DESCRIPTION OF EXCHANGE NOTES
You can find the definitions of certain terms used in this description under "Certain Definitions." In this description, the words
"we", "us", "our", the issuer", and the "Company" refer only to AMC Entertainment Holdings, Inc. and not to any of its subsidiaries.
The
Company issued (i) $595.0 million in aggregate principal amount of 5.875% Senior Subordinated Notes due 2026 (the "Original 5.875% Dollar Notes") under an indenture
dated November 8, 2016 (as amended and restated from time to time, the "2016 Notes Indenture") between itself, the guarantors party thereto and U.S. Bank National Association, as trustee (the
"Trustee"); (ii) $475.0 million in aggregate principal amount of 6.125% Senior Subordinated Notes due 2027 (the "Original 6.125% Dollar Notes") under an indenture dated March 17,
2017 (as amended and restated from time to time, the "2017 Notes Indenture" and, together with the 2016 Notes Indenture, the "Indentures" and each an "Indenture"), between itself, the guarantors party
thereto and the Trustee (the "Trustee"); and (iii) £500.0 million in aggregate principal amount of 6.375% Senior Subordinated Notes due 2024 (the "Original Sterling Notes"
and together with the Original 5.875% Dollar Notes and Original 6.125% Dollar Notes, the "Original Notes") under the 2016 Notes Indenture. References below to "the Indenture" are to the 2016 Notes
Indenture or the 2017 Notes Indenture, as applicable. The Original Notes were issued in private transactions that were not subject to the registration requirements of the Securities Act. In this
section, we refer to the New 5.875% Dollar Notes together with the Original 5.875% Dollar Notes as the "5.875% Dollar Notes, "the New 6.125% Dollar Notes together with the Original 6.125% Dollar Notes
as the "6.125% Dollar Notes" and the Original Sterling Notes together with the New Sterling Notes as the "Sterling Notes." The notes include the terms stated in each Indenture and those made part of
each Indenture by reference to the Trust Indenture Act of 1939 (the "Trust Indenture Act").
The
following description is only a summary of the material provisions of each Indenture and the Registration Rights Agreements and does not purport to be complete and is qualified in
its entirety by reference to the provisions of those agreements, including the definitions therein of certain terms used below. We urge you to read each Indenture and the Registration Rights
Agreements because those agreements, not this description, define your rights as holders of the notes. You may request copies of each Indenture and the Registration Rights Agreements at our address
set forth under the heading "Incorporation by Reference."
Exchange Notes versus Original Notes
The terms of the Exchange Notes of each series are substantