agreement
(Multicurrency-Cross Border) published by the International Swap and
Derivatives Association, Inc. (the "MASTER AGREEMENT"), the amount, if
any, that would be payable by any Loan Party or any of its
Subsidiaries to its counterparty to such Hedge Agreement, as if (i)
such Hedge Agreement was being terminated early on such date of
determination, (ii) such Loan Party or Subsidiary was the sole
"Affected Party", and (iii) respective counterparty to such hedge
agreement was the sole party determining such payment amount (with the
respective counterparty to such hedge agreement making such
determination pursuant to the provisions of the form of Master
Agreement); or (b) in the case of a Hedge Agreement traded on an
exchange, the mark-to-market value of such Hedge Agreement, which will
be the unrealized loss on such Hedge Agreement to the Loan Party or
Subsidiary of a Loan Party party to such Hedge Agreement determined by
the respective counterparty to such hedge agreement based on the
settlement price of such Hedge Agreement on such date of
determination, or (c) in all other cases, the mark-to-market value of
such Hedge Agreement, which will be the unrealized loss on such Hedge
Agreement to the Loan Party or Subsidiary of a Loan Party party to
such Hedge Agreement determined by the respective counterparty to such
hedge agreement as the amount, if any,
2
<PAGE> 6
by which (i) the present value of the future cash flows to be paid by
such Loan Party or Subsidiary exceeds (ii) the present value of the
future cash flows to be received by such Loan Party or Subsidiary
pursuant to such Hedge Agreement; capitalized terms used and not
otherwise defined in this definition shall have the respective
meanings set forth in the above described Master Agreement.
"ANNUALIZATION FACTOR" means a fraction the numerator of
which is the number 365 and the denominator of which is the number of
days following the date of the initial Borrowing.
"APPLICABLE LENDING OFFICE" means, with respect to each
Lender Party, such Lender Party's Domestic Lending Office in the case
of a Base Rate Advance and such Lender Party's Eurodollar Lending
Office in the case of a Eurodollar Rate Advance.
"APPLICABLE MARGIN" means, for Base Rate Borrowings, 1% per
annum, and, for Eurodollar Rate Borrowings, 3% per annum.
"APPRAISED VALUE" means the fair market value of the
Borrowing Base Properties at the time of any determination by the
Administrative Agent of the Borrowing Base Amount, based on the most
recent appraisals obtained by the Administrative Agent and as provided
herein, for each of the Borrowing Base Properties.
"APPROVED FUND" means, with respect to any Lender Party that
is a fund that invests in bank loans, any other fund that invests in
bank loans and is advised or managed by the same investment advisor as
such Lender Party or by an Affiliate of such investment advisor.
"ASSIGNMENT AND ACCEPTANCE" means an assignment and
acceptance entered into by a Lender Party and an Eligible Assignee and
accepted by the Administrative Agent, in accordance with Section 8.07
and in substantially the form of Exhibit C hereto.
"BAHIA MAR" means the 293-room resort, hotel and related
improvements, facilities and assets, including, without limitation,
the Mortgaged Property (as defined in the Bahia Mar Mortgage),
situated on that certain real property located in Broward County,
Florida, as more fully described in the Bahia Mar Mortgage, and
commonly known as the Bahia Mar Hotel.
"BASE RATE" means a fluctuating interest rate per annum in
effect from time to time, which rate per annum shall at all times be
equal to the higher of:
(a) the rate of interest announced publicly by BT
Co. in New York, New York, from time to time, as its prime
lending rate (the "PRIME LENDING RATE") (the Prime Lending
Rate is a reference rate and does not necessarily represent
the lowest or best rate actually charged to any customer; BT
Co. may make commercial loans or other loans at rates of
interest at, above or below the Prime Lending Rate); and
(b) 1/2 of 1% per annum above the Federal Funds
Rate.
"BASE RATE ADVANCE" means an Advance that bears interest as
provided in Section 2.06(a)(i).
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<PAGE> 7
"BOOK NET WORTH" shall be calculated in accordance with GAAP.
"BORROWER" has the meaning specified in the recital of
parties to this Agreement.
"BORROWER'S ACCOUNT" means such account of the Borrower as
the Borrower and the Administrative Agent may from time to time
designate as the "Borrower's Account".
"BORROWING" means a borrowing consisting of simultaneous
Advances of the same Type made by the Lenders.
"BORROWING BASE AMOUNT" means, as of any date of
determination, an amount determined by the Administrative Agent as the
lesser of (a) an amount which is equal to the combined fair market
value of the Borrowing Base Properties, in each case based on the most
recent Appraised Value, multiplied by the "Aggregate Loan to Value
Ratio" set forth in the first row of the table below; (b) an amount
which is equal to the Reserve Adjusted EBITDA determined on a combined
basis for the Operating Subsidiaries for the Rolling Period ending on
or immediately prior to such date of determination, divided by the
Debt Service Rate divided by the "Debt Service Coverage Ratio" set
forth in the second row of the table below; and (c) an amount which is
equal to the Reserve Adjusted EBITDA for such Rolling Period,
multiplied by the "Reserve Adjusted EBITDA factor" set forth in the
third row of the table below.
<TABLE>
<CAPTION>
After First After
Existing Transfer of Transfer of After Second
Borrowing Borrowing Base Registry if Transfer of
Base Property (Other First Borrowing
Properties than Registry) Transfer Base Property
---------- --------------- ------------ -------------
<S> <C> <C> <C> <C>
Aggregate Loan
to Value Ratio 50% 50% 45% 40%
Debt Service
Coverage Ratio 1.75 1.75 1.85 2.00
Reserve Adjusted 4.90 4.90 4.50 4.00
EBITDA factor
</TABLE>
"BORROWING BASE CERTIFICATE" means a certificate in
substantially the form of Exhibit G hereto, duly certified by the
chief financial officer of the Borrower.
"BORROWING BASE PROPERTIES" means, subject to the provisions
of Section 5.02(e)(iii), the following four properties: Bahia Mar,
Pier 66, Registry and Edgewater; PROVIDED, HOWEVER, that to the extent
any of the Borrowing Base Properties are sold pursuant to Section
5.02(e)(iii), such property shall no longer be considered a Borrowing
Base Property.
"BT CO." has the meaning specified in the recital of parties
to this Agreement.
"BUSINESS DAY" means a day of the year on which banks are not
required or authorized by law to close in New York City and, if the
applicable Business Day relates to any Eurodollar Rate Advances, on
which dealings are carried on in the London interbank market.
"CAP AGREEMENTS" means interest rate cap agreements purchased
for the purpose of hedging interest rates in accordance with section
5.01(r).
4
<PAGE> 8
"CAPITAL EXPENDITURES" means, for any Person as of any date
of determination, the sum of, without duplication, (a) all cash
expenditures made, directly or indirectly, by such Person or any of
its Subsidiaries during such period for equipment, fixed assets, real
property or improvements, or for replacements or substitutions
therefor or additions thereto, that have been or should be, in
accordance with GAAP, reflected as additions to property, plant or
equipment on a Consolidated balance sheet of such Person plus (b) the
aggregate principal amount of all Debt (including Obligations under
Capitalized Leases) assumed or incurred in connection with any such
expenditures.
"CAPITALIZED LEASES" means all leases that have been or
should be, in accordance with GAAP, recorded as capitalized leases.
For purposes of this definition, the purchase price of equipment that
is purchased simultaneously with the trade-in of existing equipment or
with insurance proceeds shall be included in Capital Leases only to
the extent of the gross amount of such purchase price less the credit
granted by the seller of such equipment for the equipment being traded
in at such time or the amount of such proceeds, as the case may be.
"CASH EQUIVALENTS" means any of the following, to the extent
owned by the Operating Subsidiaries free and clear of all Liens other
than Liens created under the Collateral Documents and having a
maturity of not greater than 180 days (except, with respect to clause
(a) below, not greater than one year and, with respect to clauses (b)
and (c) below, not greater than 90 days) from the date of acquisition
thereof: (a) readily marketable direct obligations of the Government
of the United States or any agency or instrumentality thereof or
obligations unconditionally guaranteed by the full faith and credit of
the Government of the United States, (b) insured certificates of
deposit of or time deposits with any commercial bank that is a Lender
Party or a member of the Federal Reserve System, issues (or the parent
of which issues) commercial paper rated as described in clause (c), is
organized under the laws of the United States or any State thereof and
has combined capital and surplus of at least $1 billion, (c)
commercial paper in an aggregate amount of not more than $250,000 per
issuer outstanding at any time, issued by any corporation organized
under the laws of any State of the United States and rated at least
"Prime-1" (or the then equivalent grade) by Moody's Investors Service,
Inc. or "A-1" (or the then equivalent grade) by Standard & Poor's
Ratings Group, a division of the McGraw Hill Companies, Inc., (d)
repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (b) and (c)
above entered into with any financial institution meeting the
qualifications specified in clause (b) above; or (e) money market or
mutual funds that invest solely in Cash Equivalents of the types
described in clauses (a), (b) and (c) above.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended from time to time.
5
<PAGE> 9
"CERCLIS" means the Comprehensive Environmental Response,
Compensation and Liability Information System maintained by the U.S.
Environmental Protection Agency.
"CHANGE OF CONTROL" means the occurrence of any of the
following: (a) the direct or indirect sale, transfer, conveyance or
other disposition (other than by way of merger or consolidation), in
one or a series of related transactions, of all or substantially all
of the properties or assets of the Parent Guarantor and its Restricted
Subsidiaries (as defined in the Indenture), taken as a whole, to any
"person" (as that term is used in Section 13(d)(3) of the Exchange
Act) other than to H. Wayne Huizenga (the "PRINCIPAL"), 80% (or more)
owned Subsidiary or any immediate family member of the Principal (the
"RELATED PARTIES"); (b) the adoption of a plan relating to the
liquidation or dissolution of the Parent Guarantor; (c) the
consummation of any transaction (including, without limitation, any
merger or consolidation) the result of which is that any "person" (as
defined above) other than the Principal and his Related Parties,
becomes the beneficial owner, directly or indirectly, of Voting Stock
(as defined in the Indenture) of the Parent Guarantor with the power
to vote 50% or more of the total votes entitled to be cast on any
matter submitted to a vote of shareholders; (d) during any consecutive
two year period, individuals who at the beginning of such period
constituted the Board of Directors of the Parent Guarantor (together
with any new directors whose election to such Board of Directors, or
whose nomination for election by the stockholders of the Parent
Guarantor, was approved by a vote of a majority of the directors then
still in office who were either directors at the beginning of such
period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board
of Directors of the Parent Guarantor then in office; or (e) the Parent
Guarantor consolidates with, or merges with or into, any Person, or
any Person consolidates with, or merges with or into, the Parent
Guarantor, in any such event pursuant to a transaction in which any of
the outstanding Voting Stock (as defined in the Indenture) of the
Parent Guarantor or such other Person is converted into or exchanged
for cash, securities or other property, other than any such
transaction where the Voting Stock (as defined in the Indenture) of
the Parent Guarantor outstanding immediately prior to such transaction
is converted into or exchanged for Voting Stock, other than
Disqualified Stock (as such terms are defined in the Indenture), of
the surviving or transferee Person constituting a majority of the
outstanding shares of such Voting Stock (as defined in the Indenture
of such surviving or transferee Person (immediately after giving
effect to such issuance) and no Person other than the Principal and
his Related Parties, becomes the beneficial owner, directly or
indirectly, of Voting Stock (as defined in the Indenture) of such
Person with the power to vote 50% or more of the total votes entitled
to be cast on any matter submitted to a vote of shareholders.
"CLOSING DATE" means the date of the initial Borrowing
hereunder.
"COLLATERAL" means all "Collateral" referred to in the
Collateral Documents and all other property that is or is intended to
be subject to any Lien in favor of the Administrative Agent for the
benefit of the Lender Parties.
"COLLATERAL ASSIGNMENT OF LICENSE AGREEMENT" has the meaning
specified in Section 3.01(a)(xiv).
6
<PAGE> 10
"COLLATERAL DOCUMENTS" means the Security Agreements, the
Mortgages, the Environmental Indemnity Agreement and any other
agreement that creates or purports to create a Lien in favor of the
Administrative Agent for the benefit of the Lender Parties.
"COMMITMENT" means, with respect to any Lender at any time,
the amount set forth opposite such Lender's name on Schedule I hereto
under the caption "Commitment" or, if such Lender has entered into one
or more Assignment and Acceptances, set forth for such Lender in the
Register maintained by the Administrative Agent pursuant to Section
8.07(d) as such Lender's "Commitment", as such amount may be reduced
or terminated at or prior to such time pursuant to Section 2.04 or
6.01, respectively.
"CONSOLIDATED" refers, with respect to any Person, to the
consolidation of accounts of such Person and its Subsidiaries in
accordance with GAAP.
"CONTINGENT OBLIGATION" means, with respect to any Person,
any Obligation or arrangement of such Person to guarantee or intended
to guarantee any Debt, leases, dividends or other payment Obligations
("PRIMARY OBLIGATIONS") of any other Person (the "PRIMARY OBLIGOR") in
any manner, whether directly or indirectly, including, without
limitation, (a) the direct or indirect guarantee, endorsement (other
than for collection or deposit in the ordinary course of business),
co-making, discounting with recourse or sale with recourse by such
Person of the Obligation of a primary obligor, (b) the Obligation to
make take-or-pay or similar payments, if required, regardless of
nonperformance by any other party or parties to an agreement or (c)
any Obligation of such Person, whether or not contingent, (i) to
purchase any such primary obligation or any property constituting
direct or indirect security therefor, (ii) to advance or supply funds
(A) for the purchase or payment of any such primary obligation or (B)
to maintain working capital or equity capital of the primary obligor
or otherwise to maintain the net worth or solvency of the primary
obligor, (iii) to purchase property, assets, securities or services
primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of
such primary obligation or (iv) otherwise to assure or hold harmless
the holder of such primary obligation against loss in respect thereof.
The amount of any Contingent Obligation shall be deemed to be an
amount equal to the stated or determinable amount of the primary
obligation in respect of which such Contingent Obligation is made (or,
if less, the maximum amount of such primary obligation for which such
Person may be liable pursuant to the terms of the instrument
evidencing such Contingent Obligation) or, if not stated or
determinable, the maximum reasonably anticipated liability in respect
thereof (assuming such Person is required to perform thereunder), as
determined by such Person in good faith.
"CONVERSION", "CONVERT" and "CONVERTED" each refer to a
conversion of Advances of one Type into Advances of the other Type
pursuant to Section 2.08 or 2.09.
"DEBT" of any Person means, without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all Obligations,
contingent or otherwise, of such Person for the deferred purchase
price of property or services (other than trade payables not overdue
by more than 60 days incurred in the ordinary course of such Person's
business), (c) all Obligations, contingent or otherwise, of such
Person evidenced by notes, bonds, debentures or other similar
instruments, (d) all Obligations, contingent or otherwise, of such
Person created or arising under any conditional sale or other title
7
<PAGE> 11
retention agreement with respect to property acquired by such Person
(even though the rights and remedies of the seller or lender under
such agreement in the event of default are limited to repossession or
sale of such property), (e) all Obligations, contingent or otherwise,
of such Person as lessee under Capitalized Leases, (f) all
Obligations, contingent or otherwise, of such Person under acceptance,
letter of credit or similar facilities, (g) all Obligations of such
Person to purchase, redeem, retire, defease or otherwise make any
payment in respect of any Equity Interests in such Person or any other
Person or any warrants, rights or options to acquire such capital
stock, valued, in the case of Redeemable Preferred Interests, at the
greater of its voluntary or involuntary liquidation preference PLUS
accrued and unpaid dividends, (h) all Obligations of such Person in
respect of Hedge Agreements, valued at the Agreement Value thereof,
(i) all Contingent Obligations of such Person and (j) all indebtedness
and other payment Obligations referred to in clauses (a) through (i)
above of another Person secured by (or for which the holder of such
Debt has an existing right, contingent or otherwise, to be secured by)
any Lien on property (including, without limitation, accounts and
contract rights) owned by such Person, even though such Person has not
assumed or become liable for the payment of such indebtedness or other
payment Obligations.
"DEBT SERVICE RATE" means, as of any date of determination,
the greatest of (i) the average weighted interest rate applicable to
Advances at such date; (ii) 9% and (iii) debt service constant on a 25
year fully amortizing note secured by a mortgage bearing interest at
the 7 year U.S. Treasury obligation rate effective on such date based
on the rate quoted for the 7-year U.S. Treasury obligation
interpolated "ICUR 7" on the Bloomberg machine(or any successor
thereto) plus 3.25%, which rate as determined at the Administrative
Agent's reasonable discretion shall be conclusive and binding for all
purposes, absent manifest error.
"DEFAULT" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be
given or time elapse or both.
"DEFAULTED ADVANCE" means, with respect to any Lender Party
at any time, the portion of any Advance required to be made by such
Lender Party to the Borrower pursuant to Section 2.01 or 2.02 at or
prior to such time which has not been made by such Lender Party or by
the Administrative Agent for the account of such Lender Party pursuant
to Section 2.02(d) as of such time.
"DEFAULTED AMOUNT" means, with respect to any Lender Party at
any time, any amount required to be paid by such Lender Party to the
Administrative Agent or any other Lender Party hereunder or under any
other Loan Document at or prior to such time which has not been so
paid as of such time, including, without limitation, any amount
required to be paid by such Lender Party to (a) the Administrative
Agent pursuant to Section 2.02(d) or Section 7.05 or (b) any other
Lender Party pursuant to Section 2.12.
"DEFAULTING LENDER" means, at any time, any Lender Party
that, at such time (a) owes a Defaulted Advance or a Defaulted Amount
or (b) shall take any action or be the subject of any action or
proceeding of a type described in Section 6.01(f).
"DOMESTIC LENDING OFFICE" means, with respect to any Lender
Party, the office of such Lender Party specified as its "Domestic
Lending Office" opposite its name on Schedule I hereto or in the
8
<PAGE> 12
Assignment and Acceptance pursuant to which it became a Lender Party,
as the case may be, or such other office of such Lender Party as such
Lender Party may from time to time specify to the Borrower and the
Administrative Agent.
"DOMESTIC SUBSIDIARY" of any Person means any Subsidiary
other than a Foreign Subsidiary.
"EBITDA" means, with respect to any Person, for any Rolling
Period and as of any date of determination, net income plus (a) 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 net income, plus (b) the provision for taxes based on
income or profits of such Person for such Rolling Period, to the
extent such provision for taxes was included in computing net income
plus (c) Interest Expense of such Person for such Rolling Period to
the extent such expense was deducted in computing net income, plus (d)
depreciation and amortization expense for such Rolling Period to the
extent such expense was deducted in computing net income less (e) an
amount equal to any extraordinary gain plus any net gain realized in
connection with an asset sale;
provided that if any asset has been (X) purchased subsequent to the
commencement of such Rolling Period, EBITDA for the period beginning
on the first day of such Rolling Period shall be increased by the
amount of EBITDA for such Rolling Period associated with such asset
purchased, and (Y) sold subsequent to the commencement of such Rolling
Period, EBITDA for the period beginning on the first day of such
Rolling Period shall be reduced by the amount of EBITDA associated
with such asset sold.
"EDGEWATER" means the 125-room resort and hotel and related
improvements, facilities and assets, including, without limitation,
the Mortgaged Property (as defined in the Edgewater Mortgage),
situated on that certain real property located in Collier County,
Florida, as more fully described in the Edgewater Mortgage, and
commonly known as the Edgewater Hotel.
"ELIGIBLE ASSIGNEE" means: (i) any "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act) or any
"accredited investor" (as defined in Section 2(15) of the Securities
Act); (ii) a Lender Party; (iii) an Affiliate of a Lender Party; (iv)
a commercial bank organized under the laws of the United States, or
any State thereof, and having a combined capital and surplus of at
least $400,000,000; (v) a savings and loan association or savings bank
organized under the laws of the United States, or any State thereof,
and having a combined capital and surplus of at least $400,000,000;
(vi) a commercial bank organized under the laws of any other country
that is a member of the OECD or has concluded special lending
arrangements with the International Monetary Fund associated with its
General Arrangements to Borrow or a political subdivision of any such
country, and having a combined capital and surplus of at least
$500,000,000, so long as such bank is acting through a branch or
agency located in the United States and (vii) a finance company,
insurance company or other financial institution or fund (whether a
corporation, partnership, trust or other entity) that is engaged in
making, purchasing or otherwise investing in commercial loans in the
ordinary course of its business and having a combined capital and
surplus of at least $250,000,000; PROVIDED, HOWEVER, that neither any
Loan Party nor any Affiliate of a Loan Party shall qualify as an
Eligible Assignee under this definition.
9
<PAGE> 13
"ENVIRONMENTAL ACTION" means any action, suit, demand, demand
letter, written claim, notice of non-compliance or violation, notice
of liability or potential liability, investigation, proceeding,
consent order or consent agreement relating in any way to any
Environmental Law, any Environmental Permit or Hazardous Material or
arising from alleged injury or threat to health, safety or the
environment, including, without limitation, (a) by any governmental or
regulatory authority for enforcement, cleanup, removal, response,
remedial or other actions or damages and (b) by any governmental or
regulatory authority or third party for damages, contribution,
indemnification, cost recovery, compensation or injunctive relief.
"ENVIRONMENTAL INDEMNITY AGREEMENT" has the meaning specified
in Section 3.01(a)(viii).
"ENVIRONMENTAL LAW" means any federal, state, local or
foreign statute, law, ordinance, rule, regulation, code, order, writ,
judgment, injunction, decree or judicial or agency interpretation,
policy or guidance relating to pollution or protection of the
environment, health, safety or natural resources, including, without
limitation, those relating to the use, handling, transportation,
treatment, storage, disposal, release or discharge of Hazardous
Materials.
"ENVIRONMENTAL PERMIT" means any permit, approval,
identification number, license or other authorization required under
any Environmental Law.
"EQUITY INTERESTS" means, with respect to any Person, shares
of capital stock of (or other ownership or profit interests in) such
Person, warrants, options or other rights for the purchase or other
acquisition from such Person of shares of capital stock of (or other
ownership or profit interests in) such Person, securities convertible
into or exchangeable for shares of capital stock of (or other
ownership or profit interests in) such Person or warrants, rights or
options for the purchase or other acquisition from such Person of such
shares (or such other interests), and other ownership or profit
interests in such Person (including, without limitation, partnership,
member or trust interests therein), whether voting or nonvoting, and
whether or not such shares, warrants, options, rights or other
interests are authorized or otherwise existing on any date of
determination.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated
and rulings issued thereunder.
"ERISA AFFILIATE" means any Person that for purposes of Title
IV of ERISA is a member of the controlled group of any Loan Party, or
under common control with any Loan Party, within the meaning of
Section 414 of the Internal Revenue Code.
"ERISA EVENT" means (a) (i) the occurrence of a reportable
event, within the meaning of Section 4043 of ERISA, with respect to
any Plan unless the 30-day notice requirement with respect to such
event has been waived by the PBGC; or (ii) the requirements of
subsection (1) of Section 4043(b) of ERISA (without regard to
subsection (2) of such Section) are met with respect to a contributing
sponsor, as defined in Section 4001(a)(13) of ERISA, of a Plan, and an
event described in paragraph (9), (10), (11), (12) or (13) of Section
4043(c) of ERISA is reasonably expected to occur with respect to such
Plan within the following 30 days; (b) the application for a minimum
funding waiver with respect to a Plan; (c) the provision by the
administrator of any Plan of a notice of intent to
10
<PAGE> 14
terminate such Plan, pursuant to Section 4041(a)(2) of ERISA
(including any such notice with respect to a plan amendment referred
to in Section 4041(e) of ERISA); (d) the cessation of operations at a
facility of any Loan Party or any ERISA Affiliate in the circumstances
described in Section 4062(e) of ERISA; (e) the withdrawal by any Loan
Party or any ERISA Affiliate from a Multiple Employer Plan during a
plan year for which it was a substantial employer, as defined in
Section 4001(a)(2) of ERISA; (f) the conditions for imposition of a
lien under Section 302(f) of ERISA shall have been met with respect to
any Plan; (g) the adoption of an amendment to a Plan requiring the
provision of security to such Plan, pursuant to Section 307 of ERISA;
or (h) the institution by the PBGC of proceedings to terminate a Plan
pursuant to Section 4042 of ERISA, or the occurrence of any event or
condition described in Section 4042 of ERISA that constitutes grounds
for the termination of, or the appointment of a trustee to administer,
such Plan.
"EUROCURRENCY LIABILITIES" has the meaning specified in
Regulation D of the Board of Governors of the Federal Reserve System,
as in effect from time to time.
"EURODOLLAR LENDING OFFICE" means, with respect to any Lender
Party, the office of such Lender Party specified as its "Eurodollar
Lending Office" opposite its name on Schedule I hereto or in the
Assignment and Acceptance pursuant to which it became a Lender Party
(or, if no such office is specified, its Domestic Lending Office), or
such other office of such Lender Party as such Lender Party may from
time to time specify to the Borrower and the Administrative Agent.
"EURODOLLAR RATE" means, for any Interest Period for all
Eurodollar Rate Advances comprising part of the same Borrowing, an
interest rate per annum equal to the rate per annum obtained by
dividing (a) the average of the respective rates per annum (rounded
upward to the next whole multiple of 1/16th of 1%) posted by each of
the principal London offices of banks posting rates as displayed on
the Dow Jones Markets screen, page 3750 or such other page as may
replace such page on such service for the purpose of displaying the
London interbank offered rate of major banks for deposits in U.S.
Dollars, at approximately 11:00 A.M. (London time) two Business Days
before the first day of such Interest Period for deposits in an amount
substantially equal to BT Co.'s Eurodollar Rate Advance comprising
part of such Borrowing to be outstanding during such Interest Period
and for a period equal to such Interest Period by (b) a percentage
equal to 100% minus the Eurodollar Rate Reserve Percentage for such
Interest Period.
"EURODOLLAR RATE ADVANCE" means an Advance that bears
interest as provided in Section 2.06(a)(ii).
"EURODOLLAR RATE RESERVE PERCENTAGE" for any Interest Period
for all Eurodollar Rate Advances comprising part of the same Borrowing
means the reserve percentage applicable two Business Days before the
first day of such Interest Period under regulations issued from time
to time by the Board of Governors of the Federal Reserve System (or
any successor) for determining the maximum reserve requirement
(including, without limitation, any emergency, supplemental or other
marginal reserve requirement) for a member bank of the Federal Reserve
System in New York City with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities (or with respect
to any other category of liabilities that includes deposits by
reference to which the interest rate on Eurodollar Rate Advances is
determined) having a term equal to such Interest Period.
11
<PAGE> 15
"EVENTS OF DEFAULT" has the meaning specified in Section 6.01.
"EXISTING DEBT" means Debt of the Parent Guarantor, the
Borrower and its Subsidiaries outstanding immediately before the
Transaction.
"EXISTING LOAN DOCUMENTS" has the meaning specified in
Section 3.01(a)(v).
"FACILITY" means, at any time, the aggregate amount of the
Commitments at such time.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating
interest rate equal for each day during such period to the weighted
average of the rates on overnight Federal Funds transactions with
members of the Federal Reserve System arranged by Federal Funds
brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day that is
a Business Day, the average of the quotations for such day for such
transactions received by the Administrative Agent from three Federal
Funds brokers of recognized standing selected by the Administrative
Agent.
"FEE LETTERS" means each agreement entered into between the
Parent Guarantor and each of the Agents and BT Alex. Brown
Incorporated with respect to the payment of fees or other amounts
relating to the Facility.
"FF&E" means fixtures, furnishings and equipment at the
Borrowing Base Properties.
"FF&E RESERVE" means, for any Rolling Period, on a
Consolidated basis for the Borrowing Base Properties, a reserve
maintained in accordance with Section 5.01(h) by each Operating
Subsidiary while any Commitment hereunder shall exist to fund
replacements of fixtures, furnishings and equipment at the applicable
Borrowing Base Property.
"FF&E RESERVE ACCOUNT" has the meaning specified in
Section 2.15.
"FISCAL YEAR" means a fiscal year of the Parent Guarantor and
its Consolidated Subsidiaries ending on June 30 in any calendar year,
as it may be changed to the extent permitted by Section 5.02(i)(B).
"FIXED CHARGE COVERAGE RATIO" means, with respect to the
Parent Guarantor, for any Rolling Period and as of any date of
determination, the ratio of (a) Adjusted EBITDA for such Rolling
Period to (b) the sum of (i) Interest Expense for such Rolling Period,
(ii) regularly scheduled principal payments of Total Funded Debt made
during such Rolling Period, and (iii) any cash dividends, whether
common or preferred, paid during such Rolling Period.
"FOREIGN SUBSIDIARY" means a Subsidiary that is organized
under the laws of a jurisdiction other than the United States or any
State thereof or the District of Columbia.
"FRANCHISE AGREEMENTS" means the License Agreement dated as
of June 28, 1994 between Radisson Hotels International, Inc., as
Licensor, and such Manager, as Licensee, and the Hyatt Hotel
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Franchise Agreement dated November 14, 1994 between Hyatt Franchise
Corporation, as Franchisor, and such Manager, as Franchisee, as
applicable.
"GAAP" has the meaning specified in Section 1.03.
"GUARANTIES" means the Parent Guaranty and the Subsidiary
Guaranty.
"GUARANTORS" means the Parent Guarantor and the Subsidiary
Guarantors.
"HAZARDOUS MATERIALS" means (a) petroleum or petroleum
products, by-products or breakdown products, radioactive materials,
asbestos-containing materials, polychlorinated biphenyls and radon gas
and (b) any other chemicals, materials or substances designated,
classified or regulated as hazardous or toxic or as a pollutant or
contaminant under any Environmental Law.
"HEDGE AGREEMENTS" means interest rate swap, cap or collar
agreements, interest rate future or option contracts, currency swap
agreements, currency future or option contracts and other hedging
agreements.
"HOTEL ACCOUNT" has the meaning specified in Section 2.15.
"HOTEL ACCOUNT BANK" has the meaning specified in Section
2.15.
"INDEMNIFICATION AGREEMENT" means the agreement in
substantially the form annexed hereto as Exhibit J.
"INDEMNIFIED COSTS" has the meaning specified in Section
7.05(a).
"INDEMNIFIED PARTY" has the meaning specified in Section
8.04(b).
"INDENTURE" means the Indenture dated as of April 21, 1999
among the Parent Guarantor, the guarantors thereunder and The Bank of
New York, as Trustee.
"INITIAL LENDERS" has the meaning specified in the recital of
parties to this Agreement.
"INSUFFICIENCY" means, with respect to any Plan, the amount,
if any, of its unfunded benefit liabilities, as defined in Section
4001(a)(18) of ERISA.
"INTANGIBLE TAX RESERVE" has the meaning set forth in Section
4.01(o).
"INTEREST EXPENSE" means, with respect to any Person, for any
Rolling Period and as of any date of determination, without
duplication, the sum of (a) interest expense, whether paid or accrued,
to the extent such expense was deducted in computing net income
(including amortization or original issue discount, non-cash interest
payments, the interest component of Capital Leases, but excluding
amortization of deferred financing fees), and (b) interest for which
such Person is liable pursuant to any Debt, including any Subsidiary
of such Person, in each case calculated for such Person, PROVIDED,
HOWEVER, that with respect to the calculation of Interest Expense made
on or prior to April 30, 2000,
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<PAGE> 17
such amounts shall be calculated by multiplying such amount from and
after the Closing Date by the Annualization Factor.
"INTEREST PERIOD" means, for each Eurodollar Rate Advance
comprising part of the same Borrowing, the period commencing on the
date of such Eurodollar Rate Advance or the date of the Conversion of
any Base Rate Advance into such Eurodollar Rate Advance, and ending on
the last day of the period selected by the Borrower pursuant to the
provisions below and, thereafter, each subsequent period commencing on
the last day of the immediately preceding Interest Period and ending
on the last day of the period selected by the Borrower pursuant to the
provisions below. Subject to Sections 2.08 and 2.09 hereof, the
duration of each such Interest Period shall be one, two, three or six
months, as the Borrower may, upon notice received by the
Administrative Agent not later than 11:00 A.M. (New York City time) on
the third Business Day prior to the first day of such Interest Period,
select; PROVIDED, HOWEVER, that:
(a) the Borrower may not select any Interest Period
with respect to any Eurodollar Rate Advance under the
Facility that ends after the Termination Date;
(b) Interest Periods commencing on the same date for
Eurodollar Rate Advances comprising part of the same
Borrowing shall be of the same duration;
(c) whenever the last day of any Interest Period
would otherwise occur on a day other than a Business Day, the
last day of such Interest Period shall be extended to occur
on the next succeeding Business Day, PROVIDED, HOWEVER, that,
if such extension would cause the last day of such Interest
Period to occur in the next following calendar month, the
last day of such Interest Period shall occur on the
immediately preceding Business Day; and
(d) whenever the first day of any Interest Period
occurs on a day of an initial calendar month for which there
is no numerically corresponding day in the calendar month
that succeeds such initial calendar month by the number of
months equal to the number of months in such Interest Period,
such Interest Period shall end on the last Business Day of
such succeeding calendar month.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of
1986, as amended from time to time, and the regulations promulgated
and rulings issued thereunder.
"INVESTMENT" in any Person means any loan or advance to such
Person, any purchase or other acquisition of any Equity Interests or
Debt or the assets comprising a division or business unit or a
substantial part or all of the business of such Person, any capital
contribution to such Person or any other direct or indirect investment
in such Person, including, without limitation, any acquisition by way
of a merger or consolidation and any arrangement pursuant to which the
investor incurs Debt of the types referred to in clause (i) or (j) of
the definition of "DEBT" in respect of such Person.
"LENDER PARTY" means any Lender.
"LENDERS" means the Initial Lenders and each Person that
shall become a Lender hereunder pursuant to Section 8.07 for so long
as such Initial Lender or Person shall be a party to this Agreement.
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"LEVERAGE RATIO" means, with respect to the Parent Guarantor,
as of any date of determination, the ratio of (a) Total Funded Debt as
at such date to (b) Adjusted EBITDA for the Rolling Period ending on
or immediately prior to such date.
"LICENSOR CONSENT AND SUBORDINATION AGREEMENTS" has the
meaning specified in Section 3.01(a)(xiv).
"LIEN" means any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential
arrangement, including, without limitation, the lien or retained
security title of a conditional vendor and any easement, right of way
or other encumbrance on, or defect in, title to real property.
"LOAN DOCUMENTS" means (i) this Agreement, (ii) the Notes,
(iii) the Collateral Documents, (iv) the Guaranties and (v) the Fee
Letters, and (vii) any other agreement, document or instrument issued
by the Borrower or any Guarantor evidencing, securing or guarantying
the foregoing or the Facility (or any portion thereof), and in each
case as amended, amended and restated, supplemented or otherwise
modified from time to time.
"LOAN PARTIES" means the Borrower and the Guarantors.
"LOCKBOX" shall have the meaning specified in Section 2.15.
"LOCKBOX ACCOUNT" shall have the meaning specified in Section
2.15.
"MANAGEMENT CONTRACTS" means the Hotel Management Agreement
dated March 4, 1997 between Rahn Bahia Mar, Ltd., as Owner, and Rahn
Bahia Mar Mgmt, Inc., as Manager, the Hotel Management Agreement dated
as of March 4, 1997 between 2301 SE 17th St., Ltd., as Owner, and Rahn
Pier Mgt., Inc., as Manager, as applicable and each of the Hotel
Management Agreements with respect to the Edgewater and Registry in
form and substance acceptable to the Administrative Agent.
"MANAGEMENT SUBORDINATION AGREEMENTS" has the meaning
specified in Section 3.01(a)(xiv).
"MANAGERS" means Rahn Bahia Mar Mgmt., Inc. and Rahn Pier
Mgt., Inc, as applicable.
"MARGIN STOCK" has the meaning specified in Regulation U.
"MATERIAL ADVERSE CHANGE" means any material adverse change
in the business, condition (financial or otherwise), operations,
performance, properties or prospects of the Parent Guarantor and its
Subsidiaries taken as a whole or any of the Operating Subsidiaries.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on
(a) the business, condition (financial or otherwise), operations,
performance, properties or prospects of the Parent Guarantor and its
Subsidiaries taken as a whole or of any of the Operating Subsidiaries,
(b) the rights and remedies of the Agents or any Lender Party under
any Transaction Document or (c) the ability of the Parent Guarantor
and its Subsidiaries taken as a whole or of any of the Operating
Subsidiaries to perform their Obligations under any Transaction
Document to which they are or are to become parties.
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<PAGE> 19
"MORTGAGEE TITLE INSURANCE POLICIES" has the meaning
specified in Section 3.01(a)(vii).
"MORTGAGES" has the meaning specified in Section
3.01(a)(vii).
"MORTGAGORS" has the meaning specified in the Security
Agreements.
"MULTIEMPLOYER PLAN" means a multiemployer plan, as defined
in Section 4001(a)(3) of ERISA, to which any Loan Party or any ERISA
Affiliate is making or accruing an obligation to make contributions,
or has within any of the preceding five plan years made or accrued an
obligation to make contributions.
"MULTIPLE EMPLOYER PLAN" means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, that (a) is maintained for
employees of any Loan Party or any ERISA Affiliate and at least one
Person other than the Loan Parties and the ERISA Affiliates or (b) was
so maintained and in respect of which any Loan Party or any ERISA
Affiliate could have liability under Section 4064 or 4069 of ERISA in
the event such plan has been or were to be terminated.
"NOTE" means a promissory note of the Borrower required to be
issued pursuant to Section 2.14, which Note shall be payable to the
order of any Lender, in face principal amount of each requesting
Lender's Commitment, and otherwise substantially the form of Exhibit A
hereto.
"NOTE PURCHASE AGREEMENT" means the Note Agreement dated as
of April 21, 1999 among the Parent Guarantor and the guarantors and
initial purchasers thereunder, pursuant to which the Subordinated
Notes are issued, as amended, amended and restated, supplemented or
otherwise modified from time in accordance with its terms, to the
extent permitted under the Loan Documents.
"NOTICE OF BORROWING" has the meaning specified in Section
2.02(a).
"NPL" means the National Priorities List under CERCLA.
"OBLIGATION" means, with respect to any Person, any payment,
performance or other obligation of such Person of any kind, including,
without limitation, any liability of such Person on any claim, whether
or not the right of any creditor to payment in respect of such claim
is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, disputed, undisputed, legal, equitable, secured or unsecured,
and whether or not such claim is discharged, stayed or otherwise
affected by any proceeding referred to in Section 6.01(f). Without
limiting the generality of the foregoing, the Obligations of any Loan
Party under the Loan Documents include (a) the obligation to pay
principal, interest, charges, expenses, fees, attorneys' fees and
disbursements, indemnities and other amounts payable by such Loan
Party under any Loan Document and (b) the obligation of such Loan
Party to reimburse any amount in respect of any of the foregoing that
any Lender Party, in its sole discretion, may elect to pay or advance
on behalf of such Loan Party.
"OECD" means the Organization for Economic Cooperation and
Development.
"OPEN YEAR" has the meaning specified in Section 4.01(o)(ii).
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<PAGE> 20
"OPERATING SUBSIDIARIES" means each of the Subsidiaries of
the Borrower that directly owns one or more of the Borrowing Base
Properties, as listed on Schedule 4.01(b) hereto.
"OTHER TAXES" has the meaning specified in Section 2.11(b).
"PARENT GUARANTOR" has the meaning specified in the recital
of parties to this Agreement.
"PARENT GUARANTOR SECURITY AGREEMENT" has the meaning
specified in Section 3.01(a)(iii).
"PARENT GUARANTY" means a guaranty in substantially the form
of Exhibit F-1, as amended, amended and restated, supplemented or
otherwise modified from time to time in accordance with its terms.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"PERMITTED ENCUMBRANCES" means the specific title exceptions
described in the Mortgagee Title Policies (but not including any form
exclusions, conditions or stipulations set forth in the policies).
"PERMITTED LIENS" means such of the following as to which no
enforcement, collection, execution, levy or foreclosure proceeding
shall have been commenced: (a) Liens for taxes, assessments and
governmental charges or levies to the extent not required to be paid
under Section 5.01(b) hereof (as to which adequate reserves have been
established in accordance with GAAP), (b) The Permitted Encumbrances
and (c) statutory mechanic's and materialman's claims pertaining to
the construction on or improvements to the Borrowing Base Properties
to the extent that (i) such improvements are permitted under the Loan
Documents and (ii) the existence of such mechanic's and materialman's
liens is permitted pursuant to the Mortgages.
"PERSON" means an individual, partnership, corporation
(including a business trust), limited liability company, joint stock
company, trust, unincorporated association, joint venture or other
entity, or a government or any political subdivision or agency
thereof.
"PIER 66" means the resort, hotel and marina and related
improvements, facilities and assets, including, without limitation,
the Mortgaged Property (as defined in the Pier 66 Mortgage), situated
on that certain real property located in Broward County, Florida, and
commonly known as the Hyatt Regency Pier 66 Resort & Marina.
"PLAN" means a Single Employer Plan or a Multiple Employer
Plan.
"PLEDGED DEBT" has the meaning specified in the Security
Agreements.
"PLEDGED SHARES" means all Pledged Shares and all other
Equity Interests pledged to the Administrative Agent for the benefit
of the Lenders pursuant to the Security Agreements.
"PREFERRED INTERESTS" means, with respect to any Person,
Equity Interests issued by such Person that are entitled to a
preference or priority over any other Equity Interests issued by such
Person upon any distribution of such Person's property and assets,
whether by dividend or upon liquidation.
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"PRO RATA SHARE" of any amount means, with respect to any
Lender at any time, the product of such amount TIMES a fraction the
numerator of which is the amount of such Lender's Commitment at such
time (or if the Commitments shall have been terminated, such Lender's
Commitment as in effect immediately prior to such termination) and the
denominator of which is the Facility at such time (or if the
Commitments shall have been terminated, the Facility as in effect
immediately prior to such termination); provided, however, that with
respect to any payments to be allocated among the Lenders, during any
period that a Lender is a Defaulting Lender, the Pro Rata Shares of
the Lenders shall be reallocated by deducting from Defaulting Lender's
Commitment (and the Facility) an amount equal to the Default Amount.
"REDEEMABLE" means, with respect to any Equity Interest, any
Debt or any other right or Obligation, any such Equity Interest, Debt,
right or Obligation that (a) the issuer has undertaken to redeem at a
fixed or determinable date or dates, whether by operation of a sinking
fund or otherwise, or upon the occurrence of a condition not solely
within the control of the issuer or (b) is redeemable at the option of
the holder.
"REGISTER" has the meaning specified in Section 8.07(d).
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement dated as of April 21, 1999 by and among the Parent
Guarantor, the guarantors thereunder and the initial purchasers party
thereunder.
"REGISTRY" means the resort, hotel and private club and
related improvements, facilities and assets, including, without
limitation, the Mortgaged Property (as defined in the Registry
Mortgage), situated on that certain real property located in Collier
County, Florida, as more fully described in the Registry Mortgage, and
commonly known as the Registry Hotel.
"REGISTRY LICENSE AGREEMENT" has the meaning specified in
Section 3.01(a)(xv).
"REGULATION U" means Regulation U of the Board of Governors
of the Federal Reserve System, as in effect from time to time.
"RELATED DOCUMENTS" means the Management Contracts and the
Franchise Agreements.
"REQUIRED LENDERS" means, at any time, Lenders holding at
least 51% of the aggregate Commitments at such time PROVIDED, HOWEVER,
that if any Lender shall be a Defaulting Lender at such time, there
shall be excluded from the determination of Required Lenders at such
time (A) the aggregate principal amount of the Advances owing to such
Lender (in its capacity as a Lender) and outstanding at such time and
(B) the Unused Commitment of such Lender at such time.
"RESERVE ADJUSTED EBITDA" means, with respect to any Person
for any Rolling Period and as at any date of determination, an amount
equal to Adjusted EBITDA less (a) a minimum FF&E reserve of 4%
(however, not to exceed 4% in the event actual reserves for FF&E are
greater) of Total Revenues and (b) management fees of 3% of Total
Revenues including any management fees actually paid that are deducted
from Adjusted EBITDA.
"RESPONSIBLE OFFICER" means any executive officer of the
Parent Guarantor.
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"ROLLING PERIOD" means, at any date of determination, the
most recently completed consecutive 12 calendar month period ending on
or immediately prior to such date; PROVIDED, HOWEVER, that for
purposes of calculating Interest Expense (i) with respect to any month
ending on or prior to April 30, 2000, the period commencing on the
Closing Date and ending on such date of determination and (ii) with
respect to any date of determination thereafter, the consecutive 12
calendar month period ending on the last day of such date of
determination.
"SECURED OBLIGATIONS" has the meaning specified in the
Security Agreements.
"SECURED PARTIES" means, collectively, the Administrative
Agent, the Syndication Agent and each Lender.
"SECURITIES ACT" means the Securities Act of 1933, as
amended.
"SECURITY AGREEMENTS" shall mean the Parent Guarantor
Security Agreement and the Subsidiary Guarantor Security Agreement.
"SINGLE EMPLOYER PLAN" means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, that (a) is maintained for
employees of any Loan Party or any ERISA Affiliate and no Person other
than the Loan Parties and the ERISA Affiliates or (b) was so
maintained and in respect of which any Loan Party or any ERISA
Affiliate could have liability under Section 4069 of ERISA in the
event such plan has been or were to be terminated.
"SINGLE PURPOSE ENTITY" means, a Person, other than an
individual, which (i) is formed or organized solely for the purpose of
holding, directly or indirectly, an ownership interest in the
Borrowing Base Properties and the Managers thereof or Equity Interests
in Persons holding directly or indirectly, an ownership interest in
the Borrowing Base Properties and the Managers thereof, (ii) does not
engage in any business unrelated to the Borrowing Base Properties or
such Equity Interests, the operation and management of the Borrowing
Base Properties, and the financing thereof pursuant to the Loan
Documents, (iii) has not and will not have any assets other than those
related to its interest in the Borrowing Base Properties and the
Managers thereof or such Equity Interests or such financing thereof,
and has not or will not have any Debt other than, as applicable, the
Debt permitted pursuant to Section 5.02(b), (iv) maintains its own
separate books and records and its own accounts, in each case which
are separate and apart from the books and records and accounts of any
other Person, (v) holds itself out as being a Person, separate and
apart from any other Person, (vi) does not and will not commingle its
funds or assets with those of any other Person, (vii) conducts its own
business in its own name; (viii) maintains financial statements in
accordance with the terms of this Agreement, (ix) pays its own debts
and liabilities when they become due out of its own funds, (x)
observes all partnership formalities or corporate formalities or
limited liability company formalities, as applicable, and does all
things necessary to preserve its existence, (xi) maintains an
arm's-length relationship with its Affiliates and shall not enter into
any contractual obligations with any Affiliates except upon terms and
conditions that are intrinsically fair and substantially similar to
those that would be available on an arms-length basis with third
parties other than an Affiliate, (xii) does not guarantee or otherwise
obligate itself with respect to the debts of any other Person, hold
out its credit as being available to satisfy the obligations of any
other Person (except in connection with the Debt permitted pursuant to
Section 5.02(b) hereof), (xiii) does not acquire obligations or
securities of its partners, members or shareholders, (xiv) allocates
fairly and reasonably shared expenses, including, without limitation,
any
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<PAGE> 23
overhead for shared office space, (xv) does not and will not pledge
its assets for the benefit of any other Person, (xvi) does and will
correct any known misunderstanding regarding its separate identity and
(xvii) maintains adequate capital in light of its contemplated
business operations.
"SOLVENT" and "SOLVENCY" mean, with respect to any Person on
a particular date, has the meaning ascribed to such term (or any
similar term, including "Insolvency") in the Federal Bankruptcy Code
and any applicable state fraudulent conveyance laws, to include,
without limitation, the following, that on such date (a) the fair
value of the property of such Person is greater than the total amount
of liabilities, including, without limitation, contingent liabilities,
of such Person, (b) the present fair salable value of the assets of
such Person is not less than the amount that will be required to pay
the probable liability of such Person on its debts as they become
absolute and matured, (c) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person's
ability to pay such debts and liabilities as they mature and (d) such
Person is not engaged in business or a transaction, and is not about
to engage in business or a transaction, for which such Person's
property would constitute an unreasonably small capital. The amount of
contingent liabilities at any time shall be computed as the amount
that, in the light of all the facts and circumstances existing at such
time, represents the amount that can reasonably be expected to become
an actual or matured liability.
"SUBORDINATED GUARANTY" means the guaranties by the Borrower
and its Subsidiaries of the Obligations of the Parent Guarantor under
the Subordinated Notes pursuant to the Indenture.
"SUBORDINATED NOTES" means the Senior Subordinated Notes of
the Parent Guarantor due 2009 in an aggregate principal amount of
$340,000,000 issued pursuant to an Indenture dated as of April 21,
1999.
"SUBSIDIARY" of any Person means any corporation,
partnership, joint venture, limited liability company, trust or estate
of which (or in which) more than 50% of (a) the issued and outstanding
capital stock having ordinary voting power to elect a majority of the
Board of Directors of such corporation (irrespective of whether at the
time capital stock of any other class or classes of such corporation
shall or might have voting power upon the occurrence of any
contingency), (b) the interest in the capital or profits of such
limited liability company, partnership or joint venture or (c) the
beneficial interest in such trust or estate, is at the time directly
or indirectly owned or controlled by such Person, by such Person and
one or more of its other Subsidiaries or by one or more of such
Person's other Subsidiaries.
"SUBSIDIARY GUARANTORS" means all Subsidiaries of the
Borrower, including the Operating Subsidiaries, listed on Schedule
4.01(b) hereto and each other Subsidiary that shall be required to
execute and deliver a guaranty pursuant to Section 5.01(j).
"SUBSIDIARY GUARANTOR SECURITY AGREEMENT" has the meaning
specified in Section 3.01(a)(iii).
"SUBSIDIARY GUARANTY" means an amended and restated guaranty
in substantially the form of Exhibit F-2.
"SURVIVING DEBT" means Debt of the Parent Guarantor, the
Borrower and its Subsidiaries outstanding immediately before and after
the Transaction.
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<PAGE> 24
"SYNDICATION AGENT" has the meaning specified in the recital
of parties to this Agreement.
"TAX CERTIFICATE" has the meaning specified in Section
5.03(j)
"TAXES" has the meaning specified in Section 2.11(a).
"TERMINATION DATE" means the earlier of (x) May 1, 2002 and
(y) the date of termination in whole of the Commitments pursuant to
Section 2.04 or 6.01 (the "COMMITMENT TERMINATION DATE").
"TOTAL FUNDED DEBT" shall include all Debt of the Parent
Guarantor and its Subsidiaries, on a Consolidated basis, excluding (i)
all liabilities associated with the Premier Club memberships at the
Boca Raton Resort and Club and at other resort properties owned,
whether directly or indirectly, by the Parent Guarantor, in each case
determined pursuant to the membership program in effect on March 31,
1999 or any future membership program which only permits a membership
refund from fees paid for new memberships sold subsequent to the date
of the refund request.
"TOTAL REVENUES" means, for any Rolling Period, on a
Consolidated basis for the Borrowing Base Properties, the total
revenues of such Properties determined in accordance with GAAP.
"TRANSACTION" means the transactions contemplated by the
Transaction Documents.
"TRANSACTION DOCUMENTS" means, collectively, the Loan
Documents and the Related Documents.
"TYPE" refers to the distinction between Advances bearing
interest at the Base Rate and Advances bearing interest at the
Eurodollar Rate.
"UNUSED COMMITMENT" means the aggregate Commitments at any
time MINUS the aggregate principal amount of all Advances made by the
Lenders (in their capacity as Lenders) and outstanding at such time.
"VOTING INTERESTS" means shares of capital stock issued by a
corporation, or equivalent Equity Interests in any other Person, the
holders of which are ordinarily, in the absence of contingencies,
entitled to vote for the election of directors (or persons performing
similar functions) of such Person, even if the right so to vote has
been suspended by the happening of such a contingency.
"WELFARE PLAN" means a welfare plan, as defined in Section
3(1) of ERISA, that is maintained for employees of any Loan Party or
in respect of which any Loan Party could have a liability.
"WITHDRAWAL LIABILITY" has the meaning specified in Part I of
Subtitle E of Title IV of ERISA.
SECTION 1.02. COMPUTATION OF TIME PERIODS; OTHER DEFINITIONAL
PROVISIONS. In this Agreement and the other Loan Documents, in the computation
of periods of time from a specified date to a later specified date, the word
"from" means "from and including" and the words "to" and "until" each mean "to
but excluding". References in the Loan Documents to any agreement or contract
"as amended" shall mean and be a reference to such agreement or contract as
amended, amended and
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<PAGE> 25
restated, supplemented or otherwise modified from time to time in accordance
with its terms. The term "including" is not limiting and means "including
without limitation."
SECTION 1.03. ACCOUNTING TERMS. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles consistent with those applied in the preparation
of the financial statements referred to in Section 4.01(f) ("GAAP").
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. THE ADVANCES. Each Lender severally agrees, on
the terms and conditions hereinafter set forth, including the satisfaction of
the conditions precedent set forth in Section 3.02, to make advances (each, an
"ADVANCE") to the Borrower from time to time on any Business Day during the
period from the date hereof until 90 days prior to the Termination Date in an
amount for each such Advance not to exceed such Lender's Pro Rate Share of the
Unused Commitment at such time and shall not exceed for all Lenders at any time
outstanding the lesser of the Facility and the Borrowing Base Amount at such
time. Each Borrowing shall be in an aggregate amount of $5,000,000 or an
integral multiple of $250,000 in excess thereof and shall consist of Advances
made simultaneously by the Lenders in proportion to their respective Pro Rata
Shares. Within the limits of the Unused Commitments in effect from time to
time, and subject to the restrictions set forth elsewhere in this Agreement,
the Borrower may borrow under this Section 2.01, prepay pursuant to Section
2.05(a) and reborrow under this Section 2.01.
SECTION 2.02. MAKING THE ADVANCES. (a) Each Borrowing shall
be made on notice, given not later than 11:00 A.M. (New York City time) on the
third Business Day prior to the date of the proposed Borrowing by the Borrower
to the Administrative Agent, which shall give to each Lender prompt notice
thereof by telex or telecopier. Each such notice of a Borrowing (a "NOTICE OF
BORROWING") shall be in writing, or telex or telecopier, in substantially the
form of Exhibit B hereto, specifying therein the requested (i) date of such
Borrowing, (ii) Type of Advances comprising such Borrowing, (iii) aggregate
amount of such Borrowing and (iv) in the case of a Borrowing consisting of
Eurodollar Rate Advances, initial Interest Period for each such Advance. Each
Lender shall, before 11:00 A.M. (New York time) on the date of such Borrowing,
make available for the account of its Applicable Lending Office to the
Administrative Agent at the Administrative Agent's Account, in same day funds,
such Lender's Pro Rata Share of such Borrowing. After the Administrative
Agent's receipt of such funds and upon fulfillment of the applicable conditions
set forth in Article III, the Administrative Agent will make such funds
available to the Borrower by crediting the Borrower's Account.
(b) Anything in subsection (a) above to the contrary
notwithstanding, (i) the Borrower may not select Eurodollar Rate Advances or
for any Borrowing if the aggregate amount of such Borrowing is less than
$5,000,000 or if the obligation of the Lenders to make Eurodollar Rate Advances
shall then be suspended pursuant to Section 2.08 or 2.09 and (ii) no more than
five (5) Eurodollar Rate Advances shall be outstanding at any time.
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(c) Each Notice of Borrowing shall be irrevocable and binding
on the Borrower. The Borrower shall indemnify the Administrative Agent and each
Lender against any loss, cost or expense incurred by such Person as a result of
any failure to fulfill on or before the date specified in such Notice of
Borrowing for such Borrowing the applicable conditions set forth in Article
III, including, without limitation, any loss (including loss of anticipated
profits), cost or expense incurred by reason of the liquidation or reemployment
of deposits or other funds acquired by such Lender to fund the Advance to be
made by such Lender as part of such Borrowing when such Advance, as a result of
such failure, is not made on such date.
(d) Unless the Administrative Agent shall have received
notice from a Lender prior to the date of any Borrowing under the Facility
under which such Lender has a Commitment that such Lender will not make
available to the Administrative Agent such Lender's Pro Rata Share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
portion available to the Administrative Agent on the date of such Borrowing in
accordance with subsection (a) of this Section 2.02 and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower on
such date a corresponding amount. If and to the extent that such Lender shall
not have so made such Pro Rata Share available to the Administrative Agent,
such Lender and the Borrower severally agree to repay or pay to the
Administrative Agent forthwith on demand such corresponding amount and to pay
interest thereon, for each day from the date such amount is made available to
the Borrower until the date such amount is repaid or paid to the Administrative
Agent, at (i) in the case of the Borrower, the interest rate applicable at such
time under Section 2.06 to Advances comprising such Borrowing and (ii) in the
case of such Lender, the Federal Funds Rate. If such Lender shall pay to the
Administrative Agent such corresponding amount, such amount so paid in respect
of principal shall constitute such Lender's Advance as part of such Borrowing
for all purposes.
(e) The failure of any Lender to make the Advance to be made
by it as part of any Borrowing shall not relieve any other Lender of its
obligation, if any, hereunder to make its Advance on the date of such
Borrowing, but no Lender shall be responsible for the failure of any other
Lender to make the Advance to be made by such other Lender on the date of any
Borrowing.
SECTION 2.03. REPAYMENT OF ADVANCES. The Borrower shall repay
to the Administrative Agent for the account of the Lenders' Pro Rata Shares on
the Termination Date the aggregate outstanding principal amount of the Advances
then outstanding, together with all accrued interest and any other sums
outstanding under the Loan Documents.
SECTION 2.04. TERMINATION OR REDUCTION OF THE COMMITMENTS.
(a) OPTIONAL. The Borrower may, upon at least five Business Days' notice to the
Administrative Agent, terminate in whole or reduce in part the Unused
Commitments; PROVIDED, HOWEVER, that each partial reduction of the Facility (i)
shall be in an aggregate amount of $5,000,000 or an integral multiple of
$1,000,000 in excess thereof and (ii) shall be made to the Administrative Agent
and allocated to the Lenders in accordance with their respective Pro Rata
Shares.
(b) MANDATORY. The Facility shall, on the 30th day following
the date any Event of Default shall have occurred and be continuing,
automatically and permanently be reduced by the amount of any prepayment
required by Section 2.05(b)(ii).
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SECTION 2.05. PREPAYMENTS. (a) OPTIONAL. The Borrower may, upon at
least three Business Day's prior written notice to the Administrative Agent
(received not later than 12:00 P.M. (New York City time)) stating the proposed
date, aggregate principal amount of the prepayment and the outstanding
Borrowings to which the Borrower proposes to apply such prepayment, and if such
notice is given the Borrower shall, prepay all or any portion of the
outstanding aggregate principal amount of the Advances to the Administrative
Agent and allocated to the Lenders in accordance with their respective Pro Rata
Shares; PROVIDED, HOWEVER, that each partial prepayment shall be in an
aggregate principal amount of $2,000,000 or an integral multiple of $250,000 in
excess thereof.
(b) MANDATORY. (i) If at any time the aggregate amount of the
Advances then outstanding shall exceed the lesser of the Facility and the
Borrowing Base Amount (as limited by the Intangible Tax Reserve), and the
Administrative Agent shall have so notified the Borrower, the Borrower shall
prepay an aggregate principal amount of the Advances equal to the amount by
which (A) the sum of the aggregate principal amount of the Advances then
outstanding exceeds (B) the lesser of the Facility and the Borrowing Base
Amount (as limited by the Intangible Tax Reserve).
(ii) So long as any Event of Default shall have occurred and
be continuing, all payments in respect of the Borrowing Base Properties and all
other income related thereto shall be swept daily into the Lockbox Account in
accordance with Section 2.15 hereof and applied in accordance with Section
2.15.
(c) ACCRUED INTEREST, ETC. All prepayments under this Section
2.05 shall be made together with (i) accrued interest to the date of such
prepayment on the principal amount prepaid and, (ii) if any prepayment of a
Eurodollar Rate Advance shall be made other than on the last day of an Interest
Period therefor, any amounts owing pursuant to Section 8.04(c).
SECTION 2.06. INTEREST. (a) SCHEDULED INTEREST. The Borrower shall pay
interest on the unpaid principal amount of each Advance owing to each Lender
from the date of such Advance until such principal amount shall be paid in
full, at the following rates per annum:
(i) BASE RATE ADVANCES. During such periods as such Advance
is a Base Rate Advance, a rate per annum equal at all times to the sum
of the Base Rate PLUS the Applicable Margin, payable in arrears
monthly on the first day of each month.
(ii) EURODOLLAR RATE ADVANCES. During such periods as such
Advance is a Eurodollar Rate Advance, a rate per annum equal at all
times during each Interest Period for such Advance to the sum of the
Eurodollar Rate for such Interest Period for such Advance PLUS the
Applicable Margin, payable in arrears on the last day of such Interest
Period and, if such Interest Period has a duration of more than three
months, on each day that occurs during such Interest Period every
three months from the first day of such Interest Period and on the
date such Eurodollar Rate Advance shall be Converted or paid in full.
(b) DEFAULT INTEREST. Upon the occurrence and during the
continuance of any Default the Administrative Agent may, and upon the request
of the Required Lenders shall, require that the Borrower pay interest on (i)
the unpaid principal amount of each Advance owing to each Lender, payable in
arrears on the dates referred to in clause (a)(i) or (a)(ii) above and, in
addition, on demand, at a rate per annum equal at all times to 2% per annum
above the rate per annum required to be paid
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<PAGE> 28
on such Advance pursuant to clause (a)(i) or (a)(ii) above and (ii) to the
fullest extent permitted by law, the amount of any interest, fee or other
amount payable under the Loan Documents that is not paid when due, from the
date such amount shall be due until such amount shall be paid in full, payable
in arrears on the date such amount shall be paid in full and on demand, at a
rate per annum equal at all times to 2% per annum above the rate per annum
required to be paid, in the case of interest, on the Type of Advance on which
such interest has accrued pursuant to clause (a)(i) or (a)(ii) above and, in
all other cases, on Base Rate Advances pursuant to clause (a)(i) above;
provided, however, that following acceleration of the Advances pursuant to
Section 6.01, interest shall accrue and be payable at the rate required by this
Section 2.06(b), whether or not requested by the Administrative Agent or the
Required Lenders.
SECTION 2.07. FEES. (a) UNUSED COMMITMENT FEE. The Borrower shall pay
to the Administrative Agent for the account of the Lenders an unused commitment
fee, from the date of this Agreement in the case of each Initial Lender and
from the effective date specified in the Assignment and Acceptance pursuant to
which it became a Lender in the case of each other Lender, in each case until
the Termination Date, payable in arrears monthly on the first day of each
month, commencing May 1, 1999, and on the Termination Date, at the rate of .50%
per annum on the average daily Unused Commitment of such Lender or, if
aggregate Advances exceed 50% of the Commitments, .40% per annum PROVIDED,
HOWEVER, that any commitment fee accrued with respect to any of the Commitments
of a Defaulting Lender during the period prior to the time such Lender became a
Defaulting Lender and unpaid at such time shall not be payable by the Borrower
so long as such Lender shall be a Defaulting Lender except to the extent that
such commitment fee shall otherwise have been due and payable by the Borrower
prior to such time; and PROVIDED FURTHER, HOWEVER, that no commitment fee shall
accrue on any of the Commitments of a Defaulting Lender so long as such Lender
shall be a Defaulting Lender.
(b) FEES TO AGENTS. The Borrower shall pay to the Agents and
BT Alex. Brown Incorporated for their own account such fees as may from time to
time be agreed between the Borrower and each of them.
SECTION 2.08. CONVERSION OF ADVANCES. (a) OPTIONAL. The Borrower may
on any Business Day, upon notice given to the Administrative Agent not later
than 11:00 A.M. (New York City time) on the third Business Day prior to the
date of the proposed Conversion and subject to the provisions of Section 2.09,
Convert all or any portion of the Advances of one Type comprising the same
Borrowing into Advances of the other Type; PROVIDED, HOWEVER, that if any
Conversion of Eurodollar Rate Advances into Base Rate Advances is made other
than on the last day of an Interest Period for such Eurodollar Rate Advances
the Borrower shall also pay any amounts owing pursuant to Section 8.04(c), (x)
any Conversion of Base Rate Advances into Eurodollar Rate Advances shall be in
an amount not less than the minimum amount specified in Section 2.02(b), (y) no
Conversion of any Advances shall result in more separate Borrowings than
permitted under Section 2.02(b) and (z) each Conversion of Advances comprising
part of the same Borrowing under the Facility shall be made ratably among the
Lenders in accordance with their Pro Rata Share under the Facility. Each such
notice of Conversion shall, within the restrictions specified above, specify
(i) the date of such Conversion, (ii) the Advances to be Converted and (iii) if
such Conversion is into Eurodollar Rate Advances, the duration of the initial
Interest Period for such Advances. Each notice of Conversion shall be
irrevocable and binding on the Borrower.
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(b) MANDATORY. (i) On the date on which the aggregate unpaid
principal amount of Eurodollar Rate Advances comprising any Borrowing shall be
reduced, by payment or prepayment or otherwise, to less than $5,000,000, such
Advances shall automatically Convert into Base Rate Advances.
(ii) If the Borrower shall fail to select the duration of any
Interest Period for any Eurodollar Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" in Section 1.01,
the Administrative Agent will forthwith so notify the Borrower and the Lenders,
whereupon each such Eurodollar Rate Advance will automatically, on the last day
of the then existing Interest Period therefor, Convert into a new Eurodollar
Rate Advance with an Interest Period of one month unless the Administrative
Agent has received notice from the Borrower not less that three days prior to
the last day of the then existing Interest Period.
(iii) Upon the occurrence and during the continuance of any
Event of Default and upon notice from the Administrative Agent to the Borrower,
(x) each Eurodollar Rate Advance will automatically, on the last day of the
then existing Interest Period therefor (or immediately at the option of the
Administrative Agent and subject to Section 8.04(c)), Convert into a Base Rate
Advance and (y) the obligation of the Lenders to make, or to Convert Advances
into, Eurodollar Rate Advances shall be suspended.
SECTION 2.09. INCREASED COSTS, ETC. (a) If, due to either (i) the
introduction of or any change in or in the interpretation of any law or
regulation or (ii) the compliance with any guideline or request from any
central bank or other governmental authority (whether or not having the force
of law), there shall be any increase in the cost to any Lender Party of
agreeing to make or of making, funding or maintaining Eurodollar Rate Advances
(excluding, for purposes of this Section 2.09, any such increased costs
resulting from (x) Taxes or Other Taxes (as to which Section 2.11 shall govern)
and (y) changes in the basis of taxation of overall net income or overall gross
income by the United States or by the foreign jurisdiction or state under the
laws of which such Lender Party is organized or has its Applicable Lending
Office or any political subdivision thereof), then the Borrower shall from time
to time, upon demand by such Lender Party (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the account of such
Lender Party additional amounts sufficient to compensate such Lender Party for
such increased cost; provided, however, that a Lender Party claiming additional
amounts under this Section 2.09(a) agrees to use reasonable efforts (consistent
with its internal policy and legal and regulatory restrictions) to designate a
different Applicable Lending Office if the making of such a designation would
avoid the need for, or reduce the amount of, such increased cost that may
thereafter accrue and would not, in the reasonable judgment of such Lender
Party, be otherwise disadvantageous to such Lender Party. A certificate as to
the amount of such increased cost, submitted to the Borrower by such Lender
Party, shall be conclusive and binding for all purposes, absent manifest error.
(b) If any Lender Party determines that compliance with any
law or regulation or any guideline or request from any central bank or other
governmental authority (whether or not having the force of law) affects or
would affect the amount of capital required or expected to be maintained by
such Lender Party or any corporation controlling such Lender Party and that the
amount of such capital is increased by or based upon the existence of such
Lender Party's commitment to lend, then, upon demand by such Lender Party (with
a copy of such demand to the Administrative Agent), the Borrower shall pay to
the Administrative Agent for the account of such Lender Party, from time to
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time as specified by such Lender Party, additional amounts sufficient to
compensate such Lender Party in the light of such circumstances, to the extent
that such Lender Party reasonably determines such increase in capital to be
allocable to the existence of such Lender Party's commitment to lend. A
certificate as to such amounts submitted to the Borrower by such Lender Party
shall be conclusive and binding for all purposes, absent manifest error.
(c) If, with respect to any Eurodollar Rate Advances under
the Facility, Lenders owed at least 50% of the then aggregate unpaid principal
amount thereof notify the Administrative Agent that the Eurodollar Rate for any
Interest Period for such Advances will not adequately reflect the cost to such
Lenders of making, funding or maintaining their Eurodollar Rate Advances for
such Interest Period, the Administrative Agent shall forthwith so notify the
Borrower and the Lenders, whereupon (i) each such Eurodollar Rate Advance will
automatically, on the last day of the then existing Interest Period therefor,
Convert into a Base Rate Advance and (ii) the obligation of the Lenders to
make, or to Convert Advances into, Eurodollar Rate Advances shall be suspended
until the Administrative Agent shall notify the Borrower that such Lenders have
determined that the circumstances causing such suspension no longer exist.
(d) Notwithstanding any other provision of this Agreement, if
the introduction of or any change in or in the interpretation of any law or
regulation shall make it unlawful, or any central bank or other governmental
authority shall assert that it is unlawful, for any Lender or its Eurodollar
Lending Office to perform its obligations hereunder to make Eurodollar Rate
Advances or to continue to fund or maintain Eurodollar Rate Advances hereunder,
then, on notice thereof and demand therefor by such Lender to the Borrower
through the Administrative Agent, (i) each Eurodollar Rate Advance will
automatically, upon such demand, Convert into a Base Rate Advance and (ii) the
obligation of the Lenders to make, or to Convert Advances into, Eurodollar Rate
Advances shall be suspended until the Administrative Agent shall notify the
Borrower that such Lender has determined that the circumstances causing such
suspension no longer exist; provided, however, that, before making any such
demand, such Lender agrees to use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to designate a different
Eurodollar Lending Office if the making of such a designation would allow such
Lender or its Eurodollar Lending Office to continue to perform its obligations
to make Eurodollar Rate Advances or to continue to fund or maintain Eurodollar
Rate Advances and would not, in the judgment of such Lender, be otherwise
disadvantageous to such Lender.
SECTION 2.10. PAYMENTS AND COMPUTATIONS. (a) The Borrower shall make
each payment hereunder and under the Notes, irrespective of any right of
counterclaim or set-off, not later than 12:00 P.M. (New York City time) on the
day when due in U.S. dollars to the Administrative Agent at the Administrative
Agent's Account in same day funds, with payments being received by the
Administrative Agent after such time being deemed to have been received on the
next succeeding Business Day. The Administrative Agent will promptly thereafter
cause like funds to be distributed (i) if such payment by the Borrower is in
respect of principal, interest, commitment fees or any other Obligation then
payable hereunder or under the Notes, ratably in accordance with the Pro Rata
Share of such Obligations then payable and (ii) if such payment by the Borrower
is in respect of any fees or expenses payable to the Agents or BT Alex. Brown
Incorporated for their own account and not to any Lender Party (in its capacity
as a Lender hereunder), to such Persons as they may instruct, in each case to
be applied in accordance with the terms of this Agreement or the Fee Letters,
as applicable. Upon its acceptance of an Assignment and Acceptance and
recording of the information contained therein in
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the Register pursuant to Section 8.07(d), from and after the effective date of
such Assignment and Acceptance, the Administrative Agent shall make all
payments hereunder and under the Notes in respect of the interest assigned
thereby to the Lender Party assignee thereunder, and the parties to such
Assignment and Acceptance shall make all appropriate adjustments in such
payments for periods prior to such effective date directly between themselves.
(b) If the Administrative Agent receives funds for
application to the Obligations under the Loan Documents under circumstances for
which the Loan Documents do not specify the Advances or the manner in which,
such funds are to be applied, the Administrative Agent may, but shall not be
obligated to, elect to distribute such funds to each Lender Party ratably in
accordance with such Lender Party's Pro Rata Share of the principal amount of
all outstanding Advances, in repayment or prepayment of such of the outstanding
Advances or other Obligations owed to such Lender Party, and for application to
such principal installments, as the Administrative Agent shall direct.
(c) All computations of interest, fees and commissions shall
be made by the Administrative Agent on the basis of a year of 360 days, in each
case for the actual number of days (including the first day but excluding the
last day) occurring in the period for which such interest, fees or commissions
are payable. Each determination by the Administrative Agent of an interest
rate, fee or commission hereunder shall be conclusive and binding for all
purposes, absent manifest error.
(d) Whenever any payment hereunder or under the Notes shall
be stated to be due on a day other than a Business Day, such payment shall be
made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of payment of interest or commitment
fee, as the case may be; PROVIDED, HOWEVER, that, if such extension would cause
any payment to be made in the next following calendar month, such payment shall
be made on the next preceding Business Day and such adjustment of time shall in
such case be reflected in the computation of payment of interest or commitment
fee, as the case may be.
(e) Unless the Administrative Agent shall have received
notice from the Borrower prior to the date on which any payment is due to any
Lender Party hereunder that the Borrower will not make such payment in full,
the Administrative Agent may assume that the Borrower has made such payment in
full to the Administrative Agent on such date and the Administrative Agent may,
in reliance upon such assumption, cause to be distributed to each such Lender
Party on such due date an amount equal to the amount then due such Lender
Party. If and to the extent the Borrower shall not have so made such payment in
full to the Administrative Agent, each such Lender Party shall repay to the
Administrative Agent forthwith on demand such amount distributed to such Lender
Party together with interest thereon, for each day from the date such amount is
distributed to such Lender Party until the date such Lender Party repays such
amount to the Administrative Agent, at the Federal Funds Rate.
SECTION 2.11. TAXES. (a) Any and all payments by the Borrower
hereunder or under the Notes shall be made, in accordance with Section 2.10,
free and clear of and without deduction for any and all present or future
taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, EXCLUDING, in the case of each Lender Party
and the Administrative Agent, taxes that are imposed on its overall net income
by the United States and taxes that are imposed on its overall net income (and
franchise taxes imposed in lieu thereof) by the state or foreign jurisdiction
under the laws of which such Lender Party or the Administrative Agent (as the
case may be) is organized or any political subdivision thereof and, in the case
of each Lender Party, taxes that are
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imposed on its overall net income (and franchise taxes in lieu thereof) by the
state or foreign jurisdiction of such Lender Party's Applicable Lending Office
or any political subdivision thereof (all such non-excluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities in respect of
payments hereunder or under the Notes being hereinafter referred to as
"TAXES"). If the Borrower shall be required by law to deduct any Taxes from or
in respect of any sum payable hereunder or under the Notes to any Lender Party
or the Administrative Agent, (i) the sum payable by the Borrower shall be
increased as may be necessary so that after the Borrower and the Administrative
Agent have made all required deductions (including deductions applicable to
additional sums payable under this Section 2.11) such Lender Party or the
Administrative Agent, as the case may be, receives an amount equal to the sum
it would have received had no such deductions been made, (ii) the Borrower
shall make all such deductions and (iii) the Borrower shall pay the full amount
deducted to the relevant taxation authority or other governmental authority in
accordance with applicable law.
(b) In addition, the Borrower shall pay any present or future
stamp, documentary, excise, property or similar taxes, charges or levies that
arise from any payment made hereunder or under the Notes or from the execution,
delivery or registration of, performance under, or otherwise with respect to
this Agreement or the Notes (hereinafter referred to as "OTHER TAXES").
(c) The Borrower shall indemnify each Lender Party and the
Administrative Agent for and hold it harmless against the full amount of Taxes
and Other Taxes, and for the full amount of taxes of any kind imposed by any
jurisdiction on amounts payable under this Section 2.11, imposed on or paid by
such Lender Party or the Administrative Agent (as the case may be) and any
liability (including penalties, additions to tax, interest and expenses)
arising therefrom or with respect thereto. This indemnification shall be made
within 10 days from the date such Lender Party or the Administrative Agent (as
the case may be) makes written demand therefor.
(d) Within 10 days after the date of any payment of Taxes,
the Borrower shall furnish to the Administrative Agent, at its address referred
to in Section 8.02, the original or a certified copy of a receipt evidencing
such payment. In the case of any payment hereunder or under the Notes by or on
behalf of the Borrower through an account or branch outside the United States
or on behalf of the Borrower by a payor that is not a United States person, if
the Borrower determines that no Taxes are payable in respect thereof, the
Borrower shall furnish, or shall cause such payor to furnish, to the
Administrative Agent, at such address, an opinion of counsel acceptable to the
Administrative Agent stating that such payment is exempt from Taxes. For
purposes of subsections (d) and (e) of this Section 2.11, the terms "UNITED
STATES" and "UNITED STATES PERSON" shall have the meanings specified in Section
7701 of the Internal Revenue Code.
(e) Each Lender Party organized under the laws of a
jurisdiction outside the United States shall, on or prior to the date of its
execution and delivery of this Agreement in the case of each Initial Lender,
and on the date of the Assignment and Acceptance pursuant to which it becomes a
Lender Party in the case of each other Lender Party, and from time to time
thereafter if requested in writing by the Borrower or the Administrative Agent
(but only so long thereafter as such Lender Party remains lawfully able to do
so), provide the Administrative Agent and the Borrower with two original
Internal Revenue Service forms 1001 or 4224 or (in the case of a Lender Party
that has certified in writing to the Administrative Agent that it is not a
"bank" as defined in Section 881(c)(3)(A) of the Internal Revenue Code) form
W-8 (and, if such Lender Party delivers a form W-8, a certificate representing
that such Lender Party is not a "bank" for purposes of Section 881(c) of the
Internal
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Revenue Code, is not a 10-percent shareholder (within the meaning of Section
871(h)(3)(B) of the Internal Revenue Code) of the Borrower and is not a
controlled foreign corporation related to the Borrower (within the meaning of
Section 864(d)(4) of the Internal Revenue Code)), as appropriate, or any
successor or other form prescribed by the Internal Revenue Service, certifying
that such Lender Party is exempt from or entitled to a reduced rate of United
States withholding tax on payments pursuant to this Agreement or the Notes or,
in the case of a Lender Party providing a form W-8, certifying that such Lender
Party is a foreign corporation, partnership, estate or trust. If the forms
provided by a Lender Party at the time such Lender Party first becomes a party
to this Agreement indicate a United States interest withholding tax rate in
excess of zero, withholding tax at such rate shall be considered excluded from
Taxes unless and until such Lender Party provides the appropriate forms
certifying that a lesser rate applies, whereupon withholding tax at such lesser
rate only shall be considered excluded from Taxes for periods governed by such
forms; PROVIDED, HOWEVER, that if, at the effective date of the Assignment and
Acceptance pursuant to which a Lender Party becomes a party to this Agreement,
the Lender Party assignor was entitled to payments under subsection (a) of this
Section 2.11 in respect of United States withholding tax with respect to
interest paid at such date, then, to such extent, the term Taxes shall include
(in addition to withholding taxes that may be imposed in the future or other
amounts otherwise includable in Taxes) United States withholding tax, if any,
applicable with respect to the Lender Party assignee on such date. If any form
or document referred to in this subsection (e) requires the disclosure of
information, other than information necessary to compute the tax payable and
information required on the date hereof by Internal Revenue Service form 1001,
4224 or W-8 (or the related certificate described above), that the Lender Party
reasonably considers to be confidential, the Lender Party shall give notice
thereof to the Borrower and shall not be obligated to include in such form or
document such confidential information.
(f) For any period with respect to which a Lender Party has
failed to provide the Borrower with the appropriate form described in
subsection (e) above (OTHER THAN if such failure is due to a change in law
occurring after the date on which a form originally was required to be provided
or if such form otherwise is not required under subsection (e) above), such
Lender Party shall not be entitled to indemnification under subsection (a) or
(c) of this Section 2.11 with respect to Taxes imposed by the United States by
reason of such failure; PROVIDED, HOWEVER, that should a Lender Party become
subject to Taxes because of its failure to deliver a form required hereunder,
the Borrower shall take such steps as such Lender Party shall reasonably
request to assist such Lender Party to recover such Taxes.
SECTION 2.12. SHARING OF PAYMENTS, ETC. If any Lender Party shall
obtain at any time any payment (whether voluntary, involuntary, through the
exercise of any right of set-off, or otherwise (including pursuant to Section
8.05, but other than as a result of an assignment pursuant to Section 8.07) (a)
on account of Obligations due and payable to such Lender Party hereunder and
under the Notes at such time in excess of Pro Rata Share (according to the
proportion of (i) the amount of such Obligations due and payable to such Lender
Party at such time to (ii) the aggregate amount of the Obligations due and
payable to all Lender Parties hereunder and under the Notes at such time) of
payments on account of the Obligations due and payable to all Lender Parties
hereunder and under the Notes at such time obtained by all the Lender Parties
at such time or (b) on account of Obligations owing (but not due and payable)
to such Lender Party hereunder and under the Notes at such time in excess of
its Pro Rata Share (according to the proportion of (i) the amount of such
Obligations owing (but not due and payable) to such Lender Party at such time
to (ii) the aggregate amount of the Obligations owing (but not due and payable)
to all Lender Parties hereunder and under the Notes at
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such time), such Lender Party shall forthwith purchase from the other Lender
Parties such interests or participating interests in the Obligations due and
payable or owing to them, as the case may be, as shall be necessary to cause
such purchasing Lender Party to share the excess payment ratably with each of
them; PROVIDED, HOWEVER, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender Party, such purchase from each
other Lender Party shall be rescinded and such other Lender Party shall repay
to the purchasing Lender Party the purchase price to the extent of such Lender
Party's Pro Rata Share (according to the proportion of (i) the purchase price
paid to such Lender Party to (ii) the aggregate purchase price paid to all
Lender Parties) of such recovery together with an amount equal to such Lender
Party's Pro Rata Share (according to the proportion of (i) the amount of such
other Lender Party's required repayment to (ii) the total amount so recovered
from the purchasing Lender Party) of any interest or other amount paid or
payable by the purchasing Lender Party in respect of the total amount so
recovered. The Borrower agrees that any Lender Party so purchasing an interest
or participating interest from another Lender Party pursuant to this Section
2.12 may, to the fullest extent permitted by law, exercise all its rights of
payment (including the right of set-off) with respect to such interest or
participating interest, as the case may be, as fully as if such Lender Party
were the direct creditor of the Borrower in the amount of such interest or
participating interest, as the case may be.
SECTION 2.13. USE OF PROCEEDS. The proceeds of the Advances shall be
available solely to finance capital improvements, repay existing indebtedness,
acquire first class, full service hotels, provide working capital and for
general corporate purposes of the Borrower, the Subsidiary Guarantors and the
Parent Guarantor, but shall not be used for the payment of dividends by the
Parent Guarantor.
SECTION 2.14. EVIDENCE OF DEBT. (a) The Borrower agrees that upon
notice by any Lender Party to the Borrower (with a copy of such notice to the
Administrative Agent) to the effect that a promissory note or other evidence of
indebtedness is required or appropriate in order for such Lender Party to
evidence (whether for purposes of pledge, enforcement or otherwise) the
Advances owing to, or to be made by, such Lender Party, the Borrower shall
promptly execute and deliver to such Lender Party, with a copy to the
Administrative Agent, a Note, in substantially the form of Exhibit A hereto,
payable to the order of such Lender Party in the face principal amount equal to
the Commitment of such Lender Party. Each Lender shall be permitted only one
Note for the full amount of its Commitment. All references to Notes in the Loan
Documents shall mean Notes, if any, to the extent issued hereunder.
(b) The Register maintained by the Administrative Agent
pursuant to Section 8.07(d) shall include a control account, and a subsidiary
account for each Lender, in which accounts (taken together) shall be recorded
(i) the date and amount of each Borrowing made hereunder, the Type of Advances
comprising such Borrowing and, if appropriate, the Interest Period applicable
thereto, (ii) the terms of each Assignment and Acceptance delivered to and
accepted by it, (iii) the amount of any principal or interest due and payable
or to become due and payable from the Borrower to each Lender Party hereunder,
and (iv) the amount of any sum received by the Administrative Agent from the
Borrower hereunder and each Lender Party's share thereof.
(c) Entries made in good faith by the Administrative Agent in
the Register pursuant to subsection (b) above, and by each Lender Party in its
account or accounts pursuant to subsection (a) above, shall be PRIMA FACIE
evidence of the amount of principal and interest due and payable or to become
due and payable from the Borrower to, in the case of the Register, each Lender
Party and, in
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the case of such account or accounts, such Lender Party, under this Agreement,
absent manifest error; PROVIDED, HOWEVER, that the failure of the
Administrative Agent or such Lender Party to make an entry, or any finding that
an entry is incorrect, in the Register or such account or accounts shall not
limit or otherwise affect the obligations of the Borrower under this Agreement.
SECTION 2.15. CASH MANAGEMENT. (a) The Borrower and the Operating
Subsidiaries have established and shall maintain (i) an operating account with
respect to each of the Borrowing Base Properties, (ii) to the extent there is
insufficient Unused Commitments to fully fund the FF&E Reserve, an FF&E Reserve
account (the "FF&E RESERVE ACCOUNT") (collectively, "HOTEL ACCOUNTS") and (iii)
in the Event of Default, a lockbox (the "LOCKBOX") and a Lockbox Account at the
offices of the Administrative Agent (the "LOCKBOX ACCOUNT"). The Hotel Accounts
shall be established with a bank reasonably acceptable to the Administrative
Agent ("HOTEL ACCOUNT BANK"). The Borrower and the Operating Subsidiaries shall
cause all revenues of the Borrowing Base Properties and all other income of the
Borrower and the Operating Subsidiaries to be deposited daily into the
applicable operating account and, to the extent required hereunder, the
applicable FF&E Reserve account. The Borrower and the Operating Subsidiaries
shall have delivered to the Hotel Account Bank and to credit card companies
instructions, pursuant to which the recipients thereof have been instructed to
transfer the funds then on deposit in the Hotel Accounts and to make all
payments, respectively, directly into the Lockbox Account upon notice from the
Administrative Agent that an Event of Default has occurred hereunder.
(b) Unless and until an Event of Default has occurred
hereunder, the Borrower and the Operating Subsidiaries have the right to direct
withdrawals from the Hotel Accounts. In the Event of Default, the Borrower and
the Operating Subsidiaries shall direct all account debtors of the Borrower and
its Subsidiaries to remit all payments in respect of the Borrowing Base
Properties and all other income directly to the Lockbox or the Lockbox Account
and shall cause the Hotel Account Bank to sweep daily into the Lockbox Account
all amounts in the Hotel Accounts. The contents of each Lockbox shall
automatically be deposited into the Lockbox Account or shall be emptied and
deposited into the Lockbox Account by a representative of the Administrative
Agent. Only the Administrative Agent shall have power of withdrawal from the
Lockbox and the Lockbox Account and the Borrower and its Subsidiaries
acknowledge that the Borrower and its Subsidiaries shall not have any control
over such Lockbox or Lockbox Account or any items deposited therein. Funds on
deposit in the Lockbox Account shall be disbursed by the Administrative Agent
from time to time into the applicable Hotel Account, or directly to the payee,
in either case to the extent required to pay any real property taxes or
assessments and insurance premiums then owing in respect of any of the
Borrowing Base Properties. The Administrative Agent shall have the right to
apply any other funds so on deposit against any then outstanding Obligation
hereunder, and otherwise as the Administrative Agent may determine in its
discretion.
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ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. CONDITIONS PRECEDENT TO CLOSING DATE. The obligation of
each Lender to make an Advance on the occasion of the Closing Date hereunder is
subject to the satisfaction of the following conditions precedent before or
concurrently with the Closing Date:
(a) The Agents shall have received on or before the day of
the Closing Date the following, each dated such day (unless otherwise
specified), in form and substance satisfactory to the Agents (unless
otherwise specified) and (except for the Notes) in sufficient copies
for each Lender Party:
(i) Notes payable to the order of the Lenders.
(ii) A Notice of Borrowing and a Borrowing Base
Certificate relating to the Closing Date.
(iii) A security agreement in substantially the form
of Exhibit D-1 hereto (as amended, amended and restated,
supplemented or otherwise modified from time to time in
accordance with its terms, the "SUBSIDIARY GUARANTOR SECURITY
AGREEMENT"), duly executed by the Borrower and each
Subsidiary Guarantor, and a security agreement in
substantially the form of Exhibit D-2 hereto (as amended,
amended and restated, supplemented or otherwise modified from
time to time in accordance with its terms) duly executed by
the Parent Guarantor (the "PARENT GUARANTOR SECURITY
AGREEMENT"), together with:
(A) certificates representing the Pledged
Shares accompanied by undated stock powers executed
in blank and instruments evidencing the Pledged
Debt, if any, indorsed in blank,
(B) executed copies of proper financing
statements under the Uniform Commercial Code of the
States of all jurisdictions that the Administrative
Agent may deem necessary or desirable in order to
perfect and protect the Liens created under the
Collateral Documents, covering the Collateral
described in the Security Agreements,
(C) completed requests for information,
dated on or before the date of the Closing Date,
listing the financing statements referred to in
clause (B) above and all other effective financing
statements filed in the jurisdictions referred to in
clause (B) above that name any Loan Party or any of
its Subsidiaries as debtor, together with copies of
such other financing statements,
(D) evidence of the completion of all other
recordings and filings of or with respect to the
Security Agreements that the Agents may deem
necessary or desirable in order to perfect and
protect the Liens created thereby,
(E) copies of the Assigned Agreements, if
any, referred to in the Security Agreements,
together with a consent to such assignment, in
substantially the form of Exhibit C to the Security
Agreements, duly executed by each party to such
Assigned Agreements other than the Loan Parties,
(F) executed termination statements (Form
UCC-3 or a comparable form), in proper form to be
duly filed on the date of the Closing Date under the
Uniform
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Commercial Code of all jurisdictions that the Agents
may deem desirable in order to terminate or amend
existing Liens on the Collateral described in the
Security Agreements,
(G) the Blocked Account Letters referred to
in the Security Agreements, duly executed by each
Blocked Account Bank listed on Schedule
3.01(a)(iii)(G) in form and substance satisfactory
to the Agents, and
(H) evidence that all other action that the
Agents may deem necessary or desirable in order to
perfect and protect the liens and security interests
created under the Security Agreements has been
taken.
(iv) Cancellations, in form and substance
satisfactory to the Agents, of Mortgages from The Chase
Manhattan Bank relating to the two unrecorded mortgages held
in escrow by said bank in respect of Pier 66 and the Boca
Raton Resort and Club, and terminations of those other loan
instruments in favor of The Chase Manhattan Bank that are not
assigned pursuant to Section 3.01(a)(v) below.
(v) Other than as contemplated by subsection (iv) of
this Section 3.01(a), assignments from The Chase Manhattan
Bank to the Administrative Agent of the documents evidencing,
securing or relating (other than the Credit Agreement) to the
existing $220,000,000 term loan facility from The Chase
Manhattan Bank to the Parent Guarantor and the assumption
thereof by the Borrower, in form and substance satisfactory
to the Agents.
(vi) The Subsidiary Guaranty duly executed by each
Subsidiary Guarantor listed on Schedule 3.01(a)(vi).
(vii) Amended and Restated Mortgages in
substantially the form of Exhibit E hereto and covering the
Borrowing Base Properties (as amended, amended and restated,
supplemented or otherwise modified from time to time in
accordance with their terms, the "MORTGAGES"), duly executed
by the appropriate Loan Party, together with:
(A) fully paid American Land Title
Association Lender's title insurance policies (the
"MORTGAGEE TITLE INSURANCE POLICIES") in form and
substance, with endorsements and in amount
acceptable to the Agents, issued by Chicago Title
Insurance Company, insuring the Mortgages as of the
time of the Closing Date to be valid first and
subsisting Liens on the property described therein,
free and clear of all defects (including, but not
limited to, mechanics' and materialmen's Liens) and
encumbrances, excepting only those exceptions to
title approved by the Agents, and providing for
omission of standard exceptions (including the
survey exception) and for such affirmative insurance
(including endorsements for future advances under
the Loan Documents, Form 9 and for mechanics' and
materialmen's Liens) and such coinsurance and direct
access reinsurance as the Agents may deem necessary
or desirable,
(B) Surveys, in form and substance
acceptable to the Agents, dated not more than 150
days before the Closing Date and the Borrower will
obtain surveys redated to a date within 10 days of
the Closing Date pursuant to a visual inspection,
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and recertified by a duly licensed Florida land
surveyor to the Administrative Agent in the form of
Exhibit K hereto (other than in respect of building
height and actual location of non-visible
underground utility installations), for each of the
Bahia Mar, Edgewater and Pier 66 properties, and an
"affidavit of no change" from the as-built survey
filed of record with the condominium declaration
documents for the Registry,
(C) an appraisal of each of the Borrowing
Base Properties which appraisals shall be from a
Person acceptable to the Agents and otherwise in
form and substance satisfactory to the Agents,
(D) environmental, engineering, soils and
other reports as to the Borrowing Base Properties,
in form and substance and from professional firms
acceptable to the Agents,
(E) such consents and agreements of
lessors, ground lessors and other third parties,
including an estoppel certificate executed by the
Bahia Mar ground lessor and other confirmations, as
the Agents may deem necessary or desirable,
(F) A copy of the rent roll for each
Borrowing Base Property certified by the applicable
Operating Subsidiary in the form attached hereto as
Exhibit L, and.
(G) Notice to tenants under each lease
affecting the Borrowing Base Properties, in the form
attached hereto as Exhibit M.
(H) Letters, in form and substance
satisfactory to the Agents from the Applicable
municipal authorities, evidencing compliance by each
Borrowing Base Property with the underlying zoning
for such property.
(I) Subordination, Non-disturbance and
Attornment Agreements with respect to the Registry
leases to Jerome Grove and McGrath & Carulli.
(viii) An Environmental Indemnity Agreement in
substantially the form of Exhibit N hereto (as amended,
amended and restated, supplemented or otherwise modified from
time to time in accordance with its terms, the "ENVIRONMENTAL
INDEMNITY AGREEMENT"), duly executed by each Indemnitor (as
defined in the Environmental Indemnity Agreement).
(ix) Certified copies of the resolutions of the
board of directors (or persons performing similar functions)
of each Loan Party approving the Transaction and each
Transaction Document to which it is or is to be a party, and
of all documents evidencing other necessary corporate,
limited partnership or limited liability company action and
governmental approvals, if any, with respect to the
Transaction and each Transaction Document to which it is or
is to be a party and of the transactions contemplated hereby.
(x) A copy of a certificate of the Secretary of
State (or equivalent governmental authority) of the
jurisdiction of organization of each Loan Party, dated
reasonably near the date of the Closing Date, in each case
listing the charter of each Loan Party and each amendment
thereto on file in such office and certifying that (A) such
charter is a true and correct copy
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thereof, (B) such amendments are the only amendments to such
charter (or similar organizational documents) on file in his
office, (C) such Person has paid all franchise taxes (or the
equivalent thereof) to the date of such certificate and (D)
such Person is duly organized and in good standing under the
laws of the State of the jurisdiction of its organization.
(xi) A copy of a certificate of the Secretary of
State (or the equivalent governmental authority) of the
States listed on Schedule 3.01(a)(xi), dated reasonably near
the date of the Closing Date, with respect to each Loan Party
as listed on Schedule 3.01(a)(xi), stating that such Person
is duly qualified and in good standing as a foreign
corporation, limited partnership or limited liability company
in such States and has filed all annual reports required to
be filed to the date of such certificate.
(xii) A certificate of each Loan Party, signed on
behalf of each such Person by its Vice-President/chief
financial officer and its Secretary, dated the date of the
Closing Date (the statements made in such certificate shall
be true on and as of the date of the Closing Date),
certifying as to (A) the absence of any amendments to the
charter (or similar organizational document) of such Person
since the date of the Secretary of State's (or equivalent
governmental authority's) certificate referred to in Section
3.01(a)(x), (B) a true and correct copy of the bylaws (or
similar organizational document) of such Person as in effect
on the date on which the resolutions referred to in Section
3.01(a)(ix) were adopted and on the date of the Closing Date,
(C) the due incorporation and good standing or valid
existence of such Person as a corporation, limited
partnership or limited liability company organized under the
laws of the jurisdiction of its organization and the absence
of any proceeding for the dissolution or liquidation of such
Person, (D) the completeness and accuracy of the
representations and warranties contained in the Loan
Documents as though made on and as of the date of the Closing
Date and (E) the absence of any event occurring and
continuing, or resulting from the Closing Date, that
constitutes a Default.
(xiii) A certificate of the Secretary of each Loan
Party certifying the names and true signatures of the
officers of such Persons authorized to sign each Transaction
Document to which it is or is to be a party and the other
documents to be delivered hereunder and thereunder.
(xiv) (A) A collateral assignment of license
agreement from the Manager of Bahia Mar assigning to the
Administrative Agent all of such Manager's right, title and
interest in and to that certain License Agreement dated as of
June 28, 1994 between Radisson Hotels International, Inc., as
Licensor, and such Manager, as Licensee; (B) a collateral
assignment of franchise agreement from the Manager of Pier 66
assigning to the Administrative Agent all of such Manager's
right, title and interest in and to that certain Hyatt Hotel
Franchise Agreement dated November 14, 1994 between Hyatt
Franchise Corporation, as Franchisor, and such Manager, as
Franchisee (together with the instrument described in clause
(A) above, the "COLLATERAL ASSIGNMENT OF LICENSE AGREEMENT");
(C) a consent and subordination agreements with Radisson
Hotels International, Inc. with respect to the collateral
assignment referred to in clause (A) above; (D) a consent and
subordination agreements with Hyatt Franchise Corporation
with respect to the collateral assignment referred to in
clause (B) above (together with the instrument described in
clause (C), the "LICENSOR CONSENT AND SUBORDINATION
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AGREEMENTS"); and (E) the consent and subordination agreement
with the Manager of each of the Bahia Mar and Pier 66
(collectively, the "MANAGEMENT SUBORDINATION AGREEMENTS").
(xv) A license agreement (the "REGISTRY LICENSE
AGREEMENT") from the Parent Guarantor to the Operating
Subsidiary which owns the Registry, on terms and conditions
reasonably acceptable to the Agents, which license agreement
will provide, INTER ALIA, for (i) the right of the Operating
Subsidiary and any successor-in-interest which acquires title
to, or the right to operate, the Registry, without payment of
any license fees, to use the name "The Registry", (ii) will
permit the Operating Subsidiary to pledge its interest in the
license agreement to the Administrative Agent as additional
security for the Facility and (iii) will be terminable by the
licensee. The license agreement will also acknowledge that
the Parent Guarantor shall retain other rights with respect
to the trade name "The Registry" subject to following
provisions: (i) if any of the Operating Subsidiaries changes
its name or includes as part of its name "The Registry", such
Operating Subsidiary shall become a licensee under the
Registry License Agreement, which shall provide, INTER ALIA,
for (x) the right of such Operating Subsidiary and any
successor-in-interest to acquires title to, or the right to
operate, under the name "The Registry" without payment of any
license fees and (y) permission by such Operating Subsidiary
to pledge its interest in the license agreement to the
Administrative Agent as additional security for the Facility;
(ii) within a five mile radius of The Registry only, the
Parent Guarantor may own and operate one or more other first
class, full service hotels under the name "The Registry"
provided such hotels have less than 275 hotel rooms and that
such hotels operating in such radius under the Registry name
and will not impair the economic performance of the Registry
and such other hotels and (iii) notwithstanding the
foregoing, any golf course located in such five mile radius
shall be permitted to use the name "The Registry".
(xvi) Certified copies of each of the Related
Documents, duly executed by the parties thereto and in form
and substance satisfactory to the Agents, together with all
agreements, instruments and other documents delivered in
connection therewith as the Agents shall request.
(xvii) Such financial, business and other
information regarding each Loan Party and its Subsidiaries as
the Agents shall have requested, including, without
limitation, information as to possible contingent
liabilities, tax matters, environmental matters, obligations
under Plans, Multiemployer Plans and Welfare Plans,
collective bargaining agreements and other arrangements with
employees, audited annual financial statements dated June 30,
1996, June 30, 1997 and June 30, 1998, annual and quarterly
financial statements as to the Borrower and its Subsidiaries
and each Operating Subsidiary as at December 31, 1998.
(xviii) Certificates, in substantially the form of
Exhibits H-1 and H-2 hereto, respectively, attesting to the
Solvency of the Parent Guarantor and its Subsidiaries on a
Consolidated basis and the Borrower and each Operating
Subsidiary after giving effect to the Transaction and the
other transactions contemplated hereby, from its chief
financial officer.
(xix) Evidence of insurance naming the
Administrative Agent as additional insured and loss payee
with such responsible and reputable insurance companies or
associations, and in such amounts and covering such risks, as
is satisfactory to the Agents, including, without limitation,
that required by Schedule 3.01(a)(xix) hereto, the Security
Agreements and the
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Mortgages, business interruption insurance, product liability
insurance, windstorm insurance and directors and officers
insurance.
(xx) Favorable opinions of Akerman, Senterfitt &
Eidson, P.A. and Paul, Hastings, Janofsky & Walker LLP,
special counsel for the Loan Parties, in substantially the
form of Exhibits I-1 and I-2.
(b) The Agents shall be satisfied with (i) the corporate and
legal structure and capitalization of the Loan Parties, both before
and after giving effect to the Transaction, including the terms and
conditions of the charter, bylaws and each class of capital stock of
the Loan Parties and of each agreement or instrument relating to such
structure or capitalization and (ii) the management of the Loan
Parties.
(c) Before giving effect to the Transaction and the other
transactions contemplated by this Agreement, there shall have occurred
no (i) material adverse change in the business, condition (financial
or otherwise), operations, performance, properties or prospects of the
Parent Guarantor and its Subsidiaries taken as a whole or any of the
Operating Subsidiaries, since December 31, 1998 and (ii) Material
Adverse Change since December 31, 1998.
(d) The Parent Guarantor shall have received at least
$300,000,000 in gross cash proceeds from the sale of the Subordinated
Notes, and such sale was lead managed by Bear Stearns, substantially
on the terms set forth in the Indenture.
(e) There shall exist no action, suit, investigation,
litigation or proceeding affecting any Loan Party or any of their
Subsidiaries pending or threatened before any court, governmental
agency or arbitrator that (i) could have a material adverse effect on
the business, condition (financial or otherwise), operations,
performance, properties or prospects of the Parent Guarantor and its
Subsidiaries taken as a whole, (ii) could have a Material Adverse
Effect or (iii) purports to affect the legality, validity or
enforceability of the Transaction or any Transaction Document or the
consummation of the transactions contemplated by the Transaction
Documents.
(f) All governmental and third party consents and approvals
necessary in connection with the Transaction and the other
transactions contemplated by the Transaction Documents shall have been
obtained (without the imposition of any conditions that are not
acceptable to the Agents) and shall remain in effect; all applicable
waiting periods in connection with the Transaction and the other
transactions contemplated by the Transaction Documents shall have
expired without any action having been taken by any competent
authority, and no law or regulation shall be applicable in the
judgment of the Agents, in each case that restrains, prevents or
imposes materially adverse conditions upon the Transaction and the
other transactions contemplated by the Transaction Documents or the
rights of the Loan Parties or their Subsidiaries freely to transfer or
otherwise dispose of, or to create any Lien on, any properties now
owned or hereafter acquired by any of them.
(g) The Agents shall have completed a due diligence
investigation with respect to the business, properties and operations
of the Parent Guarantor, the Borrower, the Subsidiary Guarantors and
their respective Subsidiaries including, without limitation, a review
of tax, ERISA, environmental, engineering, market study, franchise and
management agreements and all material contracts and agreements
relating to the Borrowing Base Properties (including, without
limitation, a field
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examination of the quality of their current assets and of their
management information systems) in scope, and with results,
satisfactory to the Agents, and nothing shall have come to the
attention of the Agents during the course of such due diligence
investigation to lead them to believe (i) that the Indenture was or
has become misleading, incorrect or incomplete in any material respect
and (ii) that, following the consummation of the Transaction, the
Parent Guarantor, the Borrower, the Subsidiary Guarantors and their
respective Subsidiaries would not have good and marketable title to
all material assets of the respective entities as reflected in the
Indenture and (iii) without limiting the generality of the foregoing,
the Agents shall have been given such access to the management,
records, books of account, contracts and properties of the Parent
Guarantor, the Borrower, the Subsidiary Guarantors and their
respective Subsidiaries as they shall have requested.
(h) The Agents shall be satisfied that all Existing Debt,
other than the Debt of the Loan Parties and their Subsidiaries
identified on Schedule 3.01(h) (the "SURVIVING DEBT"), has been
prepaid, redeemed or defeased in full or otherwise satisfied and
extinguished and that all such Surviving Debt shall be on terms and
conditions satisfactory to the Agents.
(i) All accrued fees and expenses of the Agents, BT Alex.
Brown Incorporated and the Lender Parties (including the accrued fees
and expenses of counsel to the Agents and of local counsel to the
Lender Parties) shall have been paid.
SECTION 3.02. CONDITIONS PRECEDENT TO EACH BORROWING. The obligation
of each Lender to make an Advance on the occasion of each Borrowing (including
the Closing Date) shall be subject to the further conditions precedent that on
the date of such Borrowing (a) the Administrative Agent shall have determined
that the following statements shall be true (and each of the giving of the
applicable Notice of Borrowing and the acceptance by the Borrower of the
proceeds of such Borrowing shall constitute a representation and warranty by
the Borrower that both on the date of such notice and on the date of such
Borrowing such statements are true):
(i) the representations and warranties contained in each Loan
Document are correct on and as of such date, before and after giving
effect to such Borrowing and to the application of the proceeds
therefrom, as though made on and as of such date other than any such
representations or warranties that, by their terms, refer to a
specific date other than the date of such Borrowing, in which case as
of such specific date;
(ii) no event has occurred and is continuing, or would result
from such Borrowing or from the application of the proceeds therefrom,
that constitutes a Default; and
(iii) for each Advance, the Borrowing Base Amount (less the
Intangible Tax Reserve) exceeds the aggregate principal amount of
Advances then outstanding after giving effect to such Advance;
and (b) the Administrative Agent shall have received such other approvals,
opinions or documents as any Lender Party through the Administrative Agent may
reasonably request.
SECTION 3.03. DETERMINATIONS UNDER SECTION 3.01. For purposes of
determining compliance with the conditions specified in Section 3.01, each
Lender Party shall be deemed to have consented to, approved or accepted or to
be satisfied with each document or other matter required
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thereunder to be consented to or approved by or acceptable or satisfactory to
the Lender Parties unless an officer of the Administrative Agent responsible
for the transactions contemplated by the Loan Documents shall have received
notice from such Lender Party prior to the Closing Date specifying its
objection thereto and such Lender Party shall not have made available to the
Administrative Agent such Lender Party's Pro Rata Share of such Borrowing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. REPRESENTATIONS AND WARRANTIES OF THE BORROWER. The
Borrower represents and warrants as follows:
(a) Each Loan Party (i) is a corporation, limited partnership
or limited liability company duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization,
(ii) is duly qualified and in good standing as a foreign corporation,
limited partnership or limited liability company in each other
jurisdiction in which it owns or leases property or in which the
conduct of its business requires it to so qualify or be licensed
except where the failure to so qualify or be licensed could not be
reasonably likely to have a Material Adverse Effect and (iii) has all
requisite power and authority (including, without limitation, all
governmental licenses, permits and other approvals) to own or lease
and operate its properties and to carry on its business as now
conducted and as proposed to be conducted. All of the outstanding
Equity Interests in the Subsidiary Guarantors and the Borrower have
been validly issued, are fully paid and non-assessable and, are owned
by the Persons in the amounts specified on Schedule 4.01(a) hereto
free and clear of all Liens, except those created under the Collateral
Documents.
(b) Set forth on Schedule 4.01(b) hereto is a complete and
accurate list of Subsidiaries of the Parent Guarantor (including the
Borrower) that own any direct or indirect interest in the Borrowing
Base Properties, showing as of the date hereof (as to each such
Subsidiary) the jurisdiction of its organization, the number of shares
of each class of its Equity Interests authorized, and the number
outstanding, on the date hereof and the percentage of the outstanding
shares of each such class of its Equity Interests owned (directly or
indirectly) by the Loan Party indicated on such Schedule and the
number of shares covered by all outstanding options, warrants, rights
of conversion or purchase and similar rights at the date hereof. All
of the outstanding Equity Interests in each such Subsidiary have been
validly issued, are fully paid and non-assessable and are owned by
such designated Loan Party free and clear of all Liens, except those
created under the Collateral Documents. Each such Subsidiary (i) is a
corporation, limited partnership or limited liability company duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (ii) is duly qualified and in good
standing as a foreign corporation, limited partnership or limited
liability company, as the case may be, in each other jurisdiction in
which it owns or leases property or in which the conduct of its
business requires it to so qualify or be licensed except where the
failure to so qualify or be licensed could not be reasonably likely to
have a Material Adverse Effect and (iii) has all requisite power and
authority (including, without limitation, all governmental licenses,
permits and other approvals) to own or lease and operate its
properties and to carry on its business as now conducted and as
proposed to be conducted. All Equity Interests in the Subsidiary
Guarantors and the Borrower have been pledged to
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the Administrative Agent for the benefit of the Lender Parties, and
the Operating Subsidiaries own, collectively, the Borrowing Base
Properties.
(c) The execution, delivery and performance by each Loan
Party of each Transaction Document to which it is or is to be a party
and the other transactions contemplated by the Transaction Documents,
are within such Loan Party's powers, have been duly authorized by all
necessary action, and do not (i) contravene such Loan Party's charter,
bylaws, partnership agreement, limited liability company operating or
members agreement or similar organizational documents or agreements,
(ii) violate any law, rule, regulation (including, without limitation,
Regulation X of the Board of Governors of the Federal Reserve System),
order, writ, judgment, injunction, decree, determination or award,
(iii) conflict with or result in the breach of, or constitute a
default under, any contract, loan agreement, indenture, mortgage, deed
of trust, lease or other instrument binding on or affecting any Loan
Party, any of its Subsidiaries or any of their properties or (iv)
except for the Liens created under the Loan Documents, result in or
require the creation or imposition of any Lien upon or with respect to
any of the properties of any Loan Party or any of its Subsidiaries. No
Loan Party is in violation of any such law, rule, regulation, order,
writ, judgment, injunction, decree, determination or award or in
breach of any such contract, loan agreement, indenture, mortgage, deed
of trust, lease or other instrument, the violation or breach of which
could be reasonably likely to have a Material Adverse Effect.
(d) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory
body or any other third party is required for (i) the due execution,
delivery, recordation, filing or performance by any Loan Party of any
Transaction Document to which it is or is to be a party, or for the
consummation of the Transaction or the other transactions contemplated
by the Transaction Documents, (ii) the grant by any Loan Party of the
Liens granted by it pursuant to the Collateral Documents, (iii) the
perfection or maintenance of the Liens created under the Collateral
Documents (including the first priority nature thereof) or (iv) the
exercise by any Agent or any Lender Party of its rights under the Loan
Documents or the remedies in respect of the Collateral pursuant to the
Collateral Documents, except for the authorizations, approvals,
actions, notices and filings listed on Schedule 4.01(d) hereto, all of
which have been duly obtained, taken, given or made and are in full
force and effect. All applicable waiting periods in connection with
the Transaction or the transactions contemplated by the Transaction
Documents have expired without any action having been taken by any
competent authority restraining, preventing or imposing materially
adverse conditions upon the Transaction and the other transactions
contemplated by the Transaction Documents or the rights of the Loan
Parties freely to transfer or otherwise dispose of, or to create any
Lien on, any properties now owned or hereafter acquired by any of
them.
(e) This Agreement has been, and each other Transaction
Document when delivered hereunder will have been, duly executed and
delivered by each Loan Party party thereto. This Agreement is, and
each other Transaction Document when delivered hereunder will be, the
legal, valid and binding obligation of each Loan Party party thereto,
enforceable against such Loan Party in accordance with its terms.
(f) (i) (x) The Consolidated balance sheet of the Parent
Guarantor and its Subsidiaries as at June 30, 1998, and the related
Consolidated statements of income and cash flow of the Parent
Guarantor and its Subsidiaries for the fiscal year then ended,
accompanied, by an unqualified opinion of Arthur Andersen LLP,
independent public accountants, (y) the Consolidated balance
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<PAGE> 45
sheet of the Parent Guarantor and its Subsidiaries as at December 31,
1998, and the related Consolidated statements of income and cash flow
of the Parent Guarantor and its Subsidiaries for the six months then
ended, and (z) the balance sheets of each of the Operating
Subsidiaries as at June 30, 1998 and December 31, 1998, and the
related statements of income and cash flow for the twelve months and
six months, respectively, then ended, in each case duly certified by
the chief financial officer of the Parent Guarantor, copies of which
have been furnished to each Lender Party, fairly present, subject, in
the case of the unaudited statements referred to in clauses (i)(y) and
(i)(z), to year-end audit adjustments, the Consolidated financial
condition of the Parent Guarantor and its Subsidiaries and of each of
the Operating Subsidiaries as at such dates and the Consolidated
results of the operations of the Parent Guarantor and its Subsidiaries
and of each of the Operating Subsidiaries for the periods ended on
such dates, respectively, all in accordance with generally accepted
accounting principles applied on a consistent basis, and
(ii) since June 30, 1998 there has occurred no Material
Adverse Change.
(g) Neither the Indenture nor any other information, exhibit
or report (excluding any financial projections) furnished by or on
behalf of any Loan Party to the Agents or any Lender Party, taken as a
whole, in connection with the negotiation of the Loan Documents or
pursuant to the terms of the Loan Documents contained any untrue
statement of a material fact or omitted to state a material fact
necessary to make the statements made therein not misleading in light
of the circumstances under which such information was provided and on
the date of the Closing Date.
(h) Except as set forth on Schedule 4.01(h), there is no
action, suit, investigation, litigation or proceeding affecting any
Loan Party, including any Environmental Action, pending or, to the
best knowledge of the Borrower, threatened before any court,
governmental agency or arbitrator against any Loan Party or the
Borrowing Base Properties.
(i) No Loan Party is engaged in the business of extending
credit for the purpose of purchasing or carrying Margin Stock, and no
proceeds of any Advance will be used to purchase or carry any Margin
Stock or to extend credit to others for the purpose of purchasing or
carrying any Margin Stock.
(j) The Collateral Documents create a valid and perfected
first priority security interest in the Collateral securing the
payment of the Secured Obligations, and all filings and other actions
necessary or desirable to perfect and protect such security interest
have been duly taken. The Loan Parties are the legal and beneficial
owners of the Collateral free and clear of any Lien, except for the
liens and security interests created or permitted under the Loan
Documents.
(k) Each Loan Party is not an "investment company," or an
"affiliated person" of, or "promoter" or "principal underwriter" for,
an "investment company," as such terms are defined in the Investment
Company Act of 1940, as amended. Neither the making of any Advances,
nor the application of the proceeds or repayment thereof by the
Borrower, nor the consummation of the other transactions contemplated
hereby, will violate any provision of such Act or any rule, regulation
or order of the Securities and Exchange Commission thereunder.
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(l) The Loan Parties, individually, and the Borrower and its
Subsidiaries, taken as a whole, are Solvent.
(m) (i) No ERISA Event has occurred or is reasonably expected
to occur with respect to any Plan.
(ii) As of the last annual actuarial valuation date,
the funded current liability percentage, as defined in
Section 302(d)(8) of ERISA, of each Plan exceeds 90% and
there has been no material adverse change in the funding
status of any such Plan since such date.
(iii) Neither any Loan Party nor any ERISA Affiliate
has incurred or is reasonably expected to incur any
Withdrawal Liability to any Multiemployer Plan.
(iv) Neither any Loan Party nor any ERISA Affiliate
has been notified by the sponsor of a Multiemployer Plan that
such Multiemployer Plan is in reorganization or has been
terminated, within the meaning of Title IV of ERISA, and no
such Multiemployer Plan is reasonably expected to be in
reorganization or to be terminated, within the meaning of
Title IV of ERISA.
(v) Except as set forth in the financial statements
referred to in this Section 4.01 and in Section 5.03, the
Loan Parties and their respective Subsidiaries have no
material liability with respect to "expected post retirement
benefit obligations" within the meaning of Statement of
Financial Accounting Standards No. 106.
(vi) Set forth on Schedule 4.01(m)(vi) hereto is a
complete and accurate list of all Plans, Multiemployer Plans
and Welfare Plans.
(vii) Schedule B (Actuarial Information) to the most
recent annual report (Form 5500 Series), if any, for each
Plan, copies of which have been filed with the Internal
Revenue Service and furnished to the Lender Parties, is
complete and accurate and fairly presents the funding status
of such Plan, and since the date of such Schedule B there has
been no material adverse change in such funding status.
(n) (i) The operations and properties of the Borrower and its
Subsidiaries comply with all applicable Environmental Laws and
Environmental Permits except (A) with respect to any non-compliance
existing as of the Closing Date, is disclosed in the environmental
reports delivered to Administrative Agent prior to the Closing Date;
and (B) such non-compliance which would not (if enforced in accordance
with applicable law) result in liability in excess of $50,000 in the
aggregate. All past claims of non-compliance with such Environmental
Laws and Environmental Permits have been resolved without ongoing
obligations or costs, and no circumstances exists that could be
reasonably likely to (x) form the basis of an Environmental Action
against any the Borrower and its Subsidiaries or any of their
properties that could have a Material Adverse Effect or (y) cause any
such property to be subject to any material restrictions on ownership,
occupancy, use or transferability under any Environmental Law.
(ii) None of the properties currently or formerly
owned or operated by any Loan Party is listed or proposed for
listing on the NPL or on the CERCLIS or any analogous
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<PAGE> 47
foreign, state or local list or is adjacent to any such
property; there are no and never have been any underground or
aboveground storage tanks or any surface impoundments, septic
tanks, pits, sumps or lagoons in which Hazardous Materials
are being or have been treated, stored or disposed on any
property currently owned or operated by any Loan Party or, to
the best of its knowledge, on any property formerly owned or
operated by any Loan Party; there is no asbestos or
asbestos-containing material on any property currently owned
or operated by any Loan Party; and Hazardous Materials have
not been released, discharged or disposed of on any property
currently or formerly owned or operated by any Loan Party,
except, in each case, where the non-compliance with the
foregoing could not have a Material Adverse Effect.
(iii) Each of the Loan Parties is not undertaking,
and has not completed, either individually or together with
other potentially responsible parties, any investigation or
assessment or remedial or response action relating to any
actual or threatened release, discharge or disposal of
Hazardous Materials at any site, location or operation,
either voluntarily or pursuant to the order of any
governmental or regulatory authority or the requirements of
any Environmental Law; and all Hazardous Materials generated,
used, treated, handled or stored at, or transported to or
from, any property currently or formerly owned or operated by
any Loan Party have been disposed of in a manner not
reasonably expected to result in material liability to any
Loan Party.
(o) (i) Each Loan Party has filed, has caused to be filed or
has been included in all tax returns (Federal, state, local and
foreign) required to be filed and has paid all taxes shown thereon to
be due, together with applicable interest and penalties.
(ii) Set forth on Schedule 4.01(o) hereto is a
complete and accurate list, as of the date hereof, of each
taxable year of each Loan Party for which Federal income tax
returns have been filed and for which the expiration of the
applicable statute of limitations for assessment or
collection has not occurred by reason of extension or
otherwise (an "OPEN YEAR").
(iii) There is no unpaid amount, as of the date
hereof, of adjustments to the Federal income tax liability of
each Loan Party proposed by the Internal Revenue Service with
respect to Open Years. No issues have been raised by the
Internal Revenue Service in respect of Open Years that, in
the aggregate, could have a Material Adverse Effect.
(iv) There is no unpaid amount, as of the date
hereof, of adjustments to the state, local and foreign tax
liability of each Loan Party and its Subsidiaries and
Affiliates proposed by all state, local and foreign taxing
authorities (other than amounts arising from adjustments to
Federal income tax returns, if any). No issues have been
raised by such taxing authorities that, in the aggregate,
could have a Material Adverse Effect.
(v) The Transaction will not be taxable to the
Parent Guarantor, the Borrower or any of its Subsidiaries,
except for the payment of state documentary stamp tax, all of
which have been paid.
(vi) The Parent Guarantor, the Borrower and its
Subsidiaries have, as of the date hereof, no net operating
loss carryforwards for U.S. Federal income tax purposes.
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(vii) All documentary stamp and intangible and
similar taxes owing in respect of any of the Loan Documents
(including, without limitation, the Mortgages) or which may
come due under any contingency have been paid to the
applicable taxing authority; provided, however, that
notwithstanding anything to the contrary contained in this
Agreement, unless the Administrative Agent has received
evidence of payment of the Florida non recurring intangible
personal property tax under Chapter 199 Florida Statutes (the
"INTANGIBLE TAX") with respect to the Mortgages or the
Facility (not including any payment that may have been made
with respect to the Existing Loan Documents), then (A)
subject to subsections (B) and (C) below, $292,000 shall at
all times be maintained as Unused Commitment (the "INTANGIBLE
TAX RESERVE") which sum shall be allocated among the Lender
Parties in accordance with their Pro Rata Share; (B) in the
event demand is made under the Subsidiary Guaranty, the
Lenders shall have the right, without further consent of the
Borrower, to fund Advances from the Intangible Tax Reserve in
such amounts as may be necessary to pay any Intangible Tax;
(C) the Borrower may only request Borrowings from the
Intangible Tax Reserve to pay Intangible Taxes.
(p) Neither the business nor the properties of any Loan Party
are affected by any fire, explosion, accident, strike, lockout or
other labor dispute, drought, storm, hail, earthquake, embargo, act of
God or of the public enemy or other casualty (whether or not covered
by insurance) that could be reasonably likely to have a Material
Adverse Effect.
(q) Set forth on Schedule 4.01(q) hereto is a complete and
accurate list of all Existing Debt (other than Surviving Debt),
showing as of the date hereof the principal amount outstanding
thereunder, the maturity date thereof and the amortization schedule
therefor.
(r) All real property owned by the Borrower and its
Subsidiaries is subject to the Lien of the Mortgages. The Borrower or
such Subsidiary has good, marketable and insurable fee simple title to
such real property, free and clear of all Liens, other than Liens
created or permitted by the Loan Documents and, to the best of the
Borrower's knowledge, all of the improvements located on such
properties lie entirely within the boundaries of such properties and
none of such improvements violate any minimum set-back requirements,
other dimensional regulations or restrictions of record.
(s) Set forth on Schedule 4.01(s) hereto is a complete and
accurate list of all leases of real property under which the Borrower
or any of its Subsidiaries is the lessee, showing as of the date
hereof the street address, county or other relevant jurisdiction,
state, lessor, lessee, expiration date and annual rental cost thereof.
Each such lease is the legal, valid and binding obligation of the
lessor thereof, enforceable in accordance with its terms and no
default exists thereunder.
(t) Set forth on Schedule 4.01(t) hereto is a complete and
accurate list of all Investments held by the Borrower or any of its
Subsidiaries, showing as of the date hereof the amount, obligor or
issuer and maturity, if any, thereof.
(u) Set forth on Schedule 4.01(u) hereto is a complete and
accurate list of all patents, trademarks, trade names, service marks
and copyrights, and all applications therefor and licenses thereof, of
the Borrower or any of its Subsidiaries, showing as of the date hereof
the jurisdiction in which registered, the registration number, the
date of registration and the expiration date.
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(v) The Liens described on the Mortgagee Title Insurance
Policies and on the UCC-11 searches delivered by the Borrower
constitute a complete and accurate list of all Liens on the property
or assets of the Borrower or any of its Subsidiaries, showing as of
the date hereof the lienholder thereof, the principal amount of the
obligations secured thereby and the property or assets of the Borrower
or such Subsidiary subject thereto.
(w) Each Loan Party has reviewed the areas within its
business and operations which could be adversely affected by, and has
developed or is in the process of developing a program to address on a
timely basis, "Year 2000 Issues" (i.e., the risk that computer
applications used by such Loan Party may be unable to recognize or
perform properly date sensitive functions involving certain dates
prior to, and any date after, December 31, 1999) and, based on such
review, such Loan Party reasonably believes that the "Year 2000
Issues" (and the cost of remedying the same) will not have a Material
Adverse Effect.
(x) No Default or Event of Default exists or would result
from the incurring of any Obligations by the Borrower. None of the
Borrower or any of the other Loan Parties is in default under or with
respect to any Obligation in any respect which, individually or
together with all such defaults, could reasonably be expected to have
a Material Adverse Effect on such Person.
(y) The provisions of the Security Agreements are effective
to create, in favor of the Administrative Agent, a legal, valid and
enforceable security interest in all of the Collateral described
therein; and the Collateral was delivered to the Administrative Agent
or its nominee in accordance with the terms thereof. The Liens of each
Security Agreement constitutes a perfected, security interest of the
priority specified therein in all right, title and interest of the
Borrower and each other Grantor, as defined in the Security
Agreements, as the case may be, in the Collateral described therein.
(z) The provisions of the Mortgages are effective to create,
in favor of the Administrative Agent, a legal, valid and enforceable
security interest in all of the Collateral described therein. The
liens of the Mortgages each constitutes a perfected, security interest
of the priority specified therein in all right, title and interest of
the Operating Subsidiaries and each other mortgagor, as the case may
be, in the Borrowing Base Properties described therein.
(aa) All necessary and required franchises, licenses,
authorizations, registrations, permits and approvals for the use and occupancy
of each of the Borrowing Base Properties have been obtained from all
governmental authorities having jurisdiction over such Collateral so as to
permit the operation of each such Borrowing Base Property as herein
contemplated. The Borrower has provided the Administrative Agent with true and
correct copies of all of the certificates of occupancy and other licenses,
permits and approvals respecting each of the Borrowing Base Properties of a
discretionary nature (i.e., approvals which are not considered ministerial
under applicable legal requirements, for example, zoning or use variances, or
conditional use permits), and such licenses, permits and approvals remain in
full force and effect without modification or exception.
(bb) The Operating Subsidiaries hold good and marketable fee
simple title or, to the extent acceptable to the Administrative Agent in
accordance with this Agreement, a valid leasehold interest, to each of the
Borrowing Base Properties, free and clear of all liens, claims, assessments,
encumbrances and rights of others other than the Permitted Liens. The Operating
Subsidiaries shall preserve such title to each of the Borrowing Base Properties
and will forever warrant and defend the
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same and the validity and priority of the Mortgages to the Administrative Agent
against all claims whatsoever.
(cc) Each Borrowing Base Property is zoned under a use
classification which allows such Borrowing Base Property to be used in
accordance with its present or anticipated usage, which zoning is final,
unconditional and in full force and effect. Each Borrowing Base Property is in
compliance in all material respects with all applicable zoning and land use
laws, regulations and ordinances. In the event that all or any part of the
improvements on any of the Borrowing Base Properties are destroyed or damaged,
zoning laws in effect at the time this representation is made do not prohibit
the improvements from being legally reconstructed to their condition prior to
such damage or destruction, and thereafter exist for the same use without
violating any zoning or other ordinances applicable thereto and without the
necessity of obtaining any variances or special permits. Each Borrowing Base
Property contains enough permanent parking spaces to satisfy all requirements
imposed by applicable laws with respect to parking. No legal proceedings are
pending or threatened with respect to the zoning of any of the Borrowing Base
Properties. Neither the zoning nor any other right to construct, use or operate
any of the Borrowing Base Properties is in any way dependent upon any real
estate other than the applicable Borrowing Base Property. No tract map, parcel
map, condominium plan, condominium declaration, or plat of subdivision will be
recorded with respect to any of the Borrowing Base Properties without the
Administrative Agent's prior written consent, which shall not be unreasonably
withheld or delayed.
(dd) The Borrower has provided the Administrative Agent with
true and complete copies of each contract and agreement affecting each of the
Borrowing Base Properties relating to the maintenance, development, operation
or management thereof and which (i) involves annual payments thereunder in
excess of $100,000 per year, and (ii) is not terminable without penalty or
premium upon 30 days' (or less) notice.
(ee) Neither the Borrower nor any other Loan Party has
received any notice from any governmental authority or from any Person with
respect to any actual or threatened taking of any of the Borrowing Base
Properties, or any portion thereof, for any public or quasi-public purpose by
the exercise of the right of condemnation or eminent domain or of any
moratorium which may affect the use, or operation of any such Borrowing Base
Properties.
(ff) The Transaction is an exempt transaction under the
Truth-in-Lending Act (15 U.S.C.A. Section 1601, et seq.).
(gg) Each Borrowing Base Property has access to and full
utilization of completed public roads necessary for access to and full
utilization of such Borrowing Base Property for its intended purposes.
(hh) A tax division has been effected with respect to each
Borrowing Base Property so that it is taxed for ad valorem taxation without
regard to or inclusion of any other property. No subdivision or other approval
is necessary with respect to any of the Borrowing Base Properties in order for
any Operating Subsidiary to mortgage, convey and otherwise deal with such
Borrowing Base Property as a separate lot or parcel.
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(ii) No Insolvency Proceeding has ever been initiated or
threatened against the Borrower or any other Loan Party.
(jj) Except as set forth on Schedule 4.01(s), there are no
leases covering any portion of any of the Borrowing Base Properties, whether
for present or future rights of occupancy, which cannot be terminated upon 30
days' notice. Except for Permitted Liens, neither the Borrower nor any other
Loan Party has executed any prior assignment of the leases, nor has it
performed any act or executed any other instrument which might prevent the
Administrative Agent from operating under or enforcing any of the terms and
conditions of the mortgages applicable to the Administrative Agent's security
interest in such leases or which would limit the Administrative Agent in such
operation.
(kk) All of the improvements situated on each Borrowing Base
Properties are in good condition and repair. Neither the Borrower nor any other
Loan Party is aware of any latent or patent structural or other significant
defect or deficiency in the improvements. City water supply, storm and sanitary
sewers, and electrical and telephone facilities are available to each Borrowing
Base Property within the boundary lines of such Borrowing Base Property, and
are sufficient to meet the reasonable needs of each Borrowing Base Property as
now used or contemplated to be used; no other utility facilities are necessary
to meet the reasonable needs of such Borrowing Base Property as now used; and,
the as-built condition of such Borrowing Base Property is such that surface and
storm water does not accumulate in other than insubstantial quantities on the
Borrowing Base Property and does not drain from the Borrowing Base Property
across land of adjacent Borrowing Base Property owners. As shown on the "as
built" survey for each Borrowing Base Property, none of the improvements on any
of the Borrowing Base Properties create an encroachment over, across or upon
any of the Borrowing Base Properties' boundary lines, rights of way or
easements, and no building or other improvement on adjoining land create such
an encroachment.
(ll) Except for Permitted Liens, there are no mechanics' or
materialmen's liens, alienable bills or other claims constituting or that may
constitute a lien on any of the Borrowing Base Properties or any part thereof,
and no work for which any such lien could be asserted has been performed within
the last ninety (90) days, a claim for which has not been insured against under
the Mortgagee Title Insurance Policies relating to the Borrowing Base Property
upon which such work has been performed.
ARTICLE V
COVENANTS
SECTION 5.01. AFFIRMATIVE COVENANTS. So long as any Advance
or any other Obligation of any Loan Party under or in respect of any Loan
Document shall remain unpaid or any Lender Party shall have any Commitment
hereunder, the Borrower shall:
(a) COMPLIANCE WITH LAWS, ETC. Comply, and cause each of its
Subsidiaries to comply, with all applicable federal, state and local
laws, rules, regulations and orders, such compliance to include,
without limitation, compliance with ERISA and the Racketeer Influenced
and Corrupt Organizations Chapter of the Organized Crime Control Act
of 1970.
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(b) PAYMENT OF TAXES, ETC. Pay and discharge, and cause each
of its Subsidiaries to pay and discharge, before the same shall become
delinquent, (i) all taxes, assessments and governmental charges or
levies imposed upon it or upon its property and (ii) all lawful claims
that, if unpaid, might by law become a Lien upon its property which is
not otherwise permitted hereunder; PROVIDED, HOWEVER, that neither the
Borrower nor any of its Subsidiaries shall be required to pay or
discharge any such tax, assessment, charge or claim that is being
contested in good faith and by proper proceedings (and, as to the
Borrowing Base Properties, in compliance with the Mortgages) and as to
which appropriate reserves are being maintained, unless and until any
Lien resulting therefrom attaches to its property and becomes
enforceable against its other creditors.
(c) COMPLIANCE WITH ENVIRONMENTAL LAWS. (i) Comply, and cause
each of its Subsidiaries and all lessees and other Persons operating
or occupying its properties to comply with all applicable
Environmental Laws and Environmental Permits (other than any
non-compliance that would not (if enforced in accordance with
applicable law) result in liability to the Borrower or any of its
Subsidiaries in the amount in excess of $50,000 and is not, by
applicable law, required to be reported to any governmental
authority); PROVIDED, HOWEVER, that the foregoing qualification shall
in no way diminish the obligations of Borrower and its Subsidiaries
under the Environmental Indemnity Agreement; (ii) obtain and renew and
cause each of its Subsidiaries to obtain and renew all Environmental
Permits necessary for its operations and properties; and (iii)
conduct, and cause each of its Subsidiaries to conduct, any
investigation, study, sampling and testing, and undertake any cleanup,
removal, remedial or other action necessary to remove and clean up all
Hazardous Materials from any of its properties, in accordance with the
requirements of all Environmental Laws.
(d) MAINTENANCE OF INSURANCE. Maintain, and cause each of its
Subsidiaries to maintain, insurance with responsible and reputable
insurance companies or associations in such amounts and covering such
risks as required by the Collateral Documents.
(e) PRESERVATION OF ORGANIZATIONAL EXISTENCE, ETC. Preserve
and maintain, and cause each of the Operating Subsidiaries to preserve
and maintain, (i) its existence (corporate or otherwise) and rights
(charter and statutory) and (ii) its permits, licenses, approvals,
privileges and franchises.
(f) VISITATION RIGHTS. At any reasonable time and from time
to time, upon reasonable prior notice, permit the Administrative Agent
or any of the Lender Parties or the Administrative Agent or
representatives thereof, to examine and make copies of and abstracts
from the records and books of account of, and visit the properties of,
the Borrower and any of its Subsidiaries, and to discuss the affairs,
finances and accounts of the Borrower and any of its Subsidiaries with
any of their officers or directors and with their independent
certified public accountants.
(g) KEEPING OF BOOKS. Keep, and cause each of its
Subsidiaries to keep, proper books of record and account, in which
full and correct entries shall be made of all financial transactions
and the assets and business of the Borrower and each such Subsidiary
in accordance with generally accepted accounting principles in effect
from time to time.
(h) MAINTENANCE OF PROPERTIES, ETC. Maintain and preserve,
and cause each of its Subsidiaries to maintain and preserve, all of
its properties (and, in the case of the Borrowing Base Properties, in
compliance with the Mortgages) that are reasonably required in the
conduct of its business in good working order and condition, ordinary
wear and tear excepted; PROVIDED, HOWEVER,
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that the Borrower shall at all times maintain, in cash or Unused
Commitments (provided that any such Unused Commitments maintained with
respect to the FF&E Reserve, taken together with Advances then
outstanding, are in compliance with Section 2.05(b)(i)), an FF&E
Reserve for any month equal to 4% of Total Revenue for a consecutive
12 calendar month period ending the last day of such month; PROVIDED,
FURTHER, HOWEVER that, for such period, this required amount shall be
reduced by any monies actually spent on the Borrowing Base Properties
during the same period for FF&E. This shall be tested on a quarterly
basis.
(i) TRANSACTIONS WITH AFFILIATES. Conduct, and cause each of
its Subsidiaries to conduct, all transactions otherwise permitted
under the Loan Documents with any of their Affiliates on terms that
are fair and reasonable and not less favorable to the Borrower or such
Subsidiary than it would obtain in a comparable arm's-length
transaction with a Person not an Affiliate; PROVIDED, HOWEVER, that
this Section 5.01(i) shall not apply to the Management Contracts.
(j) FURTHER ASSURANCES. (i) Promptly upon request by the
Administrative Agent, or any Lender Party through the Administrative
Agent, correct any material defect or error that may be discovered in
any Loan Document or in the execution, acknowledgment, filing or
recordation thereof, and
(ii) Promptly upon request by the Administrative Agent, or
any Lender Party through the Administrative Agent, do, execute,
acknowledge, deliver, record, re-record, file, re-file, register and
re-register any and all such further acts, deeds, conveyances, pledge
agreements, mortgages, deeds of trust, trust deeds, assignments,
financing statements and continuations thereof, termination
statements, notices of assignment, transfers, certificates, assurances
and other instruments as the Administrative Agent, or any Lender Party
through the Administrative Agent, may reasonably require from time to
time in order to (A) carry out more effectively the purposes of the
Loan Documents, (B) to the fullest extent permitted by applicable law,
subject any Loan Party's or any of its Subsidiaries' properties,
assets, rights or interests to the Liens now or hereafter intended to
be covered by any of the Collateral Documents, (C) perfect and
maintain the validity, effectiveness and priority of any of the
Collateral Documents and any of the Liens intended to be created
thereunder and (D) assure, convey, grant, assign, transfer, preserve,
protect and confirm more effectively unto the Administrative Agent and
the Lender parties the rights granted or now or hereafter intended to
be granted to the Administrative Agent and the Lender Parties under
any Loan Document or under any other instrument executed in connection
with any Loan Document to which any Loan Party or any of its
Subsidiaries is or is to be a party, and cause each of its
Subsidiaries to do so.
(k) PERFORMANCE OF RELATED DOCUMENTS AND OTHER MATERIAL
AGREEMENTS. Perform and observe, and cause each of its Subsidiaries to
perform and observe, all of the terms and provisions of each Related
Document and other material agreements to be performed or observed by
it, maintain each such Related Document and other material agreements
in full force and effect, enforce such Related Document and other
material agreements in accordance with its terms, take all such action
to such end as may be from time to time reasonably requested by the
Administrative Agent and, upon the reasonable request of the
Administrative Agent, make to each other party to each such Related
Document and other material agreements such demands and requests for
information and reports or for action as such Loan Party or any of its
Subsidiaries is entitled to make under such Related Document and other
material agreements.
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(l) PREPARATION OF ENVIRONMENTAL REPORTS. At the request of
the Administrative Agent, provide to the Lender Parties within 60 days
after such request, at the expense of the Borrower (PROVIDED, HOWEVER,
that Borrower shall only be required to pay for such report after the
occurrence and continuation of an Event of Default or if the
Administrative Agent's request results from its belief that there has
been a release or threatened release of Hazardous Materials at any of
Borrower's or any of its Subsidiaries' property), a Phase I
environmental site assessment report for any of its or its
Subsidiaries' properties described in such request, prepared by an
environmental consulting firm acceptable to the Administrative Agent
(and, if based upon the recommendation of such environmental
consulting firm, a Phase II environmental site assessment report)
indicating the presence or absence of Hazardous Materials and the
estimated cost of any compliance, removal or remedial action in
connection with any Hazardous Materials on such properties; without
limiting the generality of the foregoing, if the Administrative Agent
determines at any time that a material risk exists that any such
requested report will not be provided within the time referred to
above, the Administrative Agent may retain an environmental consulting
firm to prepare such report at the expense of the Borrower, and the
Borrower hereby grants and agrees to cause any Subsidiary that owns
any property described in such request to grant at the time of such
request, to the Administrative Agent, the Lender Parties, such firm
and any agents or representatives thereof an irrevocable non-exclusive
license, subject to the rights of tenants, to enter onto their
respective properties to undertake such an assessment.
(m) COMPLIANCE WITH TERMS OF LEASEHOLDS. Make all payments
and otherwise perform all obligations in respect of all leases of real
property to which the Borrower or any of its Subsidiaries is a party,
keep such leases in full force and effect and not allow such leases to
lapse or be terminated or any rights to renew such leases to be
forfeited or canceled, notify the Administrative Agent of any material
default by any party with respect to such leases and cooperate with
the Administrative Agent in all respects to cure any such default, and
cause each of its Subsidiaries to do so except, in any case, where the
failure to do so, either individually or in the aggregate, could not
be reasonably likely to have a Material Adverse Effect.
(n) APPRAISALS. Appraisals of any or all of the Borrowing
Base Properties may be requested either by the Borrower or any Lender
subject to the approval of the Required Lenders at any time; PROVIDED,
HOWEVER, that if the appraisal is requested by the Lenders the
Borrower shall be required to pay for only one such appraisal per
property per Fiscal Year. The selection of an appraiser for purposes
of determining the Appraised Value shall be subject to the approval of
the Administrative Agent.
(o) MANAGEMENT. The Borrower shall cause the Managers to
operate each of the Borrowing Base Properties at all times consistent
with the manner as currently operated as first-class luxury hotels,
cause the Borrowing Base Properties to be managed by the Managers in
accordance with the terms of the Management Contracts, perform and
observe all the terms and provisions of the Management Contracts to be
performed or observed by the Borrower or its Subsidiaries, maintain
the Management Contracts in full force and effect, enforce the
Management Contracts in accordance with their terms, take such action
to such end as may be from time to time reasonably requested by the
Administrative Agent and, upon the request of the Administrative
Agent, make to the Managers such demands and requests for information
and reports or for action as the Borrower is entitled to make under
the Management Contracts. The Management Contracts (or any of them)
may be terminated by the Administrative Agent upon thirty (30) days'
prior written notice to the Borrower after a Default has occurred or
is continuing.
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(p) SINGLE PURPOSE ENTITY. Remain, and shall cause each of
its Subsidiaries to remain, at all times, a Single Purpose Entity.
(q) MAINTENANCE OF BANK ACCOUNTS. Maintain, and cause each of
its Subsidiaries to maintain, bank accounts and a cash management
system for blocked accounts acceptable to the Administrative Agent
and, upon an Event of Default, lockbox accounts.
(r) INTEREST RATE PROTECTION AGREEMENTS. To the extent
Advances exceed $50,000,000, the Borrower will purchase interest rate
caps for 50% of such excess amount on a basis acceptable to the
Administrative Agent.
(s) APPLICATION OF GROSS REVENUES. Promptly apply all gross
revenues from the Borrowing Base Properties to the payment of all
current and past due operating expenses of the Borrowing Base
Properties and to the repayment of all principal, interest expense,
fees and other sums currently due or past due under the Loan
Documents, including but not limited to all reserve payments and any
escrow or impound payments required pursuant thereto.
(t) FF&E RESERVE. Upon the occurrence or continuance of an
Event of Default, transfer, and cause the Operating Subsidiaries to
transfer, the FF&E Reserves applicable to the Borrowing Base
Properties owned by it to the FF&E Reserve Account.
(u) MAINTAIN SOLVENCY. Remain, and shall cause the Parent
Guarantor and each of the Subsidiaries of the Borrower to remain, at
all times, Solvent.
(v) BORROWING BASE AMOUNT. Maintain, and cause each of its
Subsidiaries to maintain, the Borrowing Base Amount (less the
Intangible Tax Reserve) as defined in Section 1.01 hereto in excess of
all outstanding Advances.
(w) CERTAIN ENGINEERING MATTERS. As soon as practicable, but
in any event within the time frame as set forth in Schedule 5.01(w)
(or such later date as authorized by an engineer and approved by the
Administrative Agent), the Borrower shall, or shall cause its
Subsidiaries to, remedy each of the engineering matters set forth in
Schedule 5.01(w) and shall promptly thereafter deliver a certificate
of an authorized officer of the Borrower certifying as to each such
remediation.
SECTION 5.02. NEGATIVE COVENANTS. So long as any as any
Advance or any other Obligation of any Loan Party under or in respect of any
Loan Document shall remain unpaid or any Lender Party shall have any Commitment
hereunder, the Borrower shall not, and shall not permit or suffer the
Subsidiary Guarantors to, at any time:
(a) LIENS, ETC. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to
exist, any Lien on or with respect to any of its properties of any
character (including, without limitation, accounts) whether now owned
or hereafter acquired, or sign or file or suffer to exist, or permit
any of its Subsidiaries to sign or file or suffer to exist, under the
Uniform Commercial Code of any jurisdiction, a financing statement
that names the Subsidiary Guarantor, the Borrower or any of its
Subsidiaries as debtor, or sign or suffer to exist, or permit any of
its Subsidiaries to sign or suffer to exist, any security agreement
authorizing any secured party thereunder to file such financing
statement, or assign, or permit any of its Subsidiaries to assign, any
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accounts or other right to receive income, EXCLUDING, HOWEVER, from
the operation of the foregoing restrictions the following:
(i) Liens created under the Loan Documents;
(ii) Permitted Liens or Permitted Encumbrances;
(iii) Liens on the FF&E (including, without
limitation, purchase money liens on FF&E) arising in the
ordinary course of business;
(iv) any leases of FF&E, subject to (x) the limit on
Capital Leases set forth in subsection (b) below, and (y) the
Administrative Agent's receipt of any such leases, together
with evidence of lessee's right to assign its interest under
the lease to the Administrative Agent as additional security
and lessor's (i) consent to such collateral assignment and
(ii) agreement to accept any cures by the Administrative
Agent in the event of a default under the lease; and
(v) Liens existing on the date hereof and described
on Schedule 4.01(v) hereto;
(vi) Liens arising in connection with Capitalized
Leases permitted under Section 5.02(b)(iv); PROVIDED that no
such Lien shall extend to or cover any Collateral or assets
other than the assets subject to such Capitalized Leases;
(vii) the filing of financing statements solely as a
precautionary measure in connection with operating leases
permitted under Section 5.02(b)(iii), and
(viii) the replacement, extension or renewal of any
Lien permitted by clause (iii) above upon or in the same
property theretofore subject thereto or the replacement,
extension or renewal (without increase in the amount or
change in any direct or contingent obligor) of the Debt
secured thereby.
(b) DEBT. Create, incur, assume or suffer to exist, or permit
any of its Subsidiaries to create, incur, assume or suffer to exist,
any Debt other than:
(i) Debt under the Loan Documents,
(ii) Debt under the Subordinated Guaranty,
(iii) Capitalized Leases not to exceed, together
with Debt permitted under Section 5.02(b)(iv), $2,000,000
with respect to each Borrowing Base Property at any time
outstanding and $6,000,000 for the Borrowing Base Properties
in the aggregate at any time outstanding,
(iv) Debt secured by Liens permitted by Section
5.02(a)(iii) not to exceed, together with Debt permitted
under Section 5.02(b)(iii), $2,000,000 with respect to each
Borrowing Base Property at any time outstanding and
$6,000,000 for the Borrowing Base Properties in the aggregate
at any time outstanding,
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(v) indorsement of negotiable instruments for
deposit or collection or similar transactions in the ordinary
course of business, and
(vi) Debt of any Subsidiary Guarantor to the
Borrower or to the Parent Guarantor or of the Borrower to the
Parent Guarantor so long as such Debt (a) is expressly
subordinated to the Obligations hereunder (such subordination
shall be satisfactory to the Administrative Agent in its sole
discretion); and (b) is evidenced by a written instrument
which is pledged and delivered by the holder thereof as
collateral for the Obligations hereunder.
(c) CHANGE IN NATURE OF BUSINESS. Make, or permit any of its
Subsidiaries to make, any material change in the nature of its
business as carried on at the date hereof.
(d) MERGERS, ETC. Merge into or consolidate the Borrower or
the Operating Subsidiaries with any Person or permit any Person to
merge into the Borrower or the Operating Subsidiaries, or permit any
of the Operating Subsidiaries to do so.
(e) SALES, ETC. OF ASSETS. Sell, lease, transfer or otherwise
dispose of, or permit any of its Subsidiaries to sell, lease, transfer
or otherwise dispose of, any assets, or grant any option or other
right to purchase, lease or otherwise acquire any assets, except:
(i) sales of Inventory, as defined in the Security
Agreements (including, without limitation, sales of obsolete
Inventory) in the ordinary course of its business,
(ii) sales or trade-ins of used equipment for fair
value in the ordinary course of business for like assets or
cash in an aggregate for all of the Borrowing Base Properties
amount not to exceed $250,000 in any Fiscal Year,
(iii) The Borrower shall have the right to sell the
whole of any Borrowing Base Property (but not less than the
whole), but not more than two Borrowing Base Properties, and
obtain from the Administrative Agent such reconveyances of
the Mortgages securing such Borrowing Base Properties and the
release or reconveyance of such other Collateral that shall
constitute such Borrowing Base Property, upon and subject to
satisfaction of each of the following conditions as
determined in good faith by the Administrative Agent: (A) at
the option of the Administrative Agent, the Administrative
Agent shall have received, for the benefit of the Lender
Parties and at the Borrower's cost and expense, an
irrevocable commitment from a title company acceptable to the
Administrative Agent that such company shall issue an
endorsement to the Mortgagee Title Insurance Policies that
the release will not affect the lien priority of the
Mortgages of those Borrowing Base Properties that are not
sold, which commitment and endorsement shall be in form and
substance satisfactory to the Administrative Agent; (B) each
Guarantor shall have executed and delivered to the
Administrative Agent such documents in form and substance
satisfactory to the Lenders as are necessary to reaffirm the
continued effectiveness and enforceability of the Guaranties
following such release; (C) no Default shall then exist as a
result of such sale or shall occur; (D) the Borrower shall
reimburse the Administrative Agent for all reasonable costs
and expenses (including, without limitation, attorneys' fees)
which the Administrative Agent incurs in connection with any
sale hereunder; (E) the Administrative Agent shall have
received a Borrowing Base Certificate and monthly financial
statements demonstrating that after giving effect to the
release (and any
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intended pay down in connection with the release) the
principal amount of the then outstanding Advances does not
exceed the Borrowing Base Amount (less the Intangible Tax
Reserve); and (F) the Loan Parties shall deliver such
additional documents as Administrative Agent may reasonably
request to evidence such Loan Parties' acknowledgment of
their continuing obligations under the Loan Documents. No
sale of any of the Borrowing Base Properties shall affect the
Borrower's obligations under the Indemnity Agreement, and
(iv) the transfer of any Pledged Shares to any
Subsidiary Guarantors in accordance with the provisions of
Section 5.02(q).
(f) INVESTMENTS. Make or hold, or permit any of its
Subsidiaries to make or hold, any Investment other than Investments by
the Borrower and its Subsidiaries in:
(i) wholly-owned Subsidiaries of the Borrower or the
Subsidiary Guarantor outstanding on the date hereof;
(ii) the Parent Guarantor, subject to the
requirements set forth in Section 5.02(b)(vi);
(iii) loans and advances to employees in the
ordinary course of the business of the Borrower and its
Subsidiaries as presently conducted in an aggregate principal
amount not to exceed $2,000,000 at any time outstanding;
(iv) Investments by the Borrower and its
Subsidiaries in demand deposit accounts maintained in the
ordinary course of business with any Person of the type
referred to in clause (i), (ii), (iii), (iv) or (v) of the
definition of "ELIGIBLE ASSIGNEE" and in Cash Equivalents on
deposit in Blocked Accounts (as defined in the Security
Agreements); and
(v) Investments existing on the date hereof and
described on Schedule 4.01(t) hereto;
(g) RESTRICTED PAYMENTS. So long as any Default shall have
occurred and be continuing at the time of any action described in this
Section 5.02(g) or would result therefrom, declare or pay any
dividends, purchase, redeem, retire, defease or otherwise acquire for
value any of its Equity Interests now or hereafter outstanding, return
any capital to its stockholders, partners or members (or the
equivalent Persons thereof) as such or issue or sell any Equity
Interests or accept any capital contributions, or permit any of its
Subsidiaries to purchase, redeem, retire, defease or otherwise acquire
for value Equity Interests of the Borrower or its Subsidiaries or to
issue or sell any Equity Interests therein.
(h) AMENDMENT OF CONSTITUTIVE DOCUMENTS. Amend, or permit any
of its Subsidiaries to amend, its certificate of incorporation, bylaws
or other constitutive documents.
(i) ACCOUNTING CHANGES. Make or permit, or permit any of its
Subsidiaries to make or permit, any change in (A) accounting policies
or reporting practices, except as required by generally accepted
accounting principles or (B) the Fiscal Year; provided, however, that
the Borrower and its
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Subsidiaries may each change its Fiscal Year to December 31 to conform
to a change by the Parent Guarantor.
(j) PREPAYMENTS, ETC. OF DEBT. (i) Prepay, redeem, purchase,
defease or otherwise satisfy prior to the scheduled maturity thereof
in any manner, or make any payment in violation of any subordination
terms of, any Debt, other than (x) the prepayment of the Advances in
accordance with the terms of this Agreement, and (y) if before and
after giving effect to any such prepayment, redemption, purchase,
defeasance or other satisfaction, no Default has occurred or would
result therefrom, regularly scheduled or required repayments or
redemptions of Surviving Debt, or (ii) amend, modify or change in any
manner any term or condition of any Surviving Debt or the Subordinated
Notes, or permit any of its Subsidiaries to do any of the foregoing
other than to prepay any Debt payable to the Borrower, Parent or any
Subsidiary Guarantor permitted under Section 5.02(b)(vi) hereunder.
(k) AMENDMENT, ETC. OF RELATED DOCUMENTS. Without the prior
written consent of the Administrative Agent, (i) cancel or terminate
any Related Document or consent to or accept any cancellation or
termination thereof, (ii) amend, modify or change in any manner any
term or condition of any Related Document or material agreements,
(iii) give any consent, waiver or approval thereunder, (iv) waive any
default under or any breach of any term or condition of any Related
Document or material agreements, (v) agree in any manner to any other
amendment, modification or change of any term or condition of any
Related Document or material agreements or (vi) take any other action
in connection with any Related Document or material agreements that
would impair the value of the interest or rights of any Loan Party
thereunder or that would impair the rights or interests of the
Administrative Agent or any Lender Party.
(l) NEGATIVE PLEDGE. Enter into or suffer to exist, or permit
any of its Subsidiaries to enter into or suffer to exist, any
agreement prohibiting or conditioning the creation or assumption of
any Lien upon any of its property or assets other than (i) in favor of
the Administrative Agent for the benefit of the Lender Parties or (ii)
in connection with (A) any Surviving Debt, (B) Capitalized Leases and
purchase money Debt to the extent permitted under Section 5.02(b)(iii)
and solely to the extent such agreement is limited to the property
covered by such Liens, and (B) any Debt outstanding on the date of
acquisition of a Subsidiary by any Loan Party, so long as such
agreement was not entered into solely in contemplation of such
Subsidiary being so acquired.
(m) PARTNERSHIPS. Become a general partner in any general or
limited partnership or joint venture, or permit any of its
Subsidiaries to do so other than any Subsidiary Guarantor the sole
assets of which consist of its interest in such partnership or joint
venture and to the extent permitted by Section 5.02(f)(ii).
(n) FORMATION OF SUBSIDIARIES. Organize or invest, or permit
any Subsidiary to organize or invest, in any new Subsidiary unless
such new Subsidiary: (i) is wholly owned by the Borrower and the
Borrower pledges its interest therein as collateral for all
Obligations hereunder; (ii) executes a guaranty of the Obligations
hereunder; (iii) pledges all interests in any Subsidiary Guarantor for
collateral for all Obligations hereunder; (iv) is a Single Purpose
Entity; and (v) otherwise comply with the requirements of subsection
(q) below
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(o) PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES. Directly or
indirectly, enter into or suffer to exist, or permit any of its
Subsidiaries to enter into or suffer to exist, any agreement or
arrangement limiting the ability of any of its Subsidiaries to declare
or pay dividends or other distributions in respect of its Equity
Interests or repay or prepay any Debt owed to, make loans or advances
to, or otherwise transfer assets to or invest in, the Borrower or any
Subsidiary of the Borrower (whether through a covenant restricting
dividends, loans, asset transfers or investments, a financial covenant
or otherwise), except (i) the Loan Documents, (ii) any agreement or
instrument evidencing Surviving Debt and (iii) any agreement in effect
at the time such Subsidiary becomes a Subsidiary of the Borrower, so
long as such agreement was not entered into solely in contemplation of
such Person becoming a Subsidiary of the Borrower.
(p) OTHER TRANSACTIONS. Engage, or permit any of its
Subsidiaries to engage, in any transaction involving commodity options
or futures contracts or any similar speculative transactions
(including, without limitation, take-or-pay contracts).
(q) NO TRANSFER. The Borrower acknowledges that, in entering
into the Facility, the Lenders have relied to a material extent upon
the particular business reputation, expertise, creditworthiness, and
individual net worth of the Borrower, the Subsidiary Guarantors, and
all of the other persons, partnerships, trusts, corporations or other
entities who have a direct or indirect interest in the Borrower and
the Subsidiary Guarantors and upon the continuing interest which such
persons, partnerships, trusts, corporations or other entities, as
owners of direct or indirect interests in the Borrower and the
Subsidiary Guarantors, will have in the Borrowing Base Properties and
the Pledged Shares. Except as provided in Section 6.01 below, an Event
of Default shall occur hereunder, and the Administrative Agent shall
have the right, in its sole option, to declare the principal and
interest under the Note and all sums provided herein immediately due
and payable if, without the prior written consent of the
Administrative Agent, which may be given or withheld in its sole
discretion: (1) any of the Parent Guarantor, the Borrower or the
Subsidiary Guarantors (i) sells, conveys, transfers, disposes of, or
otherwise alienates their interests in the Borrowing Base Properties
or the Pledged Shares (as defined in the Security Agreements), or any
part thereof, or any interest therein, whether voluntarily, by the
operation of law, or otherwise, or (ii) executes a contract to do any
of the foregoing (unless the closing of such contract is expressly
contingent upon obtaining the Administrative Agent's consent to the
foregoing); (2) there occurs a change, whether directly or indirectly,
in the composition, control, ownership or structure of the Borrower or
the Subsidiary Guarantors (except as permitted by Section 5.02(e)
hereof), including, (i) any direct or indirect change in, or any
change in direct or indirect ownership interests held by, any entity
comprising such Person, of whatever tier (provided that the foregoing
shall not prohibit transfers of interests in the Parent Guarantor) or
(ii) any termination of the existence of any such Person or any entity
comprising such, or any of the members or partners therein or
beneficial owners thereof, of whatever tier; or (3) any change in the
Managers, or any direct or indirect change in the composition,
control, ownership or structure of Managers (each of the events
described in clauses (1) through (3) above are referred to hereinafter
as a "TRANSFER"). Consent to a Transfer or consent to any other event
requiring consent in accordance with the foregoing shall be granted or
withheld in the Administrative Agent's discretion and, if granted,
shall not constitute a waiver of the requirement of consent for
subsequent Transfers or other events. Notwithstanding anything to the
contrary contained herein, subject to satisfying each of the
conditions set forth in Section 3.01 and pursuant to Section 5.02(e),
the Administrative Agent shall not withhold its consent to the
following Transfers ("PERMITTED TRANSFERS"): (i) Transfers of
immaterial portions of the Borrowing Base Properties to governmental
authorities in accordance with the condemnation provisions
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of the Mortgages; (ii) Liens permitted pursuant to Section 5.02(a);
(iii) sales of the whole of a Borrowing Base Property in accordance
with Section 5.02(e)(iii) and (iv) leases permitted pursuant to
Section 5.02(b). Notwithstanding anything in this Section 5.02(q) to
the contrary, a Transfer of Equity Interests in any Subsidiary
Guarantor other than an Operating Subsidiary shall be deemed a
Permitted Transfer upon satisfaction of the following conditions, as
determined by the Administrative Agent:
(1) At all times the Parent Guarantor shall own, directly or
indirectly, all of the Equity Interests in the Borrower and all such
Equity Interests remain subject to a first priority Lien pursuant to
the Parent Guarantor Security Agreement;
(2) At all times the Borrower or a Subsidiary Guarantor shall
own, directly or indirectly, all of the Equity Interests in the Person
to whom the Equity Interests are proposed to be transferred (the
"Proposed Transferee") and all such Equity Interests shall remain
subject to a first priority Lien in favor of the Administrative Agent.
In the event the Proposed Transferee is not an existing Subsidiary
Guarantor which has pledged all of its Equity Interests to the
Administrative Agent as security for the Obligations under the Loan
Documents, the Proposed Transferee shall execute a Subsidiary Guaranty
and either become a party to the Subsidiary Guaranty Security Agreement
(through the execution of such amendments, supplements, or addendum as
the Administrative Agent may require) or execute such other security
agreement as may be acceptable in form and substance to the
Administrative Agent. The Administrative Agent shall also have received
such UCC financing statements and other documents, certificates and
instruments as may be necessary or appropriate in the Administrative
Agent's judgment to perfect its Lien on the Equity Interests proposed
to be transferred.
(3) No Default or Event of Default shall then exist under the
Loan Documents; the Proposed Transferee must be, and the Borrower and
each Subsidiary Guarantors must remain, a Single Purpose Entity;
(4) The Transfer shall not constitute a default or an event of
default under any Related Documents or any other material agreements of
any Loan Party;
(5) Each of the Loan Documents, including, without limitation,
the Mortgages, shall be in full force and effect and, at the
Administrative Agent's request, the Administrative Agent shall have
received reaffirmations of the obligations thereunder, in a form
satisfactory to the Administrative Agent, from the Borrower and any
other Loan Parties as requested by the Administrative Agent;
(6) Not less than five (5) Business Days prior to the date of any
Transfer, the Administrative Agent shall have received copies of all
organization documents of the Proposed Transferee and such organization
documents shall be consistent with each of the requirements otherwise
set forth in this Agreement and the other Loan Documents;
(7) No Transfer permitted hereunder or otherwise permitted by the
Administrative Agent shall release the Borrower or any Loan Party from
any liability, if any, hereunder, under the Loan Documents or under any
other agreement executed in connection with the Loan Documents;
(8) Such Transfer shall not result in the tax termination of the
Borrower or any Operating Subsidiary;
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(9) At the Administrative Agent's election, the Administrative
Agent shall have received an endorsement to its lender's policy of
title insurance issued in connection with the Loan Documents confirming
that such transfer shall not affect the continuing lien priority of the
Mortgages; and
(10) The Borrower shall have paid all of the Administrative
Agent's administrative expenses, including, without limitation,
reasonable fees and disbursements of the Administrative Agent's
counsel, incurred in connection with the Administrative Agent's review
of such transfer.
(r) SUBORDINATED NOTES AND GUARANTY. Amend, or permit, cause, or
suffer any of its Subsidiaries or the Parent Guarantor to amend the
Indenture, Note Purchase Agreement, or any other documents evidencing,
supporting, or otherwise relating to the Subordinated Notes or the
Subordinated Guaranty. Any such amendments without the consent of the
Administrative Agent shall be deemed void.
SECTION 5.03. BORROWER REPORTING REQUIREMENTS. So long as any
Obligation of any Loan Party under or in respect of any Loan Document shall
remain unpaid or any Lender Party shall have any Commitment hereunder, the
Borrower will furnish to the Administrative Agent and the Lender Parties:
(a) DEFAULT NOTICES. As soon as possible and in any event within
two Business Days after the occurrence of each Default or any event,
development or occurrence reasonably likely to have a Material Adverse
Effect continuing on the date of such statement, a statement of the
chief financial officer of the Borrower setting forth details of such
Default, event, development or occurrence and the action that the
Borrower has taken and proposes to take with respect thereto.
(b) MONTHLY FINANCIALS. As soon as available and in any event
within 45 days after the end of each month, commencing March 31, 1999,
a Consolidated balance sheet of the Borrower and its Subsidiaries, and
of each of the Operating Subsidiaries, in each case as of the end of
such month and Consolidated statements of income and cash flow of the
Borrower and its Subsidiaries, and of each of the Operating
Subsidiaries, in each case for the period commencing at the end of the
previous month and ending with the end of such month and Consolidated
statements of income and cash flow of the Borrower and its
Subsidiaries, and of the Operating Subsidiaries for the period
commencing at the end of the previous Fiscal Year and ending with the
end of such month, setting forth in each case in comparative form the
corresponding figures for the corresponding month and Fiscal
Year-to-date period of the preceding Fiscal Year, all in reasonable
detail and duly certified by the chief financial officer or chief
accounting officer of the Borrower, together with (i) a certificate of
said officer on behalf of the Borrower stating that no Default has
occurred and is continuing or, if a Default has occurred and is
continuing, a statement as to the nature thereof and the action that
the Borrower has taken and proposes to take with respect thereto and
(ii) in the event of any change from GAAP in the generally accepted
accounting principles used in the preparation of such financial
statements, a statement of reconciliation conforming such financial
statements to GAAP. The Borrower shall provide a compilation report
prepared by an outside accountant not more than 90 days after the
Fiscal Year end, monthly operating reports not more than 45 days after
each month end and other reviews or reports, each as acceptable to the
Administrative Agent.
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(c) CAPITAL EXPENDITURE BUDGET. As soon as available and in any
event not less than 45 days prior to the end of each Fiscal Year, each
Operating Subsidiary shall provide a Capital Expenditure budget,
reasonably sufficient to properly maintain each of the Borrowing Base
Properties, for each Borrowing Base Property for the succeeding Fiscal
Year, together with a certificate of the chief financial officer of
the Borrower certifying the actual capital expenditures for each
Operating Subsidiary for the period commencing at the end of the
previous Fiscal Year and ending with the end of such month prior to
the month in which such budget is delivered.
(d) QUARTERLY FF&E RESERVE CERTIFICATES. As soon as available and
in any event within 45 days after the end of each quarter, commencing
March 31, 1999, a certificate of the chief financial officer of the
Borrower certifying the amount of FF&E Reserves with respect to the
Borrowing Base Properties for such period and for the period
commencing at the end of the previous Fiscal Year and ending with the
end of such quarter in which such certificate is delivered.
(e) ERISA. (i) ERISA EVENTS AND ERISA REPORTS. (A) Promptly and
in any event within 10 days after any Loan Party or any ERISA
Affiliate knows or has reason to know that any ERISA Event has
occurred, a statement of the chief financial officer of the Borrower
describing such ERISA Event and the action, if any, that such Loan
Party or such ERISA Affiliate has taken and proposes to take with
respect thereto and (B) on the date any records, documents or other
information must be furnished to the PBGC with respect to any Plan
pursuant to Section 4010 of ERISA, a copy of such records, documents
and information.
(ii)PLAN TERMINATIONS. Promptly, and in any event within three
Business Days after receipt thereof by any Loan Party or any ERISA
Affiliate, copies of each notice from the PBGC stating its intention
to terminate any Plan or to have a trustee appointed to administer any
Plan.
(iii) PLAN ANNUAL REPORTS. Promptly and in any event within 30
days after the filing thereof with the Internal Revenue Service, copies
of each Schedule B (Actuarial Information) to the annual report (Form
5500 Series) with respect to each Plan.
(iv) MULTIEMPLOYER PLAN NOTICES. Promptly and in any event within
five Business Days after receipt thereof by any Loan Party or any
ERISA Affiliate from the sponsor of a Multiemployer Plan, copies of
each notice concerning (A) the imposition of Withdrawal Liability by
any such Multiemployer Plan, (B) the reorganization or termination,
within the meaning of Title IV of ERISA, of any such Multiemployer
Plan or (C) the amount of liability incurred, or that may be incurred,
by such Loan Party or any ERISA Affiliate in connection with any event
described in clause (A) or (B).
(f) LITIGATION. Promptly after the commencement thereof, notice
of all actions, suits, investigations, litigation and proceedings
before any court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, affecting (i)
the Borrower or any of its Subsidiaries of the type described in
Section 4.01(h) or (ii) the Parent Guarantor if such action, claim or
proceeding, if adversely determined, could result in a judgment which
would constitute and Event of Default under Section 6.02(g).
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(g) CREDITOR REPORTS. Promptly after the furnishing thereof,
copies of any statement or report furnished to any other holder of the
Debt of the Borrower or of any of its Subsidiaries (including, without
limitation, the holders of the Subordinated Notes) pursuant to the
terms of any indenture, loan or credit or similar agreement and not
otherwise required to be furnished to the Lender Parties pursuant to
any other clause of this Section 5.03.
(h) AGREEMENT NOTICES. Promptly upon receipt thereof, copies of
all notices, requests and other documents received by the Borrower or
any of its Subsidiaries under or pursuant to any Related Document or
indenture, loan or credit or similar agreement regarding or related to
any breach or default by any party thereto or any other event that
could materially impair the value of the interests or the rights of
the Borrower or any of its Subsidiaries or otherwise have a Material
Adverse Effect and copies of any amendment, modification or waiver of
any provision of any Related Agreement or indenture, loan or credit or
similar agreement and, from time to time upon request by the
Administrative Agent, such information and reports regarding the
Related Documents as the Administrative Agent may reasonably request.
(i) REVENUE AGENT REPORTS. Within 10 days after receipt, copies
of all Revenue Agent Reports (Internal Revenue Service Form 886), or
other written proposals of the Internal Revenue Service, that propose,
determine or otherwise set forth positive adjustments to the Federal
income tax liability of the affiliated group (within the meaning of
Section 1504(a)(1) of the Internal Revenue Code) of which the Borrower
is a member aggregating $250,000 or more.
(j) TAX CERTIFICATES. Promptly, and in any event within five
Business Days after the due date (with extensions) for filing the
final Federal income tax return in respect of each taxable year, a
certificate (a "TAX CERTIFICATE"), signed by the President or the
chief financial officer of the Borrower, stating that the common
parent of the affiliated group (within the meaning of Section
1504(a)(1) of the Internal Revenue Code) of which the Borrower is a
member has paid to the Internal Revenue Service or other taxing
authority, or to the Parent Guarantor, the full amount that such
affiliated group is required to pay in respect of Federal income tax
for such year and that the Parent Guarantor and its Subsidiaries have
received any amounts payable to them, and have not paid amounts in
respect of taxes (Federal, state, local or foreign) in excess of the
amount they are required to pay, under the tax agreements, if any, in
effect in respect of such taxable year.
(k) ENVIRONMENTAL CONDITIONS. Promptly after the assertion or
occurrence thereof, notice of any Environmental Action against or of
any noncompliance by the Borrower or any of its Subsidiaries with any
Environmental Law or Environmental Permit that could (i) reasonably be
expected to have a Material Adverse Effect or (ii) cause any property
described in the Mortgages to be subject to any restrictions on
ownership, occupancy, use or transferability under any Environmental
Law.
(l) REAL PROPERTY. As soon as available and in any event within
30 days after the end of each Fiscal Year, a report supplementing
Schedule 4.01(s) hereto, including an identification of all real and
leased property disposed of by the Borrower or any of its Subsidiaries
during such Fiscal Year, a list and description (including the street
address, county or other relevant jurisdiction, state, record owner,
book value thereof, and in the case of leases of property, lessor,
lessee, expiration date and annual rental cost thereof) of all real
property acquired or
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leased during such Fiscal Year and a description of such other changes
in the information included in such Schedule as may be necessary for
such Schedule to be accurate and complete.
(m) INSURANCE. As soon as available and in any event within 30
days after the end of each Fiscal Year, a report summarizing the
insurance coverage (specifying type, amount and carrier) in effect for
the Borrower and its Subsidiaries and containing such additional
information as any Lender Party (through the Administrative Agent) may
reasonably specify.
(n) BORROWING BASE CERTIFICATE. As soon as available and in any
event within 45 days after the end of each month, a Borrowing Base
Certificate, as at the end of such month, certified by the chief
financial officer of the Borrower.
(o) OTHER INFORMATION. Such other information respecting the
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower or any of its Subsidiaries as
any Lender Party (through the Administrative Agent) may from time to
time reasonably request, including, without limitation, all special
reports filed with the Securities and Exchange Commission or any
governmental authority that may be substituted therefor.
SECTION 5.04 PARENT GUARANTOR REPORTING REQUIREMENTS. So long as any
Obligation of any Loan Party under or in respect of any Loan Document shall
remain unpaid or any Lender Party shall have any Commitment hereunder, the
Parent Guarantor will furnish to the Administrative Agent and the Lender
Parties:
(a) DEFAULT AND PREPAYMENT NOTICES. As soon as possible and in
any event within two Business Days after the occurrence of each
Default or any event, development or occurrence reasonably likely to
have a Material Adverse Effect continuing on the date of such
statement, a statement of the chief financial officer of the Parent
Guarantor setting forth details of such Default, event, development or
occurrence and the action that the Parent Guarantor has taken and
proposes to take with respect thereto.
(b) QUARTERLY FINANCIALS. As soon as available and in any event
within 45 days after the end of each calender quarter, commencing June
30, 1999, a Consolidated balance sheet of the Parent Guarantor and its
Subsidiaries, in each case as of the end of such calender quarter and
a Consolidated statement of income and cash flow of the Parent
Guarantor and its Subsidiaries, in each case for the period commencing
at the end of the previous calender quarter and ending with the end of
such calender quarter, and a Consolidated statement of income and cash
flow of the Parent Guarantor and its Subsidiaries for the period
commencing at the end of the previous Fiscal Year and ending with the
end of such calender quarter, setting forth in each case in
comparative form the corresponding figures for the corresponding
calender quarter and Fiscal Year-to-date period of the preceding
Fiscal Year, all in reasonable detail and duly certified by the chief
financial officer of the Parent Guarantor, together with (i) a
certificate of said officer on behalf of the Parent Guarantor stating
that no Default has occurred and is continuing or, if a Default has
occurred and is continuing, a statement as to the nature thereof and
the action that the Parent Guarantor has taken and proposes to take
with respect thereto and (ii) a schedule in form satisfactory to the
Administrative Agent of the computations used by the Parent Guarantor
in determining compliance with the covenants contained in Section
5.05.
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(c) ANNUAL FINANCIALS. As soon as available and in any event
within 93 days after the end of each Fiscal Year, a copy of the annual
audit report for such year for the Parent Guarantor and its
Subsidiaries, including therein Consolidated balance sheets of the
Parent Guarantor and its Subsidiaries, in each case as of the end of
such Fiscal Year, and Consolidated statements of income and cash flow
of the Parent Guarantor and its Subsidiaries, in each case for the
period commencing at the end of the previous Fiscal Year and ending
with the end of such Fiscal Year, accompanied as to such Consolidated
statements, by an unqualified opinion of Arthur Andersen, LLP or other
independent public accountants of recognized standing acceptable to
the Required Lenders, together with (i) a copy of any management
letter prepared by such accounting firm with respect to such Fiscal
Year and distributed to the Parent Guarantor, (ii) a certificate of
the chief financial officer of the Parent Guarantor stating that no
Default has occurred and is continuing or, if a default has occurred
and is continuing, a statement as to the nature thereof and the action
that the Parent Guarantor has taken and proposes to take with respect
thereto, (iii) in the event of any change from GAAP in the generally
accepted accounting principles used in the preparation of such
financial statements, a statement of reconciliation conforming such
financial statements to GAAP and (iv) a schedule in form satisfactory
to the Administrative Agent of the computations used by the Parent
Guarantor in determining compliance with the covenants contained in
Section 5.05.
SECTION 5.05. PARENT GUARANTOR COVENANTS. So long as any Advance or
any other Obligation of any Loan Party under or in respect of any Loan Document
shall remain unpaid or any Lender Party shall have any Commitment hereunder,
the Parent Guarantor:
(a) COMPLIANCE WITH COVENANTS. Shall and shall cause the Borrower
and each of its Subsidiaries to perform and observe, all of the terms,
covenants and agreements set forth in the Loan Documents on their part to be
performed or observed or that the Borrower has agreed to cause its Subsidiaries
to perform or observe.
(b) LEVERAGE RATIO. Shall maintain at all times, on a
Consolidated basis for itself and its Subsidiaries, a Leverage Ratio, as of the
date of determination, of not more than 6.5 to 1.
(c) FIXED CHARGE COVERAGE RATIO. Shall maintain at all times, on
a Consolidated basis for itself and its Subsidiaries, a Fixed Charge Coverage
Ratio, as of the date of determination, of not less than 1.3 to 1.
(d) BOOK NET WORTH. Shall maintain at all times, on a
Consolidated basis for itself and its Subsidiaries, a Book Net Worth of not
less than the sum of (i) $375,000,000, (ii) 75% of the value of all equity
offerings after the Closing Date, and (iii) 75% of net income since April 1,
1999, as of the date of determination.
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ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. EVENTS OF DEFAULT. If any of the following events
("EVENTS OF DEFAULT") shall occur and be continuing:
(a) (i) the Borrower shall fail to pay any principal of any
Advance when the same becomes due and payable, (ii) the Borrower shall
fail to prepay any principal of any Advance as required under Section
2.05(b) within five Business Days of when the same becomes due and
payable or (iii) the Borrower shall fail to pay any interest on any
Advance or any Loan Party shall fail or make any other payment under
any Loan Document within five Business Days of when the same becomes
due and payable; or
(b) any representation or warranty made by any Loan Party (or any
of its officers) under or in connection with any Loan Document shall
prove to have been incorrect in any material respect when made; or
(c) any Loan Party shall fail to perform or observe any term,
covenant or agreement contained in Section 2.15, 5.01(e)(i) and (i),
5.02 or 5.03 (other than subparagraph (c) thereof); or
(d) any Loan Party shall fail to perform or observe any other
term, covenant or agreement contained in any Loan Document on its part
to be performed or observed if such failure shall remain unremedied
for 30 days after the earlier of the date on which (A) a Responsible
Officer of the Borrower becomes aware of such failure or (B) written
notice thereof shall have been given to the Borrower by the
Administrative Agent or any Lender Party; or
(e) any Loan Party shall fail to pay any principal of, premium or
interest on or any other amount payable in respect of any Debt that is
outstanding in a principal amount (or, in the case of any Hedge
Agreement, an Agreement Value) of at least $7,500,000 either
individually or in the aggregate (but excluding Debt outstanding
hereunder) of the Loan Parties, when the same becomes due and payable
(whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise), and such failure shall continue after the
applicable grace period, if any, specified in the agreement or
instrument relating to such Debt; or any other event shall occur or
condition shall exist under any agreement or instrument relating to
any such Debt and shall continue after the applicable grace period, if
any, specified in such agreement or instrument, if the effect of such
event or condition is to accelerate, or to permit the acceleration of,
the maturity of such Debt or otherwise to cause, or to permit the
holder thereof to cause, such Debt to mature; or any such Debt shall
be declared to be due and payable or required to be prepaid or
redeemed (other than by a regularly scheduled required prepayment or
redemption), purchased or defeased, or an offer to prepay, redeem,
purchase or defease such Debt shall be required to be made, in each
case prior to the stated maturity thereof; or
(f) any Loan Party or any of its Subsidiaries shall generally not
pay its debts as such debts become due, or shall admit in writing its
inability to pay its debts generally, or shall make a general
assignment for the benefit of creditors; or any proceeding shall be
instituted by or
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against any Loan Party or any of its Subsidiaries seeking to
adjudicate it a bankrupt or insolvent, or seeking liquidation, winding
up, reorganization, arrangement, adjustment, protection, relief, or
composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver,
trustee, or other similar official for it or for any substantial part
of its property and, in the case of any such proceeding instituted
against it (but not instituted by it) that is being diligently
contested by it in good faith, either such proceeding shall remain
undismissed or unstayed for a period of 60 days or any of the actions
sought in such proceeding (including, without limitation, the entry of
an order for relief against, or the appointment of a receiver,
trustee, custodian or other similar official for, it or any
substantial part of its property) shall occur; or any Loan Party or
any of its Subsidiaries shall take any corporate action to authorize
any of the actions set forth above in this subsection (f); or
(g) any judgment or order for the payment of money in excess of
$2,000,000 for each Operating Subsidiary and $5,000,000 for the Parent
Guarantor (to the extent not fully paid or discharged) shall be
rendered against any Loan Party or any of its Subsidiaries and either
(i) enforcement proceedings shall have been commenced by any creditor
upon such judgment or order or (ii) there shall be any period of 10
Business Days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in
effect; or
(h) any non-monetary judgment or order shall be rendered against
any Loan Party or any of its Subsidiaries that could reasonably be
likely to have a Material Adverse Effect, and there shall be any
period of 10 consecutive days during which a stay of enforcement of
such judgment or order, by reason of a pending appeal or otherwise,
shall not be in effect; or
(i) any provision of any Loan Document after delivery thereof
pursuant to Section 3.01 shall for any reason cease to be valid and
binding on or enforceable against any Loan Party to it, or any such
Loan Party shall so state in writing; or
(j) any Collateral Document after delivery thereof pursuant to
Section 3.01 shall for any reason (other than pursuant to the terms
thereof) cease to create a valid and perfected first priority lien on
and security interest in the Collateral purported to be covered
thereby; or
(k) a Change of Control shall occur; or
(l) any ERISA Event shall have occurred with respect to a Plan
and the sum (determined as of the date of occurrence of such ERISA
Event) of the Insufficiency of such Plan and the Insufficiency of any
and all other Plans with respect to which an ERISA Event shall have
occurred and then exist (or the liability of the Loan Parties and the
ERISA Affiliates related to such ERISA Event) exceeds $5,000,000; or
(m) any Loan Party or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that it has incurred
Withdrawal Liability to such Multiemployer Plan in an amount that,
when aggregated with all other amounts required to be paid to
Multiemployer Plans by the Loan Parties and the ERISA Affiliates as
Withdrawal Liability (determined as of
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the date of such notification), exceeds $5,000,000 or requires
payments exceeding 1,000,000 per annum; or
(n) any Loan Party or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or is being terminated, within
the meaning of Title IV of ERISA, and as a result of such
reorganization or termination the aggregate annual contributions of
the Loan Parties and the ERISA Affiliates to all Multiemployer Plans
that are then in reorganization or being terminated have been or will
be increased over the amounts contributed to such Multiemployer Plans
for the plan years of such Multiemployer Plans immediately preceding
the plan year in which such reorganization or termination occurs by an
amount exceeding $1,000,000; or
(o) there shall occur any Material Adverse Change; or
(p) a default shall occur under the Subordinated Notes, the
Subordinated Guaranty, the Indenture, the Note Purchase Agreement, or
any other agreements executed by any Loan Party in connection with
such instruments;
then, and in any such event, the Administrative Agent (i) shall at the request,
or may with the consent, of the Required Lenders, by notice to the Borrower,
declare the Commitments of each Lender Party and the obligation of each Lender
to make Advances to be terminated, whereupon the same shall forthwith
terminate, and (ii) shall at the request, or may with the consent, of the
Required Lenders, (A) by notice to the Borrower, declare the Advances, all
interest thereon and all other amounts payable under this Agreement, the Notes,
and the other Loan Documents to be forthwith due and payable, whereupon the
Advances, all such interest and all such amounts shall become and be forthwith
due and payable, without presentment, demand, protest or further notice of any
kind, all of which are hereby expressly waived by the Borrower; PROVIDED,
HOWEVER, that in the event of an actual or deemed entry of an order for relief
with respect to any Loan Party or any of its Subsidiaries under the Federal
Bankruptcy Code, (x) the Commitments of each Lender Party and the obligation of
each Lender to make Advances shall automatically be terminated and (y) the
Advances, all such interest and all such amounts shall automatically become and
be due and payable, without presentment, demand, protest or any notice of any
kind, all of which are hereby expressly waived by the Borrower.
ARTICLE VII
THE AGENTS
SECTION 7.01. AUTHORIZATION AND ACTION. BT Co. Is hereby appointed the
Administrative Agent under this Agreement and the other Loan Documents and each
Lender Party hereby authorizes the Administrative Agent to act as its agent in
accordance with the terms of this Agreement and the other Loan Documents. The
Administrative Agent agrees to act upon the express conditions contained in
this Agreement and the other Loan Documents, as applicable. Subject to the
express terms of this Agreement, each Lender Party irrevocably authorizes the
Administrative Agent to take such action on such Person's behalf and to
exercise such powers hereunder and under the Loan Documents as are delegated to
the Administrative Agent by the terms hereof and thereof, together with such
powers and discretion as are reasonably incidental thereto. The Administrative
Agent have only those duties and
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responsibilities that are expressly specified in this Agreement and the other
Loan Documents and it may perform such duties by or through its agents or
employees. Neither Agent shall have, by reason of this Agreement or any of the
other Loan Documents, a fiduciary relationship in respect of any Lender Party;
and nothing in this Agreement or any of the other Loan Documents, expressed or
implied, is intended to or shall be so construed as to impose upon either Agent
any obligations in respect of this Agreement or any of the other Loan Documents
except as expressly set forth herein or therein. To the extent that the consent
of the Lender Parties, or any of them, is not expressly required pursuant to
this Agreement, then the Administrative Agent shall be permitted to take such
actions as it deems necessary or appropriate to fulfill it duties under this
Agreement and the other Loan Documents. The Administrative Agent shall not be
required to take any action that exposes the Administrative Agent to personal
liability or that is contrary to this Agreement or applicable law. The
Administrative Agent agrees to give to each Lender Party prompt notice of each
notice given to it by the Borrower pursuant to the terms of this Agreement. The
provisions of this Article VII are solely for the benefit of the Agents and the
Lender Parties, and no Loan Party or any other Person shall have any rights as
a third party beneficiary of any of the provisions hereof. In performing its
functions and duties under this Agreement and the other Loan Documents, the
Administrative Agent shall act solely as an agent of the Lender Parties and the
Administrative Agent does not assume and shall not be deemed to have assumed
any obligation towards or relationship of agency or trust with or for the
Borrower or any other Loan Party.
SECTION 7.02. AGENT'S RELIANCE, ETC. Neither Agent nor any of its
respective directors, officers, agents or employees shall be liable for any
action taken or omitted to be taken by any of them under or in connection with
the Loan Documents, except for its or their own gross negligence or willful
misconduct. Without limitation of the generality of the foregoing, each Agent:
(a) may treat the Lender that made any Advance as the holder of the Debt
resulting therefrom until the Administrative Agent receives and accepts an
Assignment and Acceptance entered into by such Lender, as assignor, and an
Eligible Assignee, as assignee, as provided in Section 8.07; (b) may consult
with legal counsel (including counsel for any Loan Party), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (c) makes no warranty or
representation to any Lender Party and shall not be responsible to any Lender
Party for any statements, warranties or representations (whether written or
oral) made in or in connection with the Loan Documents; (d) shall not have any
duty to ascertain or to inquire as to the performance or observance of any of
the terms, covenants or conditions of any Loan Document on the part of any Loan
Party or to inspect the property (including the books and records) of any Loan
Party; (e) shall not be responsible to any Lender Party for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of, or
the perfection or priority of any lien or security interest created or
purported to be created under or in connection with, any Loan Document or any
other instrument or document furnished pursuant thereto; and (f) shall incur no
liability under or in respect of any Loan Document by acting upon any notice,
consent, certificate or other instrument or writing (which may be by telegram,
telecopy or telex) believed by it to be genuine and signed or sent by the
proper party or parties.
SECTION 7.03. BT CO., BEAR STEARNS AND AFFILIATES. With respect to its
Commitments, the Advances made by it and any Notes issued to it, BT Co. and
Bear Stearns shall each have the same rights and powers under the Loan
Documents as any other Lender Party and may exercise the same as though each of
them were not the Administrative Agent or Syndication Agent, as the case may
be; and the term "Lender Party" or "Lenders Parties" shall, unless otherwise
expressly indicated, include BT
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Co. and Bear Stearns in its individual capacity. BT Co. and Bear Stearns and
their respective affiliates may accept deposits from, lend money to, act as
trustee under indentures of, accept investment banking engagements from and
generally engage in any kind of business with, any Loan Party, any of its
Subsidiaries and any Person who may do business with or own securities of any
Loan Party or any such Subsidiary, all as if BT Co. and Bear Stearns were not
the Administrative Agent and Syndication Agent, respectively, and without any
duty to account therefor to the Lender Parties.
SECTION 7.04. LENDER PARTY CREDIT DECISION. Each Lender Party
acknowledges that it has, independently and without reliance upon the
Administrative Agent, the Syndication Agent or any other Lender Party and based
on the financial statements referred to in Section 4.01 and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender Party also
acknowledges that it will, independently and without reliance upon the
Administrative Agent, the Syndication Agent or any other Lender Party and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement.
SECTION 7.05. INDEMNIFICATION. (a) Each Lender Party severally agrees
to indemnify each of the Administrative Agent and the Syndication Agent (to the
extent not promptly reimbursed by the Borrower) from and against such Lender
Party's Pro Rata Share (determined as provided below) of any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever
(including, without limitation, reasonable fees and expenses of counsel) that
may be imposed on, incurred by, or asserted against such Agent in any way
relating to or arising out of the Loan Documents or any action taken or omitted
by such Agent under the Loan Documents (collectively, the "INDEMNIFIED COSTS");
PROVIDED, HOWEVER, that no Lender Party shall be liable for any portion of such
Indemnified Costs resulting from such Agent's gross negligence or willful
misconduct as found in a final, non-appealable judgment by a court of competent
jurisdiction. Without limitation of the foregoing, each Lender Party agrees to
reimburse the Administrative Agent and the Syndication Agent promptly upon
demand for its Pro Rata Share of any costs and expenses (including, without
limitation, fees and expenses of counsel) payable by the Borrower under Section
8.04, to the extent that the Agent is not promptly reimbursed for such costs
and expenses by the Borrower. For purposes of this Section 7.05, the Lender
Parties' respective Pro Rata Shares of any amount shall be determined, at any
time, according to the sum of (a) the aggregate principal amount of the
Advances outstanding at such time and owing to the respective Lender Parties
and (b) their respective Unused Commitments at such time.
(b) In the case of any investigation, litigation or
proceeding giving rise to any Indemnified Costs, this Section 7.05 applies
whether any such investigation, litigation or proceeding is brought by the
Administrative Agent, the Syndication Agent, any Lender, any other Lender Party
or a third party. The failure of any Lender Party to reimburse the
Administrative Agent or the Syndication Agent promptly upon demand for its Pro
Rata Share of any amount required to be paid by the Lender Parties to such
Agent as provided herein shall not relieve any other Lender Party of its
obligation hereunder to reimburse such Agent for its Pro Rata Share of such
amount, but no Lender Party shall be responsible for the failure of any other
Lender Party to reimburse such Agent for such other Lender Party's Pro Rata
Share of such amount.
(c) Without prejudice to the survival of any other agreement
of any Lender Party hereunder, the agreement and obligations of each Lender
Party contained in this Section 7.05 shall
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survive the payment in full of principal, interest and all other amounts
payable hereunder and under the other Loan Documents. In the event that any
Defaulted Advance shall be owing by any Defaulting Lender at any time, such
Lender Party's Commitment shall be considered to be unused for the purposes of
this Section 7.05(a) to the extent of the amount of such Defaulted Advance.
SECTION 7.06. SUCCESSOR ADMINISTRATIVE AGENTS. The Administrative
Agent may resign at any time by giving written notice thereof to the Lender
Parties and the Borrower and may be removed at any time for gross negligence or
willful misconduct by an instrument or concurrent instruments in writing
delivered to the Administrative Agent and the Borrower and signed by the
Required Lenders. Upon any such resignation or removal, the Required Lenders
shall have the right to appoint a successor Administrative Agent. If no
successor Administrative Agent shall have been so appointed by the Required
Lenders, and shall have accepted such appointment, within 30 days after the
retiring Administrative Agent's giving of notice of resignation or the Required
Lenders' removal of the retiring Administrative Agent, then the retiring
Administrative Agent may, on behalf of the Lender Parties, appoint a successor
Administrative Agent, which shall be a commercial bank organized under the laws
of the United States or of any State thereof and having a combined capital and
surplus of at least $400,000,000. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative Agent and upon the
execution and filing or recording of such financing statements, or amendments
thereto, and such amendments or supplements to the Mortgages, if any, and such
other instruments or notices, as may be necessary or desirable, or as the
Required Lenders may request, in order to continue the perfection of the Liens
granted or purported to be granted by the Collateral Documents, such successor
Administrative Agent shall succeed to and become vested with all the rights,
powers, discretion, privileges and duties of the retiring Administrative Agent,
and the retiring Administrative Agent shall be discharged from its duties and
obligations under the Loan Documents. If within 45 days after written notice is
given of the retiring Administrative Agent's resignation or removal under this
Section 7.06 no successor Administrative Agent shall have been appointed and
shall have accepted such appointment, then on such 45th day (i) the retiring
Administrative Agent's resignation or removal shall become effective, (ii) the
retiring Administrative Agent shall thereupon be discharged from its duties and
obligations under the Loan Documents and (iii) the Required Lenders shall
thereafter perform all duties of the retiring Administrative Agent under the
Loan Documents until such time, if any, as the Required Lenders appoint a
successor Administrative Agent as provided above. After any retiring
Administrative Agent's resignation or removal hereunder as Administrative Agent
shall become effective, the provisions of this Article VII shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement.
SECTION 7.07. SYNDICATION AGENT. The Syndication Agent shall not have
any duties.
SECTION 7.08. COLLATERAL DOCUMENTS; SECURED PARTY ACTION. (a) Each
Secured Party hereby further authorizes the Administrative Agent to enter into
the Collateral Documents as secured party on behalf of and for the benefit of
the Secured Parties and agrees to be bound by the terms of the Collateral
Documents; provided that anything in this Agreement or the other Loan Documents
to the contrary notwithstanding:
(i) The Administrative Agent is authorized on behalf of all
Secured Parties, without the necessity of any notice to or further
consent from the Secured Parties, from time to time to take any action
with respect to any Collateral or the Collateral Documents which may
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be necessary to perfect and maintain perfected the security interest
in and liens upon the Collateral granted pursuant to the Collateral
Documents.
(ii) Each Secured Party irrevocably authorize the
Administrative Agent, at its option and in its discretion, to release
any lien granted to or held by the Administrative Agent upon any
Collateral (A) upon payment in full of the Facility and all other
Obligations payable under this Agreement and under any other Loan
Document; (B) which is sold or to be sold or disposed of as part of or
in connection with any disposition permitted under this Agreement so
long as the Borrower is entitled to be granted such a release pursuant
to this Agreement; or (C) consisting of a guaranty or an instrument
evidencing Debt so long as the obligations under such guaranty or such
Debt evidenced by such instrument has been satisfied or paid in full.
Upon request by the Administrative Agent at any time, the Secured
Parties will confirm in writing the Administrative Agent's authority
to release particular types or items of Collateral pursuant to this
Section.
(b) Anything contained in any of the Loan Documents to the contrary
notwithstanding, each Secured Party agrees that no Secured Party shall have any
right individually to realize upon any of the Collateral under the Collateral
Documents or make demand under the Guaranties (including without limitation
through the exercise of a right of set-off against call deposits of such
Secured Party in which any funds on deposit in accordance with the Collateral
Documents may from time to time be invested), it being understood and agreed
that all rights and remedies under the Collateral Documents and the Guaranties
may be exercised solely by the Administrative Agent for the benefit of the
Secured Parties in accordance with the terms thereof.
SECTION 7.09. CERTAIN ACTIONS AFTER AN EVENT OF DEFAULT. (a) Upon
delivery to the Administrative Agent of notice of an Event of Default pursuant
to this Agreement or the Administrative Agent's otherwise obtaining actual
knowledge of the existence of an Event of Default, the Administrative Agent
shall deliver notice of such Event of Default to Lender Parties. The
Administrative Agent may thereafter, from time to time, propose various actions
(or forbearance from action) ("PROPOSED DEFAULT RESPONSE") in response to such
Event of Default, including, without limitation, foreclosure on all or portions
of the Collateral, appointment of a receiver, demand under one or more
Guaranties, or the exercise of other remedies provided in this Agreement and
the other Loan Documents, and may implement such Proposed Default Response upon
approval of the Required Lenders; PROVIDED HOWEVER that (i) in the absence of
any pending Proposed Default Response, beginning 30 days after the notice of
the Event of Default has been delivered to Lender Parties or was due thereto,
the Required Lenders may direct the Administrative Agent to exercise specific
remedies under the Loan Documents; and (ii) notwithstanding anything to the
contrary contained herein, at all times the Administrative Agent shall be
permitted to exercise such interim remedies (including (A) making protective
advances, and (B) appointing a receiver) as the Administrative Agent may
determine in good faith to be necessary or appropriate to protect the
Collateral.
(b) If the Required Lenders do not approve a pending Proposed Default
Response within 15 Business Days after submittal, the Proposed Default Response
shall be deemed rejected and the Required Lenders shall then be free to direct
the Administrative Agent regarding the actions to be taken or not taken in
response to the Event of Default, subject to the unanimous approval rights of
the Lenders pursuant to Section 8.01.
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ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. AMENDMENTS, ETC. No amendment or waiver of any provision
of this Agreement or the Notes or any other Loan Document, nor consent to any
departure by the Borrower or any other Loan Party therefrom, shall in any event
be effective unless the same shall be in writing and signed (or, in the case of
the Collateral Documents, consented to) by the Required Lenders (other than
Defaulting Lenders), and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given; PROVIDED,
HOWEVER, that (a) no amendment, waiver or consent shall, unless in writing and
signed by all of the Lenders (other than any Lender that is, at such time, a
Defaulting Lender), do any of the following at any time: (i) waive any of the
conditions specified in Section 3.01 or, in the case of Advances made on the
Closing Date, Section 3.02, (ii) change the designated percentage which
constitutes the Required Lenders,(iii) release all or substantially all of the
Collateral in any transaction or series of related transactions or permit the
creation, incurrence, assumption or existence of any Lien on all or
substantially all of the Collateral in any transaction or series of related
transactions to secure any Obligations other than Obligations owing to the
Administrative Agent and the Lender Parties under the Loan Documents, (iv)
amend this Section 8.01 or (v) release the Parent Guarantor from the Parent
Guaranty or any Operating Subsidiary from the Subsidiary Guaranty, (b) no
amendment, waiver or consent shall, unless in writing and signed by two-thirds
of the Lenders (other than any Lender that is, at such time, a Defaulting
Lender), do any of the following at any time: (i) change the definition of the
Borrowing Base Amount, (ii) changes to Section 5.05(b), (c) and (d), (iii)
changes to Section 2.05(b) and (iv) release any individual Borrowing Base
Property in any transaction or series of related transactions or permit the
creation, incurrence, assumption or existence of any Lien on any individual
Borrowing Base Property in any transaction or series of related transactions to
secure any Obligations other than Obligations owing to the Administrative Agent
and the Lender Parties under the Loan Documents and (c) no amendment, waiver or
consent shall, unless in writing and signed by the Required Lenders and each
Lender that has a Commitment under the Facility and that is directly affected
by such amendment, waiver or consent, (i) increase the Commitments of such
Lender or amend Section 2.12 so as to subject such Lender to additional
Obligations, (ii) reduce the principal of, or interest on, the Advances payable
to such Lender or any fees or other amounts payable to such Lender, (iii)
postpone any date scheduled for any payment of principal of, or interest on,
the Advances payable to such Lender pursuant to Section 2.03 or Section 2.06 or
any date fixed for payment of fees or other amounts payable to such Lender or
(iv) change the order of application of any prepayment set forth in Section
2.05 in any manner that materially adversely affects such Lender; PROVIDED
FURTHER that no amendment, waiver or consent shall, unless in writing and
signed by the Agents in addition to the Lenders required above to take such
action, affect the rights or duties of the Agents under this Agreement or the
other Loan Documents.
SECTION 8.02. NOTICES, ETC. All notices and other communications
provided for hereunder shall be in writing (including telegraphic, telecopy or
telex communication) and mailed, telegraphed, telecopied, telexed or delivered
by an overnight courier of nationally recognized standing, if to the Borrower
or any other Loan Party, at the address of the Borrower at 450 East Las Olas
Boulevard, Suite 1400, Ft. Lauderdale, Florida 33301, Attention: Chief
Financial Officer, telecopier number (954) 712-1315; if to any Initial Lender,
at its Domestic Lending Office specified opposite its name on Schedule I
hereto; if to any other Lender Party, at its Domestic Lending Office specified
in the
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Assignment and Acceptance pursuant to which it became a Lender Party; and if to
the Administrative Agent, at its address at 130 Liberty Street, New York, New
York 10006, Attention: Linda Wong, telecopier number (212) 669-0743; or, as to
each party, at such other address as shall be designated by such party in a
written notice to the other parties. All such notices and communications shall,
when mailed, telegraphed, telecopied, telexed or sent by courier, be effective
when deposited in the mails, delivered to the telegraph company, transmitted by
telecopier, confirmed by telex answerback or delivered to the overnight
courier, respectively, except that notices and communications to the
Administrative Agent pursuant to Article II, III or VII shall not be effective
until received by the Administrative Agent. Delivery by telecopier of an
executed counterpart of any amendment or waiver of any provision of this
Agreement or the Notes or of any Exhibit hereto to be executed and delivered
hereunder shall be effective as delivery of a manually executed counterpart
thereof.
SECTION 8.03. NO WAIVER; REMEDIES. No failure on the part of any
Lender Party or the Administrative Agent to exercise, and no delay in
exercising, any right hereunder or under the Notes shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right preclude
any other or further exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
SECTION 8.04. COSTS AND EXPENSES. (a) The Borrower agrees to pay on
demand (i) all costs and expenses of the Agents in connection with the
preparation, execution, delivery, administration, modification and amendment of
the Loan Documents (including, without limitation, (A) all due diligence,
collateral review, syndication, transportation, computer, duplication,
appraisal, audit, insurance, consultant, search, filing and recording fees and
expenses and (B) the reasonable fees and expenses of counsel for each of the
Agents with respect thereto, with respect to advising the Agents as to its
rights and responsibilities, or the perfection, protection or preservation of
rights or interests, under the Loan Documents, with respect to negotiations
with any Loan Party or with other creditors of any Loan Party or any of its
Subsidiaries arising out of any Default or any events or circumstances that may
give rise to a Default and with respect to presenting claims in or otherwise
participating in or monitoring any bankruptcy, insolvency or other similar
proceeding involving creditors' rights generally and any proceeding ancillary
thereto) and (ii) all costs and expenses of the Agents and the Lender Parties
in connection with the enforcement of the Loan Documents, whether in any
action, suit or litigation, any bankruptcy, insolvency or other similar
proceeding affecting creditors' rights generally (including, without
limitation, the reasonable fees and expenses of counsel for the Agents and each
Lender Party with respect thereto).
(b) (i) To the fullest extent permitted by applicable law,
the Loan Parties agree, jointly and severally, to indemnify and hold harmless
each of the Administrative Agent and Syndication Agent, the Lenders and the
affiliated entities, directors, officers, employees, legal counsel, agents and
controlling persons (within the meaning of the federal securities laws) of each
of the Administrative Agent and Syndication Agent and the other Lenders (all of
the foregoing, collectively, the "INDEMNIFIED PARTIES"), from and against any
and all losses, claims, damages, obligations, penalties, judgments, awards,
liabilities, costs, expenses and disbursements and any and all actions, suits,
proceedings and investigations in respect thereof and any and all legal or
other costs, expenses and disbursements in giving testimony or furnishing
documents in response to a subpoena or otherwise (including, without
limitation, the costs, expenses and disbursements, as and when incurred, of
investigating, preparing or defending any such action, proceeding or
investigation (whether or not in connection with litigation in which any of the
Indemnified Parties is a party) and including, without
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limitation, any and all losses, claims, damages, obligations, penalties,
judgments, awards, liabilities, costs, expenses and disbursements, resulting
from any negligent act or omission of any of the Indemnified Parties), directly
or indirectly, caused by, relating to, based upon, arising out of or in
connection with (i) the Transaction, (ii) the Transaction Documents, (iii) Fee
Letters, or (iii) any untrue statement or alleged untrue statement of a
material fact contained in, or omissions or alleged omissions from any filing
with any governmental agency or similar statements or omissions in or from any
information furnished by the Parent Guarantor or any of its Subsidiaries or
Affiliates to any of the Indemnified Parties or any other person in connection
with the Transaction or the Transaction Documents, PROVIDED, HOWEVER, such
indemnity agreement shall not apply to any portion of any such loss, claim,
damage, obligation, penalty, judgment, award, liability, cost, expense or
disbursement to the extent it is found in a final judgment by a court of
competent jurisdiction (not subject to further appeal) to have resulted
primarily and directly from the gross negligence or willful misconduct of any
of the Indemnified Parties. The indemnification provisions contained in this
Section 8.04(b) shall be in addition to any liability which any Loan Party may
have to the Indemnified Parties. If any action, suit, proceeding or
investigation is commenced, as to which any of the Indemnified Parties proposes
to demand indemnification, it shall notify the Borrower with reasonable
promptness; PROVIDED, HOWEVER, that any failure by any of the Indemnified
Parties to so notify the Borrower shall not relieve the Borrower or any other
Loan Party from its obligations hereunder. Each of the Administrative Agent and
Syndication Agent, on behalf of the Indemnified Parties, shall have the right
to retain counsel of its choice to represent the Indemnified Parties, and the
Borrower shall, or shall cause the other Loan Parties, jointly and severally,
to pay the fees, expenses and disbursement of such counsel; and such counsel
shall, to the extent consistent with its professional responsibilities,
cooperate with the Borrower and the other Loan Parties and any counsel
designated by the Borrower or the other Loan Parties. The Borrower and the Loan
Parties shall be jointly and severally liable for any settlement of any claim
against any of the Indemnified Parties made with the Borrower's written
consent, which consent shall not be unreasonably withheld. Without the prior
written consent of the Agents, the Borrower shall not, and shall not permit any
of the other Loan Parties to, settle or compromise any claim, or permit a
default or consent to the entry of any judgment in respect thereof, unless such
settlement, compromise or consent includes, as an unconditional term thereof,
the giving by the claimant to each of the Indemnified Parties of an
unconditional and irrevocable release from all liability in respect of such
claim. No party hereto liable for any damages hereunder to any other party
shall ever be liable for any special, indirect or consequential damages or, to
the fullest extent that a claim for punitive damages may lawfully be waived,
for any punitive damages on any claim (whether founded in contract, tort, legal
duty or any other theory of liability) arising from or related in any manner to
the Loan Documents or the negotiation, execution, administration, performance,
breach or enforcement of the Loan Documents or any amendment thereto or the
consummation of, or any failure to consummate, the Transaction or any act,
omission, breach or wrongful conduct in any manner related thereto.
(ii) In order to provide for just and equitable contribution,
if a claim for indemnification pursuant to the indemnification provisions of
this Section 8.04(b) is made but is found in a final judgment by a court of
competent jurisdiction (not subject to further appeal) that such
indemnification may not be enforced in such case, even though the express
provisions hereof provide for indemnification in such case, then the Borrower
and other Loan Parties, if any, on the one hand, and the Indemnified Parties,
on the other hand, shall contribute to the losses, claims, damages,
obligations, penalties, judgments, awards, liabilities, costs, expenses and
disbursements to which the Indemnified Parties may be subject in accordance
with the relative benefits received by the Borrower
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and the other Loan Parties, on the one hand, and the Indemnified Parties, on
the other hand, and also the relative fault of the Borrower and the other Loan
Parties, on the one hand, and the Indemnified Parties, on the other hand, in
connection with the statements, acts or omissions which resulted in such
losses, claims, damages, obligations, penalties, judgments, awards,
liabilities, costs, expenses and disbursements and the relevant equitable
considerations shall also be considered. No person found liable for a
fraudulent misrepresentation shall be entitled to contribution from any other
person who is not also found liable for such fraudulent misrepresentation.
Notwithstanding the foregoing, none of the Indemnified Parties shall be
obligated to contribute any amount hereunder that exceeds the amount of fees
(but not interest) previously received by such Indemnified Party pursuant to
the Transaction Documents.
(iii) This Agreement does not create, and shall not be
construed as creating, any rights enforceable by a person or entity not a party
hereto, except as provided in this Section 8.04(b) . The Borrower, on behalf of
itself and each other Loan Party, acknowledges and agrees that: (i) none of the
Agents or Lenders is, nor shall any one of them be construed as, a fiduciary or
agent of any Loan Party or any other person and shall have no duties or
liabilities to any such person's equity holders or creditors by virtue of this
Agreement, which is hereby expressly waived, and none of the Agents has been
retained to advise or has advised the Borrower regarding the wisdom, prudence
or advisability of entering into this Agreement or consummating the
Transaction; (ii) none of the Agents or Lenders shall have any liability
(including, without limitation, liability for any losses, claims, damages,
obligations, penalties, judgments, awards, liabilities, costs, expenses or
disbursements resulting from any negligent act or omission of any of them)
(whether direct or indirect, in contract, tort or otherwise) to the Borrower or
any other Loan Party (including, without limitation, their respective equity
holders and creditors) or any other person for or in connection with this
Agreement or the Transaction, except that a claim in contract for actual direct
damages directly and proximately caused by a breach of any contractual
obligation expressly set forth in any written agreement signed by the party
against which enforcement of such claim is sought shall not be impaired hereby
and (iii) each of the Agents was induced to enter into this Agreement by, INTER
ALIA, this Article VIII.
(c) If any payment of principal of, or Conversion of, any
Eurodollar Rate Advance is made by the Borrower to or for the account of a
Lender Party other than on the last day of the Interest Period for such
Advance, as a result of an assignment in connection with a syndication of the
Facility during the period from the Closing Date to the earlier of (x) three
months from such Date and (y) the completion of syndication of the Facility (as
shall be specified by the Syndication Agent in a written notice to the
Borrower), a payment or Conversion pursuant to Section 2.05, 2.08(b)(i) or
2.09(d), acceleration of the maturity of the Advances pursuant to Section 6.01
or for any other reason or by an Eligible Assignee to a Lender Party other than
on the last day of the Interest Period for such Advance upon an assignment of
rights and obligations under this Agreement pursuant to Section 8.07 as a
result of a demand by the Borrower pursuant to Section 8.07(a), the Borrower
shall, upon demand by such Lender Party (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the account of such
Lender Party any amounts required to compensate such Lender Party for any
additional losses, costs or expenses that it may reasonably incur as a result
of such payment, including, without limitation, any loss (including loss of
anticipated profits), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by any Lender Party to fund or
maintain such Advance.
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(d) If any Loan Party fails to pay when due any costs,
expenses or other amounts payable by it under any Loan Document, including,
without limitation, fees and expenses of counsel and indemnities, such amount
may be paid on behalf of such Loan Party by the Administrative Agent or any
Lender Party, in its sole discretion.
(e) Without prejudice to the survival of any other agreement
of any Loan Party hereunder or under any other Loan Document, the agreements
and obligations of the Borrower contained in Sections 2.09 and 2.11 and this
Section 8.04 shall survive the payment in full of principal, interest and all
other amounts payable hereunder and under any of the other Loan Documents.
SECTION 8.05. RIGHT OF SET-OFF. Upon (a) the occurrence and
during the continuance of any Event of Default and (b) the making of the
request or the granting of the consent specified by Section 6.01 to authorize
the Administrative Agent to declare the Advances due and payable pursuant to
the provisions of Section 6.01, each Lender Party and each of its respective
Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and otherwise apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Lender Party or such
Affiliate to or for the credit or the account of the Borrower against any and
all of the Obligations of the Borrower now or hereafter existing under this
Agreement and the Note or Notes held by such Lender Party, irrespective of
whether such Lender Party shall have made any demand under this Agreement or
such Note or Notes and although such obligations may be unmatured. Each Lender
Party agrees promptly to notify the Borrower after any such set-off and
application; PROVIDED, HOWEVER, that the failure to give such notice shall not
affect the validity of such set-off and application. The rights of each Lender
Party and its respective Affiliates under this Section are in addition to other
rights and remedies (including, without limitation, other rights of set-off)
that such Lender Party and its respective Affiliates may have. Notwithstanding
anything in the foregoing to the contrary, no Lender Party shall exercise any
right of set-off against any Loan Party with respect to the Borrower's
Obligations under the Loan Documents without the prior written consent of the
Administrative Agent if the exercise of such right could limit or adversely
affect the remedies available to the Lender Parties or restrict the order of
the exercise of such remedies under any law applicable to the parties or to the
exercise of any such remedies. If any Lender Party shall receive any payment or
proceeds from any Loan Party in respect of the Obligations, such Person shall
immediately pay such amounts to the Administrative Agent for distribution to
the other Lender Parties in accordance with this Agreement and the other Loan
Documents. In the event that any such Lender Party improperly exercises any
right of set off in violation of the terms of this Agreement, then such Person
shall indemnify, defend and hold harmless the Administrative Agent and each of
the other Persons among the Lender Parties from any loss or injury that may
result from such Person's exercise of its right of set off.
SECTION 8.06. BINDING EFFECT. This Agreement shall become
effective when it shall have been executed by the Borrower and the Agents and
when the Administrative Agent shall have been notified by each Initial Lender
that such Initial Lender has executed it and thereafter shall be binding upon
and inure to the benefit of the Borrower, the Agents and each Lender Party and
their respective successors and assigns, except that the Borrower shall not
have the right to assign its rights hereunder or any interest herein without
the prior written consent of the Lender Parties.
SECTION 8.07. ASSIGNMENTS AND PARTICIPATIONS. (a) Each Lender
may assign to one or more Eligible Assignees all or a portion of its rights and
obligations under this Agreement
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(including, without limitation, all or a portion of its Commitment or
Commitments, the Advances owing to it and the Note or Notes held by it);
PROVIDED, HOWEVER, that (i) each such assignment shall be of a uniform, and not
a varying, percentage of all rights and obligations under and in respect of the
Facility, (ii) except in the case of an assignment to a Person that,
immediately prior to such assignment, was a Lender, an Affiliate of any Lender
or an Approved Fund of any Lender or an assignment of all of a Lender's rights
and obligations under this Agreement, the aggregate amount of the Commitments
being assigned to such Eligible Assignee pursuant to such assignment
(determined as of the date of the Assignment and Acceptance with respect to
such assignment) shall in no event be less than $5,000,000 and shall be in an
integral multiple of $500,000, (iii) each such assignment shall be to an
Eligible Assignee, and (iv) the parties to each such assignment shall execute
and deliver to the Administrative Agent, for its acceptance and recording in
the Register, an Assignment and Acceptance, together with the Note or Notes
subject to such assignment and a processing and recordation fee of $3,500.
(b) Upon such execution, delivery, acceptance and recording,
from and after the effective date specified in such Assignment and Acceptance,
(x) the assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, have the rights and obligations of a Lender
hereunder and (y) the Lender assignor thereunder shall, to the extent that
rights and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto).
(c) By executing and delivering an Assignment and Acceptance,
each Lender Party assignor thereunder and each assignee thereunder confirm to
and agree with each other and the other parties thereto and hereto as follows:
(i) other than as provided in such Assignment and Acceptance, such assigning
Lender Party makes no representation or warranty and assumes no responsibility
with respect to any statements, warranties or representations made in or in
connection with this Agreement or any other Loan Document or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of, or
the perfection or priority of any lien or security interest created or
purported to be created under or in connection with, this Agreement or any
other Loan Document or any other instrument or document furnished pursuant
hereto or thereto; (ii) such assigning Lender Party makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of the Borrower or any other Loan Party or the performance or observance by any
Loan Party of any of its obligations under any Loan Document or any other
instrument or document furnished pursuant thereto; (iii) such assignee confirms
that it has received a copy of this Agreement, together with copies of the
financial statements referred to in Section 4.01 and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon the Agents, such assigning Lender Party
or any other Lender Party and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under this Agreement; (v) such assignee confirms
that it is an Eligible Assignee; (vi) such assignee appoints and authorizes the
Administrative Agent to take such action as Administrative Agent on its behalf
and to exercise such powers and discretion under the Loan Documents as are
delegated to the Administrative Agent by the terms hereof, together with such
powers and discretion as are reasonably incidental thereto; and (vii) such
assignee agrees that it will perform in accordance with
76
<PAGE> 80
their terms all of the obligations which by the terms of this Agreement are
required to be performed by it as a Lender.
(d) The Administrative Agent shall maintain at its address
referred to in Section 8.02 a copy of each Assignment and Acceptance delivered
to and accepted by it and a register for the recordation of the names and
addresses of the Lender Parties and the Commitment under the Facility of, and
principal amount of the Advances owing under the Facility to, each Lender Party
from time to time (the "REGISTER"). The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Agents and the Lender Parties may treat each Person whose name is
recorded in the Register as a Lender Party hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower or
any Lender Party at any reasonable time and from time to time upon reasonable
prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender Party and an assignee, together with the Note or Notes
requested by the Assignee subject to such assignment, the Administrative Agent
shall, if such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit C hereto, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the Borrower.
(f) Each Lender Party may sell participations in or to all or
a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Commitments, the Advances owing to
it and the Note or Notes held by it) to any Person other than any Loan Party or
any of its Subsidiaries or Affiliates; PROVIDED, HOWEVER, that (i) such Lender
Party's obligations under this Agreement (including, without limitation, its
Commitments) shall remain unchanged, (ii) such Lender Party shall remain solely
responsible to the other parties hereto for the performance of such
obligations, (iii) such Lender Party shall remain the holder of such Advances
and such Note for all purposes of this Agreement, (iv) the Borrower, the Agents
and the other Lender Parties shall continue to deal solely and directly with
such Lender Party in connection with such Lender Party's rights and obligations
under this Agreement and (v) no participant under any such participation shall
have any right to approve any amendment or waiver of any provision of any Loan
Document, or any consent to any departure by any Loan Party therefrom, except
to the extent that such amendment, waiver or consent would reduce the principal
of, or interest on, the Advances or any fees or other amounts payable
hereunder, in each case to the extent subject to such participation, postpone
any date fixed for any payment of principal of, or interest on, the Advances or
any fees or other amounts payable hereunder, in each case to the extent subject
to such participation, or release all or substantially all of the Collateral.
(g) Any Lender Party may, in connection with any assignment
or participation or proposed assignment or participation pursuant to this
Section 8.07, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrower furnished to such Lender
Party by or on behalf of the Borrower.
(h) Notwithstanding any other provision set forth in this
Agreement, any Lender Party may at any time create a security interest in all
or any portion of its rights under this Agreement (including, without
limitation, the Advances owing to it and the Note or Notes held by it) in favor
of
77
<PAGE> 81
any Federal Reserve Bank in accordance with Regulation A of the Board of
Governors of the Federal Reserve System.
SECTION 8.08. EXECUTION IN COUNTERPARTS. This Agreement may
be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 8.09. JURISDICTION, ETC. (a) Each of the parties
hereto hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or any of the other Loan Documents to which it is a
party, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in any
such New York State court or, to the extent permitted by law, in such federal
court. Each of the parties hereto agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that any party may otherwise
have to bring any action or proceeding relating to this Agreement or any of the
other Loan Documents in the courts of any jurisdiction.
(b) Each of the parties hereto irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection that it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement or
any of the other Loan Documents to which it is a party in any New York State or
federal court. Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.
SECTION 8.10. GOVERNING LAW. This Agreement and the Notes
shall be governed by, and construed in accordance with, the laws of the State
of New York.
SECTION 8.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO
IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY CLAIM,
ACTION, SUIT OR PROCEEDING ARISING OUT OF THIS AGREEMENT OR THE TRANSACTIONS OR
THE MATTERS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY HEREBY SUBMITS TO THE
EXCLUSIVE JURISDICTION OF THE FEDERAL AND NEW YORK COURTS LOCATED IN THE CITY
OF NEW YORK IN CONNECTION WITH ANY DISPUTE RELATED TO THIS AGREEMENT, THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY MATTERS RELATED TO THIS
AGREEMENT. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT.
78
<PAGE> 82
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
FLORIDA PANTHERS HOTEL
CORPORATION, as the Borrower
By: /s/ William M. Pierce
------------------------------------
Title: Senior Vice President
BEAR, STEARNS & CO. INC.,
as Syndication Agent and Secured Party
By: /s/ Michael Offen
-------------------------------------
Title: Senior Managing Director
BANKERS TRUST COMPANY,
as Administrative Agent and Initial Lender
and Secured Party
By: /s/ Laura P. Burwick
-------------------------------------
Title: Principal
BEAR STEARNS CORPORATE LENDING
INC., as Initial Lender and Secured Party
By: /s/ Michael Offen
---------------------------------------
Title: Senior Managing Director
79
<PAGE> 83
<TABLE>
<CAPTION>
SCHEDULES
<S> <C> <C>
Schedule I - Commitments and Applicable Lending Offices
Schedule 3.01(a)(iii)(G) - Blocked Account Banks
Schedule 3.01(a)(vi) - Subsidiary Guarantors
Schedule 3.01(a)(xi) - Secretary of State Certificates
Schedule 3.01(a)(xix) - Insurance
Schedule 3.01(h) - Surviving Debt
Schedule 4.01(a) - Equity Interests
Schedule 4.01(b) - Subsidiary Guarantors with Interests in Operating Subsidiaries
Schedule 4.01(d) - Authorizations, Approvals, Actions, Notices and Filings
Schedule 4.01(h) - Litigation
Schedule 4.01(m)(vi) - Plans, Multiemployer Plans and Welfare Plans
Schedule 4.01(o) - Open Years
Schedule 4.01(q) - Existing Debt (other than Surviving Debt)
Schedule 4.01(s) - Leased Real Property
Schedule 4.01(t) - Investments
Schedule 4.01(u) - Intellectual Property
Schedule 4.01(v) - Existing Liens
Schedule 5.01(w) - Engineering Matters
</TABLE>
<PAGE> 84
EXHIBITS
<TABLE>
<CAPTION>
<S> <C> <C>
Exhibit A - Form of Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Assignment and Acceptance
Exhibit D-1 - Form of Subsidiary Guarantor Security Agreement
Exhibit D-2 - Form of Parent Guarantor Security Agreement
Exhibit E - Form of Mortgage
Exhibit F-1 - Form of Parent Guaranty
Exhibit F-2 - Form of Subsidiary Guaranty
Exhibit G - Form of Borrowing Base Certificate
Exhibit H-1 - Form of Parent Guarantor Solvency Certificate
Exhibit H-2 - Form of Operating Subsidiary Solvency Certificate
Exhibit I-1 - Form of Opinion of Akerman, Senterfitt & Eidson, P.A., Counsel to the Loan
Parties
Exhibit I-2 - Form of Opinion of Paul, Hastings, Janofsky & Walker LLP, Special Counsel
to the Loan Parties
Exhibit J - Form of Indemnification Agreement
Exhibit K - Form of Survey Recertification
Exhibit L - Rent Roll
Exhibit M - Form of Notice to Tenants
Exhibit N - Form of Environmental Indemnity Agreement
</TABLE>
<PAGE> 1
EXHIBIT 5.1
May 6, 1999
Florida Panthers Holdings, Inc.
450 East Las Olas Boulevard, Suite 1400
Fort Lauderdale, FL 33301
RE: REGISTRATION STATEMENT ON FORM S-4
----------------------------------
Ladies and Gentlemen:
We have acted as counsel to Florida Panthers Holdings, Inc., a Delaware
corporation (the "Company"), in connection with the preparation and filing by
the Company with the Securities and Exchange Commission of a Registration
Statement on Form S-4, including amendments thereto, (the "Registration
Statement"), for the proposed offer by the Company to exchange (the "Exchange
Offer") 9 7/8% Senior Subordinated Notes due 2009 (the "New Notes") for an equal
principal amount of its outstanding 9 7/8% Senior Subordinated Notes due 2009
(the "Old Notes").
In connection with the proposed Exchange Offer, we have examined the
Company's Certificate of Incorporation and By-laws, as amended and as presently
in effect, the Company's relevant corporate proceedings, the Registration
Statement, including the Prospectus filed as a part of the Registration
Statement (the "Prospectus"), the Indenture dated April 21, 1999, in respect
of the Old Notes and the New Notes (the "Indenture"), and such other documents,
records, certificates of public officials, statutes and decisions as we
considered necessary to express the opinions contained herein. In the
examination of such documents, we have assumed the genuineness of all signatures
and the authenticity of all documents submitted to us as originals and the
conformity to the original documents of all documents submitted to us as
certified or photostatic copies.
We understand that the New Notes are to be issued to the holders of the
Old Notes pursuant to the Exchange Offer and are to be available for resale by
such holders, all in the manner described in the Prospectus and in the
Indenture.
Based on the foregoing and upon the representations made to us by the
officers and directors of the Company, we are of the opinion that when the
Registration Statement has been declared effective by order of the Securities
and Exchange Commission and the New Notes have been duly issued to and exchanged
for the Old Notes, all in accordance with the terms of the Exchange Offer, the
Indenture and the Registration Statement, such New Notes will be validly issued,
fully paid and non-assessable, and will constitute binding obligations of the
Company, subject to (a) any applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws relating to or affecting
creditors' rights and remedies generally and (b) general principles of judicial
discretion and equity, including principles of commercial reasonableness, good
faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity or in a bankruptcy proceeding and except that (i)
rights to contribution or indemnification may be limited by the laws, rules or
regulations of any governmental authority or agency thereof or by public policy
and (ii) waivers as to usury, stay or extension laws may be unenforceable).
This firm consents to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to the firm under the caption "Legal
Matters" in the Prospectus. In giving such consent, we do not thereby admit that
we are included within the category of persons whose consent is required under
Section 7 of the Securities Act of 1933, as amended and the rules and
regulations promulgated thereunder.
Sincerely,
AKERMAN, SENTERFITT & EIDSON, P.A.
/s/ AKERMAN, SENTERFITT & EIDSON P.A.
<PAGE> 1
Exhibit 12.1
Computation of Ratio of Earnings to Fixed Charges
<TABLE>
<CAPTION>
Six Months
Year Ending June 30, Ending December 31,
---------------------------------------------------------------- -------------------------------
Pro Forma Pro Forma
1994 1995 1996 1997 1998 1998 1997 1998 1998
---- ---- ---- ---- ---- --------- ------ ---- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Earnings:
Income (loss) before taxes $(12,926) $(15,386) $(25,139) $(10,260) $ 1,273 $(11,724) $(10,996) $(11,060) $(12,415)
Fixed charges 2,528 3,741 5,030 3,364 25,973 50,774 6,663 25,206 26,561
------------------------------------------------------ -------- --------------------- --------
Earnings $(10,398) $(11,645) $(20,109) $ (6,896) $ 27,246 $ 39,050 $ (4,333) $ 14,146 $ 14,146
Fixed Charges:
Interest expense $ 2,528 $ 3,741 $ 5,030 $ 3,364 $ 24,673 $ 49,474 $ 6,663 $ 23,217 $ 24,572
Capitalized interest -- -- -- -- 1,300 1,300 -- 1,989 1,989
------------------------------------------------------ -------- --------------------- --------
Total fixed charges $ 2,528 $ 3,741 $ 5,030 $ 3,364 $ 25,973 $ 50,774 $ 6,663 $ 25,206 $ 26,561
Ratio of earnings to fixed charges (4.1) (3.1) (4.0) (2.0) 1.0 0.8 (0.7) 0.6 0.5
====================================================== ======== ===================== ========
</TABLE>
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
As independent certified public accountants, we hereby consent to the use of
our reports (and to all references to our Firm) included in or made a part of
this registration statement.
/s/ ARTHUR ANDERSEN LLP
- -----------------------------
ARTHUR ANDERSEN LLP
Fort Lauderdale, Florida,
May 5, 1999.
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the use of our report dated April 19, 1996, with respect to the
financial statements of 2301 SE 17th St., Ltd., included in this registration
statement of Florida Panthers Holdings, Inc. filed on Form S-4 to the reference
to our firm under the heading "Experts".
/s/ KPMG LLP
----------------------
KPMG LLP
Fort Lauderdale, Florida
May 5, 1999
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the use in this Registration Statement on Form S-4 of
Florida Panthers Holdings, Inc. of our report dated January 29, 1997, except as
to the subsequent event described in Note 12 which is as of March 20, 1997,
relating to the financial statements of the Boca Raton Hotel and Club Limited
Partnership, which appear in such Registration Statement. We also consent to the
reference to us under the heading "Experts" in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
- ------------------------------
PricewaterhouseCoopers LLP
Fort Lauderdale, Florida
May 5, 1999
<PAGE> 1
EXHIBIT 23.4
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the reference to our firm under the caption "Experts" and to the
use of our report dated January 26, 1996, with respect to the financial
statements of Boca Raton Hotel and Club Limited Partnership included in the
Registration Statement (Form S-4) and related Prospectus of Florida Panthers
Holdings, Inc. for the registration of $340,000,000 9 7/8% senior subordinated
notes.
/s/ Ernst & Young LLP
------------------------------
ERNST & YOUNG LLP
West Palm Beach, Florida
May 5, 1999
<PAGE> 1
EXHIBIT 23.5
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" and
to the use of our reports (a) dated February 5, 1998 (except Note 8, as
to which the date is March 2, 1998) with respect to the financial
statements of Biltmore Hotel Partners and (b) dated May 4, 1998 with
respect to the Historical Summaries of the Rental Pool Operations of
the Biltmore Villas included in the Registration Statement (Form S-4)
and related Prospectus of Florida Panthers Holdings, Inc. for the
registration of $340,000,000 9 7/8% senior subordinated notes.
/s/ ERNST & YOUNG LLP
----------------------------
ERNST & YOUNG LLP
Phoenix, Arizona
May 5, 1999
<PAGE> 1
EXHIBIT 25.1
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) [ ]
---------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
---------------
FLORIDA PANTHERS HOLDINGS, INC.
(Exact name of obligor as specified in its charter)
Delaware 65-0676005
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
TABLE OF ADDITIONAL REGISTRANTS
-------------------------------
2301 Mgt., Ltd. Florida
2301 SE 17th St, Inc. Florida
2301 SE 17th St., Ltd. Florida
Arena Development Company, Inc. Florida
Arena Development Company, Ltd. Florida
Arena Operating Company, Inc. Florida
Arena Operating Company, Ltd. Florida
Biltmore Hotel Partners, L.L.L.P. Arizona
Boca By Design, Inc. Florida
Boca Raton Caterers, Inc. Florida
Boca Raton Resort and Club, Inc. Florida
Coyote Holdings, Inc. Delaware
Decoma Investment, Inc. I Texas
Decoma Investment, Inc. II Texas
Desert Jewel Destinations LLC Arizona
Florida Golf Management, Inc. Florida
Florida Hospitality Services, Inc. Florida
Florida Panthers Hockey Club, Inc. Florida
Florida Panthers Hockey Club, Ltd. Florida
Florida Panthers Hotel Corporation Delaware
Florida Panthers Ice Ventures, Inc. Florida
Florida Panthers Naples, Inc. Florida
FPH Management, Inc. Florida
<PAGE> 2
FPH/RHI Merger Corp., Inc. Florida
LeHill Partners L.P. Delaware
Mizner Center, Inc. Florida
Panthers AHL Hockey Corp. Florida
Panthers Boca General Partner, Inc. Florida
Panthers Boca Limited Partner, Inc. Florida
Panthers BRGP Corporation Florida
Panthers BRHC Limited Florida
Panthers BRHC Management Corporation Florida
Panthers BRLP Corporation Florida
Panthers Edgewater Resort, Inc. Delaware
Panthers Grey Oaks, Inc. Florida
Panthers Plantation Golf, Inc. Florida
Panthers RPN Limited Florida
Pelican Hill Associates, L.P. Delaware
PER, L.L.C. Delaware
Rahn Bahia, Inc. Florida
Rahn Bahia Mar, G.P., Ltd. Florida
Rahn Bahia Mar, Inc. Florida
Rahn Bahia Mar, Ltd. Florida
Rahn Bahia Mar Mgmt., Inc. Florida
Rahn Pier, Inc. Florida
Rahn Pier Mgt., Inc. Florida
ResortHill, Inc. Illinois
Wright-Bilt Corp. Delaware
450 East Las Olas Boulevard
Fort Lauderdale, FL 33301
(Address of principal executive offices) (Zip code)
----------------------
9 7/8% Senior Subordinated Notes due 2009
(Title of the indenture securities)
================================================================================
-2-
<PAGE> 3
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE
TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO
WHICH IT IS SUBJECT.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
<S> <C>
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
</TABLE>
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION,
ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO
RULE 7a-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17
C.F.R. 229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains
the authority to commence business and a grant of powers to
exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to
Form T-1 filed with Registration Statement No. 33-6215, Exhibits
1a and 1b to Form T-1 filed with Registration Statement No.
33-21672 and Exhibit 1 to Form T-1 filed with Registration
Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form
T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or
examining authority.
-3-
<PAGE> 4
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the ____ day of May, 1999.
THE BANK OF NEW YORK
By: /s/ MARIE E. TRIMBOLI
----------------------------------
Name: MARIE E. TRIMBOLI
Title: ASSISTANT TREASURER
-4-
<PAGE> 1
Exhibit 99.1
FORM OF
LETTER OF TRANSMITTAL
Offer For Any and All Outstanding
9 7/8% Senior Subordinated Notes due 2009
in Exchange for
9 7/8% Senior Subordinated Notes due 2009
Which Have Been Registered Under The Securities Act of 1933
Pursuant to the Prospectus dated May __, 1999
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON JUNE __, 1999, UNLESS THE OFFER IS EXTENDED. TENDERS MAY BE WITHDRAWN
PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.
The Exchange Agent For The Exchange Offer Is:
The Bank Of New York
<TABLE>
<CAPTION>
BY HAND OR OVERNIGHT DELIVERY: Facsimile Transmissions: BY REGISTERED OR CERTIFIED MAIL:
(Eligible Institutions Only)
<S> <C> <C>
The Bank of New York The Bank of New York
101 Barclay Street (212) 571-3080 101 Barclay Street, 7E
Corporate Trust Services Window New York, New York 10286
Ground Level To Confirm by Telephone Attention: Reorganization Section
Attention: Reorganization Section or for Information Call:
(212) 815-6333
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER
THAN AS SET FORTH ABOVE OR TRANSMISSION OF THIS LETTER OF TRANSMITTAL VIA
FACSIMILE TO A NUMBER OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID
DELIVERY.
The undersigned acknowledges that he or she has received the
Prospectus, dated: May __, 1999 (the "Prospectus"), of Florida Panthers
Holdings, Inc., a Delaware corporation ("Panthers Holdings"), and this Letter of
Transmittal, which together constitute Panthers Holdings' offer (the "Exchange
Offer") to exchange an aggregate Principal Amount of up to $340,000,000 9 7/8%
Senior Subordinated Notes due 2009, (the "Old Notes") of Panthers Holdings for a
like aggregate Principal Amount of the issued and outstanding 9 7/8% Senior
Subordinated Notes due 2009 which have been registered under the Securities Act
of 1933, as amended (the "Securities Act") (the "New Notes") of Panthers
Holdings.
<PAGE> 2
THE INSTRUCTIONS CONTAINED HEREIN SHOULD BE READ CAREFULLY BEFORE THIS
LETTER OF TRANSMITTAL IS COMPLETED.
Capitalized terms used but not defined herein shall have the same
meaning given them in the Prospectus (as defined below).
This Letter of Transmittal is to be completed by holders of Old Notes
(as defined below) either if Old Notes are to be forwarded herewith or if
tenders of Old Notes are to be made by book-entry transfer to an account
maintained by The Bank of New York (the "Exchange Agent") at The Depository
Trust Company (the "Book-Entry Transfer Facility" or "DTC") pursuant to the
procedures set forth in "The Exchange Offer--Procedures for Tendering Old Notes"
in the Prospectus.
Holders of Old Notes whose certificates (the "Certificates") for such
Old Notes are not immediately available or who cannot deliver their Certificates
and all other required documents to the Exchange Agent on or prior to the
Expiration Date (as defined in the Prospectus) or who cannot complete the
procedures for book-entry transfer on a timely basis, must tender their Old
Notes according to the guaranteed delivery procedures set forth in "The Exchange
Offer--Procedures for Tendering Old Notes" in the Prospectus.
DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY DOES NOT
CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
The undersigned has completed the appropriate boxes below and signed
this Letter of Transmittal to indicate the action the undersigned desires to
take with respect to the Exchange Offer.
2
<PAGE> 3
<TABLE>
<CAPTION>
DESCRIPTION OF OLD NOTES 1 2 3
- ------------------------------------- ----------- ----------- ------------
<S> <C> <C> <C>
Aggregate Principal
Principal Amount of
Name(s) and Address(s) of Registered Holder(s): Certificate Amount Old Notes
(Please fill in, if blank) Number(s)* Old Notes Tendered**
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Total
----------------------------------------------------------------------------------------------------------------------
</TABLE>
* Need not be completed if Old Notes are being tendered by book-entry
holders.
** Old Notes may be tendered in whole or in part in denominations of $1,000
and integral multiples thereof, provided that if any Old Notes are
tendered for exchange in part, the untendered principal amount thereof
must be $1,000 and any integral multiple thereof. See Instruction 4.
Unless otherwise indicated in the column, a holder will be deemed to have
tendered all Old Notes represented by the Old Notes indicated in Column 2.
See Instruction 4.
(BOXES BELOW TO BE CHECKED BY ELIGIBLE INSTITUTIONS ONLY)
/ / CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE
BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING:
Name of Tendering Institution
-----------------------------------------
Account Number
--------------------------------------------------------
Transaction Code Number
-----------------------------------------------
/ / CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY
IF TENDERED OLD NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE
FOLLOWING:
Name of Registered Holder(s)
------------------------------------------
3
<PAGE> 4
Window Ticket Number (if any)
-----------------------------------------
Date of Execution of Notice of Guaranteed Delivery
--------------------
Name of Institution which Guaranteed Delivery
-------------------------
If Guaranteed Delivery is to be made By Book-Entry Transfer:
Name of Tendering Institution
----------------------------------------
Account Number
--------------------------------------------------------
Transaction Code Number
-----------------------------------------------
/ / CHECK HERE IF TENDERED BY BOOK-ENTRY TRANSFER AND NON-EXCHANGED OLD
NOTES ARE TO BE RETURNED BY CREDITING THE BOOK-ENTRY TRANSFER FACILITY
ACCOUNT NUMBER SET FORTH ABOVE.
/ / CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED THE OLD NOTES FOR
ITS OWN ACCOUNT AS A RESULT OF MARKET MAKING OR OTHER TRADING
ACTIVITIES (A "PARTICIPATING BROKER- DEALER") AND WISH TO RECEIVE 10
ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR
SUPPLEMENTS THERETO.
Name:
--------------------------------------------------------------------------
Address:
-----------------------------------------------------------------------
Ladies and Gentlemen:
----------------------------------------------------------
Upon the terms and subject to the conditions of the Exchange Offer, the
undersigned hereby tenders to Panthers Holdings, the above described aggregate
Principal Amount of the Panthers Holdings' 9 7/8% Senior Subordinated Notes due
2009 (the "Old Notes") in exchange for a like aggregate Principal Amount of
Panthers Holdings' 9 7/8% Senior Subordinated Notes due 2009 (the "New Notes")
which have been registered under the Securities Act upon the terms and subject
to the conditions set forth in the Prospectus dated May __, 1999 (as the same
may be amended or supplemented from time to time, the "Prospectus"), receipt of
which is acknowledged, and in this Letter of Transmittal (which, together with
the Prospectus, constitute the "Exchange Offer").
4
<PAGE> 5
Subject to and effective upon the acceptance for exchange of all or any
portion of the Old Notes tendered herewith in accordance with the terms and
conditions of the Exchange Offer (including, if the Exchange Offer is extended
or amended, the terms and conditions of any such extension or amendment), the
undersigned hereby sells, assigns and transfers to or upon the order of Panthers
Holdings all right, title and interest in and to such Old Notes as are being
tendered herewith. The undersigned hereby irrevocably constitutes and appoints
the Exchange Agent as its agent and attorney-in-fact (with full knowledge that
the Exchange Agent is also acting as agent of Panthers Holdings in connection
with the Exchange Offer) with respect to the tendered Old Notes, with full power
of substitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest) subject only to the right of withdrawal described in
the Prospectus, to (i) deliver Certificates for Old Notes to Panthers Holdings
together with all accompanying evidences of transfer and authenticity to, or
upon the order of, the Trust, upon receipt by the Exchange Agent, as the
undersigned's agent, of the New Notes to be issued in exchange for such Old
Notes, (ii) present Certificates for such Old Notes for transfer, and to
transfer the Old Notes on the books of Panthers Holdings, and (iii) receive for
the account of Panthers Holdings all benefits and otherwise exercise all rights
of beneficial ownership of such Old Notes, all in accordance with the terms and
conditions of the Exchange Offer.
THE UNDERSIGNED, ______________________, HEREBY REPRESENTS AND WARRANTS
THAT THE UNDERSIGNED HAS FULL POWER AND AUTHORITY TO TENDER, EXCHANGE, SELL,
ASSIGN AND TRANSFER THE OLD NOTES TENDERED HEREBY AND THAT, WHEN THE SAME ARE
ACCEPTED FOR EXCHANGE, THE TRUST WILL ACQUIRE GOOD, MARKETABLE AND UNENCUMBERED
TITLE THERETO, FREE AND CLEAR OF ALL LIENS, RESTRICTIONS, CHARGES AND
ENCUMBRANCES, AND THAT THE OLD NOTES TENDERED HEREBY ARE NOT SUBJECT TO ANY
ADVERSE CLAIMS OR PROXIES. THE UNDERSIGNED WILL, UPON REQUEST, EXECUTE AND
DELIVER ANY ADDITIONAL DOCUMENTS DEEMED BY PANTHERS HOLDINGS OR THE EXCHANGE
AGENT TO BE NECESSARY OR DESIRABLE TO COMPLETE THE EXCHANGE, ASSIGNMENT AND
TRANSFER OF THE OLD NOTES TENDERED HEREBY, AND THE UNDERSIGNED WILL COMPLY WITH
ITS OBLIGATIONS UNDER THE REGISTRATION RIGHTS AGREEMENT. THE UNDERSIGNED HAS
READ AND AGREES TO ALL OF THE TERMS OF THE EXCHANGE OFFER.
The name(s) and address(es) of the registered holder(s) of the Old
Notes tendered hereby should be printed above, if they are not already set forth
above, as they appear on the Certificates representing such Old Notes. The
Certificate number(s) and the Old Notes that the undersigned wishes to tender
should be indicated in the appropriate boxes above.
If any tendered Old Notes are not exchanged pursuant to the Exchange
Offer for any reason, or if Certificates are submitted for more Old Notes than
are tendered or accepted for exchange, Certificates for such nonexchanged or
nontendered Old Notes will be returned (or, in the case of Old Notes tendered by
book-entry transfer, such Old
5
<PAGE> 6
Notes will be credited to an account maintained at DTC), without expense to the
tendering holder, promptly following the expiration or termination of the
Exchange Offer.
The undersigned understands that tenders of Old Notes pursuant to any
one of the procedures described in "The Exchange Offer--Procedures for Tendering
Old Notes" in the Prospectus and in the instruction, attached hereto will, upon
Panthers Holdings' acceptance for exchange of such tendered Old Notes,
constitute a binding agreement between the undersigned and Panthers Holdings
upon the terms and subject to the conditions of the Exchange Offer. The
undersigned recognizes that, under certain circumstances set forth in the
Prospectus, Panthers Holdings may not be required to accept for exchange any of
the Old Notes tendered hereby.
Unless otherwise indicated herein in the box entitled "Special Issuance
Instructions" below, the undersigned hereby directs that the New Notes be issued
in the name(s) of the undersigned or, in the case of a book-entry transfer of
Old Notes, that such New Notes be credited to the account indicated above
maintained at DTC. If applicable, substitute Certificates representing Old Notes
not exchanged or not accepted for exchange will be issued to the undersigned or,
in the case of a book-entry transfer of Old Notes, will be credited to the
account indicated above maintained at DTC. Similarly, unless otherwise indicated
under "Special Delivery Instructions," please deliver New Notes to the
undersigned at the address shown below the undersigned's signature.
BY TENDERING OLD NOTES AND EXECUTING THIS LETTER OF TRANSMITTAL, THE
UNDERSIGNED HEREBY REPRESENTS AND AGREES THAT (I) THE UNDERSIGNED IS NOT AN
"AFFILIATE" OF PANTHERS HOLDINGS, (II) ANY NEW NOTES TO BE RECEIVED BY THE
UNDERSIGNED ARE BEING ACQUIRED IN THE ORDINARY COURSE OF ITS BUSINESS, (III) THE
UNDERSIGNED HAS NO ARRANGEMENT OR UNDERSTANDING WITH ANY PERSON TO PARTICIPATE
IN A DISTRIBUTION (WITHIN THE MEANING OF THE SECURITIES ACT) OF NEW NOTES TO BE
RECEIVED IN THE EXCHANGE OFFER, AND (IV) IF THE UNDERSIGNED IS NOT A
BROKER-DEALER, THE UNDERSIGNED IS NOT ENGAGED IN, AND DOES NOT INTEND TO ENGAGE
IN, A DISTRIBUTION (WITHIN THE MEANING OF THE SECURITIES ACT) OF SUCH NEW NOTES.
BY TENDERING OLD NOTES PURSUANT TO THE EXCHANGE OFFER AND EXECUTING THIS LETTER
OF TRANSMITTAL, A HOLDER OF OLD NOTES WHICH IS A BROKER-DEALER REPRESENTS AND
AGREES, CONSISTENT WITH CERTAIN INTERPRETIVE LETTERS ISSUED BY THE STAFF OF THE
DIVISION OF CORPORATION FINANCE OF THE SECURITIES AND EXCHANGE COMMISSION TO
THIRD PARTIES, THAT (A) SUCH OLD NOTES HELD BY THE BROKER-DEALER ARE HELD ONLY
AS A NOMINEE, OR (B) SUCH OLD NOTES WERE ACQUIRED BY SUCH BROKER-DEALER FOR ITS
OWN ACCOUNT AS A RESULT OF MARKET-MAKING ACTIVITIES OR OTHER TRADING ACTIVITIES
AND IT WILL DELIVER THE PROSPECTUS (AS AMENDED OR SUPPLEMENTED FROM TIME TO
TIME) MEETING THE REQUIREMENTS OF THE SECURITIES ACT IN
6
<PAGE> 7
CONNECTION WITH ANY RESALE OF SUCH NEW NOTES (PROVIDED THAT, BY SO ACKNOWLEDGING
AND BY DELIVERING A PROSPECTUS, SUCH BROKER-DEALER WILL NOT BE DEEMED TO ADMIT
THAT IT IS AN "UNDERWRITER" WITHIN THE MEANING OF THE SECURITIES ACT).
AND THE TRUST HAVE AGREED THAT, SUBJECT TO THE PROVISIONS OF THE
REGISTRATION RIGHTS AGREEMENT, THE PROSPECTUS, AS IT MAY BE AMENDED OR
SUPPLEMENTED FROM TIME TO TIME, MAY BE USED BY A PARTICIPATING BROKER-DEALER (AS
DEFINED BELOW) IN CONNECTION WITH RESALES OF NEW NOTES RECEIVED IN EXCHANGE FOR
OLD NOTES, WHERE SUCH OLD NOTES WERE ACQUIRED BY SUCH PARTICIPATING
BROKER-DEALER FOR ITS OWN ACCOUNT AS A RESULT OF MARKET-MAKING ACTIVITIES OR
OTHER TRADING ACTIVITIES, FOR A PERIOD ENDING 90 DAYS AFTER THE EXPIRATION DATE
(SUBJECT TO EXTENSION UNDER CERTAIN LIMITED CIRCUMSTANCES DESCRIBED IN THE
PROSPECTUS) OR, IF EARLIER, WHEN ALL SUCH NEW NOTES HAVE BEEN DISPOSED OF BY
SUCH PARTICIPATING BROKER-DEALER. IN THAT REGARD, EACH BROKER-DEALER WHO
ACQUIRED OLD NOTES FOR ITS OWN ACCOUNT AS A RESULT OF MARKET-MAKING OR OTHER
TRADING ACTIVITIES (A "PARTICIPATING BROKER-DEALER"), BY TENDERING SUCH OLD
NOTES AND EXECUTING THIS LETTER OF TRANSMITTAL, AGREES THAT, UPON RECEIPT OF
NOTICE FROM PANTHERS HOLDINGS OF THE OCCURRENCE OF ANY EVENT OR THE DISCOVERY OF
ANY FACT WHICH MAKES ANY STATEMENT CONTAINED OR INCORPORATED BY REFERENCE IN THE
PROSPECTUS UNTRUE IN ANY MATERIAL RESPECT OR WHICH CAUSES THE PROSPECTUS TO OMIT
TO STATE A MATERIAL FACT NECESSARY IN ORDER TO MAKE THE STATEMENTS CONTAINED OR
INCORPORATED BY REFERENCE THEREIN, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH
THEY WERE MADE, NOT MISLEADING OR OF THE OCCURRENCE OF CERTAIN OTHER EVENTS
SPECIFIED IN THE REGISTRATION RIGHTS AGREEMENT, SUCH PARTICIPATING BROKER-DEALER
WILL SUSPEND THE SALE OF NEW NOTES PURSUANT TO THE PROSPECTUS UNTIL PANTHERS
HOLDINGS HAS AMENDED OR SUPPLEMENTED THE PROSPECTUS TO CORRECT SUCH MISSTATEMENT
OR OMISSION AND HAVE FURNISHED COPIES OF THE AMENDED OR SUPPLEMENTED PROSPECTUS
TO THE PARTICIPATING BROKER-DEALER OR PANTHERS HOLDINGS HAS GIVEN NOTICE THAT
THE SALE OF THE NEW NOTES MAY BE RESUMED, AS THE CASE MAY BE. IF PANTHERS
HOLDINGS GIVES SUCH NOTICE TO SUSPEND THE SALE OF THE NEW NOTES, THEY SHALL
EXTEND THE 90-DAY PERIOD REFERRED TO ABOVE DURING WHICH PARTICIPATING
BROKER-DEALERS ARE ENTITLED TO USE THE PROSPECTUS IN CONNECTION WITH THE RESALE
OF NEW NOTES BY THE NUMBER OF DAYS DURING THE PERIOD FROM AND INCLUDING THE DATE
OF THE GIVING OF SUCH NOTICE TO AND INCLUDING THE DATE WHEN PARTICIPATING
BROKER-DEALERS SHALL HAVE RECEIVED COPIES OF THE SUPPLEMENTED OR AMENDED
PROSPECTUS NECESSARY
7
<PAGE> 8
TO PERMIT RESALES OF THE NEW NOTES OR TO AND INCLUDING THE DATE ON WHICH
PANTHERS HOLDINGS HAS GIVEN NOTICE THAT THE SALE OF NEW NOTES MAY BE RESUMED, AS
THE CASE MAY BE.
Holders of Old Notes whose Old Notes are accepted for exchange will not
receive accrued interest on such Old Notes for any period from and after the
last Interest Payment Date to which interest has been paid or duty provided for
on such Old Notes prior to the original issue date of the New Notes or, if no
such interest has been paid or duly provided for, will not receive any accrued
interest on such Old Notes, and the undersigned waives the right to receive any
interest on such Old Notes accrued from and after such Interest Payment Date or,
if no such interest has been paid or duly provided for, from and after April 15,
1999.
The undersigned will, upon request, execute and deliver any additional
documents deemed by Panthers Holdings to be necessary or desirable to complete
the sale, assignment and transfer of the Old Notes tendered hereby. All
authority herein conferred or agreed to be conferred in this Letter of
Transmittal shall survive the death or incapacity of the undersigned and any
obligation of the undersigned hereunder shall be binding upon the heirs,
executors, administrators, personal representatives, trustees in bankruptcy,
legal representatives, successors and assigns of the undersigned. Except as
stated in the Prospectus, this tender is irrevocable.
THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED "DESCRIPTION OF OLD
NOTES" ABOVE AND SIGNING THIS LETTER, WILL BE DEEMED TO HAVE TENDERED THE OLD
NOTES AS SET FORTH IN SUCH BOX.
HOLDER(S) SIGN HERE
(SEE INSTRUCTIONS 2,5 AND 6)
(PLEASE COMPLETE SUBSTITUTE FORM W-9 ON PAGE 7)
(NOTE: SIGNATURE(S) MUST BE GUARANTEED IF REQUIRED BY INSTRUCTION 2)
Must be signed by registered holder(s) exactly as name(s) appear(s) on
Certificate(s) for the Old Notes hereby tendered or on ________________________
the register of holders maintained by Panthers Holdings, or by any person(s)
authorized to become the registered holder(s) by endorsements and documents
transmitted herewith (including such opinions of counsel, certifications and
other information as may be required by Panthers Holdings for the Old Notes to
comply with the restrictions on transfer applicable to the Old Notes). If
signature is by an attorney-in-fact, executor, administrator, trustee, guardian,
officer of a corporation or another acting in a fiduciary capacity or
representative capacity, please set forth the signer's full title. See
Instruction 5.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
8
<PAGE> 9
(SIGNATURE(S) OF HOLDER(S))
Date: , 199
------------- --
Name(s)
------------------------------------------------------------------------
(PLEASE PRINT)
Capacity (full title)
----------------------------------------------------------
Address:
-----------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone Number
-------------------------------------------------
(TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER(S))
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 2 AND 5)
- -------------------------------------------------------------------------------
(AUTHORIZED SIGNATURE)
Date: , 199
---------------------- --
Name of Firm
-------------------------------------------------------------------
Capacity (full title)
-------------------------------------------------
(PLEASE PRINT)
9
<PAGE> 10
Address
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone Number
-------------------------------------------------
10
<PAGE> 11
SPECIAL ISSUANCE INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5 AND 6)
To be completed ONLY if the New Notes or Old Notes not tendered are to be issued
in the name of someone other than the registered holder of the Old Notes whose
name(s) appear(s) above.
Issue
/ / Old Notes not tendered to:
/ / New Notes, to:
Name(s)
------------------------------------------------------------------------
Address
------------------------------------------------------------------------
-----------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and
Telephone Number
---------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(TAX IDENTIFICATION OR SOCIAL
SECURITY NUMBER(S))
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5 AND 6)
To be completed ONLY if New Notes or Old Notes not tendered are to be sent to
someone other than the registered holder of the Old Notes whose name(s)
appear(s) above, or such registered holder(s) at an address other than that
shown above.
Mail
/ / Old Notes not tendered to:
/ / New Notes, to:
Name(s)
-----------------------------------------------------------------------
Address
-----------------------------------------------------------------------
-----------------------------------------------------------------------
(INCLUDE CODE)
11
<PAGE> 12
Area Code and
Telephone Number
---------------------------------------------------------------
(TAX IDENTIFICATION OR SOCIAL
SECURITY NUMBER(S))
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES; GUARANTEED
DELIVERY PROCEDURES. This Letter of Transmittal is to be completed either if (a)
Certificates are to be forwarded herewith or (b) tenders are to be made pursuant
to the procedures for tender by book-entry transfer set forth in "The Exchange
Offer--Procedures for Tendering Old Notes" in the Prospectus. Certificates, or
timely confirmation of a book-entry transfer of such Old Notes into the Exchange
Agent's account at DTC, as well as this Letter of Transmittal (or facsimile
thereof), properly completed and duly executed, with any required signature
guarantees, and any other documents required by this Letter of Transmittal, must
be received by the Exchange Agent at its address set forth herein on or prior to
the Expiration Date. Old Notes may be tendered in whole or in part in the
principal amount of $1,000 (1 Note) and integral multiples of $1,000 in excess
thereof, provided that, if any Old Notes are tendered for exchange in part, the
untendered principal amount thereof must be $1,000 (1 Note) or any integral
multiple thereof.
Holders who wish to tender their Old Notes and (i) whose Old Notes are
not immediately available or (ii) who cannot deliver their Old Notes, this
Letter of Transmittal and all other required documents to the Exchange Agent on
or prior to the Expiration Date or (iii) who cannot complete the procedures for
delivery by book-entry transfer on a timely basis, may tender their Old Notes by
properly completing and duly executing a Notice of Guaranteed Delivery pursuant
to the guaranteed delivery procedures set forth in "The Exchange
Offer--Procedures for Tendering Old Notes" in the Prospectus. Pursuant to such
procedures: (i) such tender must be made by or through an Eligible Institution
(as defined below); (ii) a properly completed and duly executed Notice of
Guaranteed Delivery, substantially in the form made available by the Company,
must be received by the Exchange Agent on or prior to the Expiration Date; and
(iii) the Certificates (or a book-entry confirmation (as defined in the
Prospectus)) representing all tendered Old Notes, in proper form for transfer,
together with a Letter of Transmittal (or facsimile thereof), properly completed
and duly executed, with any required signature guarantees and any other
documents required by this Letter of Transmittal, must be received by the
Exchange Agent within five New York Stock Exchange, Inc. trading days after the
date of execution of such Notice of Guaranteed Delivery, all is provided in "The
Exchange Offer--Procedures for Tendering Old Notes" in the Prospectus.
The Notice of Guaranteed Delivery may be delivered by hand or
transmitted by facsimile or mail to the Exchange Agent, and must include a
guarantee by an Eligible Institution in the form set
12
<PAGE> 13
forth in such Notice. For Old Notes to be properly tendered pursuant to the
guaranteed delivery procedure, the Exchange Agent must receive a Notice of
Guaranteed Delivery on or prior to the Expiration Date. As used herein and in
the Prospectus, "Eligible Institution" means a firm or other entity identified
in Rule 17Ad-15 under the Exchange Act as "an eligible guarantor institution,"
including (as such terms are defined therein) (i) a bank; (ii) a broker, dealer,
municipal securities broker or dealer or government securities broker or dealer;
(iii) a credit union; (v) a national securities exchange, registered securities
association or clearing agency; or (v) a savings association that is a
participant in a Securities Transfer Association.
THE METHOD OF DELIVERY OF CERTIFICATES, THIS LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING
HOLDER AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
EXCHANGE AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, OR OVERNIGHT DELIVERY SERVICE IS RECOMMENDED. IN
ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
Panthers Holdings will not accept any alternative, conditional or
contingent tenders. Each tendering holder, by execution of a Letter of
Transmittal (or facsimile thereof), waives any right to receive any notice of
the acceptance of such tender.
2. GUARANTEE OF SIGNATURES. No signature guarantee on this Letter of
Transmittal is required if:
(i) this Letter of Transmittal is signed by the registered holder
(which term, for purposes of this document, shall include any
participant in DTC whose name appears on the register of
holders maintained by the Trust as the owner of the Old Notes)
of Old Notes tendered herewith, unless such holder(s) has
completed either the box entitled "Special Issuance
Instructions" or the box entitled "Special Delivery
Instructions" above, or
(ii) such Old Notes are tendered for the account of a firm that is
an Eligible Institution.
In all other cases, an Eligible Institution must guarantee the
signature(s) on this Letter of Transmittal. See Instruction 5.
3. INADEQUATE SPACE. If the space provided in the box captioned
"Description of Old Notes" is inadequate, the Certificate number(s) and/or the
principal amount of Old Notes and any other required information should be
listed on a separate signed schedule which is attached to this Letter of
Transmittal.
4. PARTIAL TENDERS AND WITHDRAWAL RIGHTS. Tenders of Old Notes will be
accepted only in the principal amount of $1,000 (1 Note) and integral multiples
thereof, provided that if any Old Notes are tendered
13
<PAGE> 14
for exchange in part, the untendered principal amount thereof must be $1,000 (1
Note) or any integral multiple thereof. If less than all the Old Notes evidenced
by any Certificate submitted are to be tendered, fill in the principal amount of
Old Notes which are to be tendered in the box entitled "Principal Amount of Old
Notes Tendered (if less than all)." In such case, new Certificate(s) for the
remainder of the Old Notes that were evidenced by your old Certificate(s) will
only be sent to the holder of the Old Notes, promptly after the Expiration Date.
All Old Notes represented by Certificates delivered to the Exchange Agent will
be deemed to have been tendered unless otherwise indicated.
Except as otherwise provided herein, tenders of Old Notes may be
withdrawn at any time on or prior to the Expiration Date. In order for a
withdrawal to be effective on or prior to that time, a written, telegraphic,
telex or facsimile transmission of such notice of withdrawal must be timely
received by the Exchange Agent at one of its addresses set forth above or in the
Prospectus on or prior to the Expiration Date. Any such notice of withdrawal
must specify the name of the person who tendered the Old Notes to be withdrawn,
the aggregate principal amount of Old Notes to be withdrawn, and (if
Certificates for Old Notes have been tendered) the name of the registered holder
of the Old Notes as set forth on the Certificate for the Old Notes, if different
from that of the person who tendered such Old Notes. If Certificates for the Old
Notes have been delivered or otherwise identified to the Exchange Agent, then
prior to the physical release of such Certificates for the Old Notes, the
tendering holder must submit the serial numbers shown on the particular
Certificates for the Old Notes to be withdrawn and the signature on the notice
of withdrawal must be guaranteed by an Eligible Institution, except in the case
of Old Notes tendered for the account of an Eligible Institution. If Old Notes
have been tendered pursuant to the procedures for book-entry transfer set forth
in the Prospectus under "The Exchange Offer--Procedures for Tendering Old
Notes," the notice of withdrawal must specify the name and number of the account
at DTC to be credited with the withdrawal of Old Notes, in which case a notice
of withdrawal will be effective if delivered to the Exchange Agent by written,
telegraphic, telex or facsimile transmission. Withdrawals of tenders of Old
Notes may not be rescinded. Old Notes properly withdrawn will not be deemed
validly tendered for purposes of the Exchange Offer, but may be retendered at
any subsequent time on or prior to the Expiration Date by following any of the
procedures described in the Prospectus under "The Exchange Offer--Procedures for
Tendering Old Notes."
All questions as to the validity, form and eligibility (including time
of receipt) of such withdrawal notices will be determined by Panthers Holdings,
in its sole discretion, whose determination shall be final and binding on all
parties. None of Panthers Holdings or any affiliates or assigns of Panthers
Holdings or the Exchange Agent or any other person shall be under any duty to
give any notification of any irregularities in any notice of withdrawal or incur
any liability for failure to give any such notification. Any Old Notes which
have been tendered but which are withdrawn will be returned to the holder
thereof without cost to such holder promptly after withdrawal.
14
<PAGE> 15
5. SIGNATURES ON LETTER OF TRANSMITTAL, ASSIGNMENTS AND
ENDORSEMENTS. If this Letter of Transmittal is signed by the registered
holder(s) of the Old Notes tendered hereby, the signature(s) must correspond
exactly with the name(s) as written on the face of the Certificate(s) without
alteration, enlargement or any change whatsoever.
If any of the Old Notes tendered hereby are owned of record by two or
more joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Old Notes are registered in different name(s) on
several Certificates, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal (or facsimiles thereof) as there are different
registrations of Certificates.
If this Letter of Transmittal or any, Certificates or bond powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing and must submit proper
evidence satisfactory to Panthers Holdings, in its sole discretion, of each such
person's authority so to act.
When this Letter of Transmittal is signed by the registered owner(s) of
the Old Notes listed and transmitted hereby, no endorsement(s) of Certificate(s)
or separate bond power(s) are required unless New Notes are to be issued in the
name of a person other than the registered holder(s). Signature(s) on such
Certificate(s) or bond power(s) must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered owner(s) of the Old Notes listed, the Certificates must be endorsed
or accompanied by appropriate bond powers, signed exactly as the name or names
of the registered owner(s) appear(s) on the Certificates, and also must be
accompanied by such opinions of counsel, certifications and other information as
Panthers Holdings may require in accordance with the restrictions on transfer
applicable to the Old Notes. Signatures on such Certificates or bond powers must
be guaranteed by an Eligible Institution.
6. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. If New Notes are to be
issued in the name of a person other than the signer of this Letter of
Transmittal, or if New Notes are to be sent to someone other than the signer of
this Letter of Transmittal or to an address other than that shown above, the
appropriate boxes on this Letter of Transmittal should be completed.
Certificates for Old Notes not exchanged will be returned by mail or, if
tendered by book-entry transfer, by crediting the account indicated above
maintained at DTC. See Instruction 4.
7. IRREGULARITIES. Panthers Holdings will determine, in its sole
discretion, all questions as to the form of documents, validity, eligibility
(including time of receipt) and acceptance for exchange of any tender of Old
Notes, which determination shall be final and binding on all parties. Panthers
Holdings reserves the absolute right to reject any and all tenders determined by
either of them not to be in proper form or the acceptance of which,
15
<PAGE> 16
or exchange for which, may, in the view of counsel to Panthers Holdings, be
unlawful. Panthers Holdings also reserves the absolute right, subject to
applicable law, to waive any of the conditions of the Exchange Offer set forth
in the Prospectus under "The Exchange Offer--Conditions of the Exchange Offer"
or any conditions or irregularity in any tender of Old Notes of any particular
holder whether or not similar conditions or irregularities are waived in the
case of other holders. Panthers Holdings' interpretation of the terms and
conditions of the exchange Offer (including this Letter of Transmittal and the
instructions hereto) will be final and binding. No tender of Old Notes will be
deemed to have been validly made until all irregularities with respect to such
tender have been cured or waived. Panthers Holdings or any affiliates or assigns
of Panthers Holdings, the Exchange Agent, or any other person shall not be under
any, duty to give notification of any irregularities in tenders or incur any
liability for failure to give such notification.
8. QUESTIONS, REQUESTS FOR ASSISTANCE AND ADDITIONAL COPIES. Questions
and requests for assistance may be directed to the Exchange Agent at its address
and telephone number set forth on the front of this Letter of Transmittal.
Additional copies of the Prospectus, the Notice of Guaranteed Delivery and the
Letter of Transmittal may be obtained from the Exchange Agent or from your
broker, dealer, commercial bank, trust company or other nominee.
9. 31% BACKUP WITHHOLDING; SUBSTITUTE FORM W-9. Under U.S. Federal
income tax law, a holder whose tendered Old Notes are accepted for exchange is
required to provide the Exchange Agent with such holder's correct taxpayer
identification number ("TIN") on Substitute Form W-9 below. If the Exchange
Agent is not provided with the correct TIN, the Internal Revenue Service (the
"IRS") may subject the holder or other payee to a $50 penalty. In addition,
payments to such holders or other payees with respect to Old Notes exchanged
pursuant to the Exchange Offer may be subject to 31 % backup withholding.
The box in Part 2 of the Substitute Form W-9 may be checked if the
tendering holder has not been issued a TIN and has applied for a TIN or intends
to apply for a TIN in the near future. If the box in Part 2 is checked, the
holder or other payee must also complete the Certificate of Awaiting Taxpayer
Identification Number below in order to avoid back-up withholding.
Notwithstanding that the box in Part 2 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Exchange Agent will
withhold 31% of all payments made prior to the time a properly certified TIN is
provided to the Exchange Agent. The Exchange Agent will retain such amounts
withheld during the 60 day period following the date of the Substitute Form W-9.
If the holder furnishes the Exchange Agent with its TIN within 60 days after the
date of the Substitute Form W-9, the amounts retained during the 60 day period
will be remitted to the holder and no further amounts shall be retained or
withheld from payments made to the holder thereafter. If, however, the holder
has not provided the Exchange Agent with its TIN within such 60 day period,
amounts withheld will be remitted to the IRS as backup withholding. In addition,
31 % of all payments made thereafter will be withheld and remitted to the IRS
until a correct TIN is provided.
The holder is required to give the Exchange Agent the TIN (e.g., social
security number or employer identification number) of the registered owner of
the Old Notes or of the last transferee appearing on the transfers attached to,
or endorsed on, the Old Notes. If the
16
<PAGE> 17
Old Notes are registered in more than one name or are not in the name of the
actual owner, consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional guidance on which
number to report.
Certain holders (including, among others, corporations, financial
institutions and certain foreign persons) may not be subject to these backup
withholding and reporting requirements. Such holders should nevertheless
complete the attached Substitute Form W-9 below, and write "exempt" on the face
thereof, to avoid possible erroneous backup withholding. A foreign person may
qualify as an exempt recipient by submitting a properly completed IRS Form W-8,
signed under penalties of perjury, attesting to that holder's exempt status.
Please consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional guidance on which
holders are exempt from backup withholding.
Backup withholding is not an additional U.S. Federal income tax.
Rather, the U.S. Federal income tax liability of a person subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained.
10. WAIVER OF CONDITIONS. The Company reserves the absolute right to
waive satisfaction of any or all conditions enumerated in the Prospectus.
11. NO CONDITIONAL TENDERS. No alternative, conditional, irregular or
contingent tenders will be accepted. All tendering holders of Old Notes, by
execution of this Letter of Transmittal, shall waive any right to receive notice
of the acceptance of their Old Notes for exchanges.
Neither the Company, the Exchange Agent nor any other person is
obligated to give notice of any defect or irregularity with respect to any
tender of Old Notes nor shall any of them incur any liability for failure to
give any such notice.
12. LOST, DESTROYED OR STOLEN CERTIFICATES. If any Certificate(s)
representing Old Notes have been lost, destroyed or stolen, the holder should
promptly notify the Exchange Agent. The holder will then be instructed as to the
steps that must be taken in order to replace the Certificate(s). This Letter of
Transmittal and related documents cannot be processed until the procedures for
replacing lost, destroyed or stolen Certificate(s) have been followed.
13. SECURITY TRANSFER TAXES. Holders who tender their Old Notes for
exchange will not be obligated to pay any transfer taxes in connection
therewith. If, however, New Notes are to be delivered to, or are to be issued in
the name of, any person other than the registered holder of the Old Notes
tendered, or if a transfer tax is imposed for any reason other than the exchange
of Old Notes in connection with the Exchange Offer, then the amount of any such
transfer tax (whether imposed on the registered holder or any other persons)
will be payable by the tendering holder. If satisfactory evidence of payment of
such taxes or exemption therefrom is not submitted with the Letter of
Transmittal, the amount of such transfer taxes will be billed directly to such
tendering holder.
17
<PAGE> 18
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE THEREOF) AND
ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE EXCHANGE AGENT
ON OR PRIOR TO THE EXPIRATION DATE.
18
<PAGE> 19
TO BE COMPLETED BY ALL TENDERING SECURITY HOLDERS
(See Instruction 9)
PAYER'S NAME: THE BANK OF NEW YORK
<TABLE>
<CAPTION>
<S> <C> <C>
PART 1-PLEASE PROVIDE YOUR TIN ON THE LINE TIN:__________________________
AT RIGHT AND CERTIFY BY SIGNING AND DATING Social Security Number or
BELOW Employer Identification Number
------------------------------------------------------------------------------------------------
PART 2 -- TIN Applied for / /
------------------------------------------------------------------------------------------------
SUBSTITUTE CERTIFICATION - UNDER THE PENALTIES OF PERJURY, I CERTIFY THAT:
------------------------------------------------------------------------------------------------
Form W-9 (1) the number shown on this form is my correct taxpayer identification number (or I am waiting
Department of the Treasury for a number to be issued to me).
Internal Revenue Service
Payor's Request for (2) I am not subject to backup withholding either because (i) I am exempt from backup
Taxpayer withholding, (ii) I have not been notified by the Internal Revenue Service ("IRS")
Identification Number that I am subject to backup withholding as a result of a failure to report all
("TIN") interest or dividends, or (iii) the IRS has notified me that I am no longer subject to
and Certification backup withholding, and
(3) any other information provided on this form is true and correct
Signature___________________________________ Date______________________, 1999
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
You must cross out item (iii) in Part (2) above if you have been notified by the
IRS that you are subject to backup withholding because of under reporting
interest or dividends on your tax return and you have not been notified by the
IRS that you are no longer subject to backup withholding.
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY IN CERTAIN CIRCUMSTANCES
RESULT IN BACKUP WITHHOLDING OF 31% OF ANY AMOUNTS PAID TO YOU PURSUANT TO THE
EXCHANGE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF
TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W--9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX
IN PART 2 OF SUBSTITUTE FORM W-9
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number has
not been issued to me, and either (1) I have mailed or delivered an application
to receive a taxpayer identification number to the appropriate Internal Revenue
Service Center or Social Security Administration Office or (2) I intend to mail
or deliver an application in the near future. I understand that if I do not
provide a taxpayer identification number by the time of payment, 31% of all
payments made to me on account of the Exchange Capital Securities shall be
retained until I provide a taxpayer identification number to the Exchange Agent
and that, if I do not provide my taxpayer identification number within 60 days,
such retained amounts shall be remitted to the Internal Revenue Service as
backup withholding, and 31% of all reportable payments made to me thereafter
will be withheld and remitted to the Internal Revenue Service until I provide a
taxpayer identification number.
Signature____________________________________ Date___________________, 1999
19
<PAGE> 1
Exhibit 99.2
FORM OF
NOTICE OF GUARANTEED DELIVERY
FOR TENDER OF
ANY AND ALL OUTSTANDING
9 7/8% SENIOR SUBORDINATED NOTES DUE 2009
(PRINCIPAL AMOUNT $1,000 PER NOTE)
OF
FLORIDA PANTHERS HOLDINGS, INC.
FULLY AND UNCONDITIONALLY GUARANTEED
BY CERTAIN SUBSIDIARY GUARANTORS
Notice of Guaranteed Delivery, or one substantially equivalent to this
form, must be used to accept the Exchange Offer (as defined below) if (i)
certificates for the 9 7/8% Senior Subordinated Notes due 2009 (the "Old Notes")
of Florida Panthers Holdings, Inc. ("Panthers Holdings") are not immediately
available, (ii) the Old Notes, the Letter of Transmittal and all other required
documents cannot be delivered to The Bank of New York (the "Exchange Agent") on
or prior to 5:00 P.M. New York City time, on the Expiration Date (as defined in
the Prospectus referred to below) or (iii) the procedures for delivery by
book-entry transfer cannot be completed on a timely basis. This Notice of
Guaranteed Delivery may be delivered by hand, overnight courier or mail, or
transmitted by facsimile transmission, to the Exchange Agent. See "The Exchange
Offer--Procedures for Tendering the Old Notes" in the Prospectus. In addition,
in order to utilize the guaranteed delivery procedure to tender Old Notes
pursuant to the Exchange Offer, a completed, signed and dated Letter of
Transmittal relating to the Old Notes (or facsimile thereof) must also be
received by the Exchange Agent prior to 5:00 P.M. New York City time, on the
Expiration Date. Capitalized terms not defined herein have the meanings assigned
to them in the Prospectus.
The Exchange Agent For The Exchange Offer Is:
The Bank Of New York
<TABLE>
<CAPTION>
BY REGISTERED OR CERTIFIED MAIL FACSIMILE TRANSMISSIONS: BY HAND OR OVERNIGHT DELIVERY
(Eligible Institutions Only)
<S> <C> <C>
The Bank of New York (212) 571 -3080 The Bank of New York
101 Barclay Street, 7E 101 Barclay Street
New York, New York 10286 CONFIRM BY TELEPHONE: Corporate Trust Services Window
Attn: Reorganization Section (212) 815-6333 Ground Level
New York, New York 10286
For Information Call: Attn: Reorganization Section
(212) 815-6333
</TABLE>
<PAGE> 2
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN
AS SET FORTH ABOVE OR TRANSMISSION OF THIS NOTICE OF GUARANTEED DELIVERY VIA
FACSIMILE TO A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID
DELIVERY.
THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE
SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE
GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH
SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE
SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.
Ladies and Gentlemen:
The undersigned hereby tenders to Florida Panthers Holdings, Inc., a
Delaware Corporation ("Panthers Holdings"), upon the terms and subject to the
conditions set forth in the Prospectus dated May __, 1999 (as the same may be
amended or supplemented from time to time, the "Prospectus"), and the related
Letter of Transmittal (which together constitute the "Exchange Offer"), receipt
of which is hereby acknowledged, the aggregate principal amount of the Old Notes
set forth below pursuant to the guaranteed delivery procedures set forth in the
Prospectus under the caption "The Exchange Offer--Procedures for Tendering Old
Notes."
Aggregate Principal Name(s) of Registered Holder(s):___________
Amount Tendered: $__________ ___________________________________________
___________________________________________
Certificate No(s)
(if available):_____________
__________________________________________
(Aggregate Principal Amount Represented by
the Old Notes Certificate(s))
$________________________________
If the Old Notes will be tendered by book-entry transfer, provide the following
information:
DTC Account Number:_____________
Date:____________________________
<PAGE> 3
- --------------------------------------------------------------------------------
All authority herein conferred or agreed to be conferred shall survive
the death or incapacity of the undersigned and every obligation of the
undersigned hereunder shall be binding upon the heirs, personal representatives,
successors and assigns of the undersigned.
- --------------------------------------------------------------------------------
PLEASE SIGN HERE
X_________________________ ____________________________
X_________________________ ____________________________
Signature(s) of Owner(s) Date
or Authorized Signatory
Area Code and Telephone Number:______________________________
Must be signed by the holder(s) of the Old Capital Securities as their
name(s) appear(s) on certificates for Old Capital Securities or on a security
position listing, or by person(s) authorized to become registered holder(s) by
endorsement and documents transmitted with this Notice of Guaranteed Delivery.
If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer or other person acting in a fiduciary or
representative capacity, such person must set forth his or her full title below.
Please print name(s) and address(es)
Name(s):
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
Capacity:
___________________________________________________________________
Address(es):
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
<PAGE> 4
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm or other entity identified in Rule 17Ad-15
under the Securities Exchange Act of 1934, as amended, as an "eligible guarantor
institution," including (as such terms are defined therein): (i) a bank; (ii) a
broker, dealer, municipal securities broker, municipal securities dealer,
government securities broker, government securities dealer; (iii) a credit
union; (iv) a national securities exchange, registered securities association or
learning agency; or (v) a savings association that is a participant in a
Securities Transfer Association recognized program (each of the foregoing being
referred to as an "Eligible Institution"), hereby guarantees to deliver to the
Exchange Agent, at one of its addresses set forth above, either the Old Notes
tendered hereby in proper form for transfer, or confirmation of the book-entry
transfer of such Old Notes to the Exchange Agent's account at The Depositary
Trust Company ("DTC"), pursuant to the procedures for book-entry transfer set
forth in the Prospectus, in either case together, with one or more properly
completed and duly executed Letter(s) of Transmittal (or facsimile thereof) and
any other required documents within five business days after the date of
execution of this Notice of Guaranteed Delivery.
The undersigned acknowledges that it must deliver the Letter(s) of
Transmittal and the Old Notes tendered hereby to the Exchange Agent within the
time period set forth above and that failure to do so could result in a
financial loss to the undersigned.
______________________________ ____________________________________
Name of Firm Authorized Signature
______________________________ ____________________________________
Address Title
______________________________ ____________________________________
Zip Code (Please Type or Print)
Area Code and Telephone No.______ Dated:______________________________
NOTE: DO NOT SEND CERTIFICATES FOR OLD NOTES WITH THIS FORM. CERTIFICATES FOR
OLD NOTES SHOULD ONLY BE SENT WITH YOUR LETTER OF TRANSMITTAL.
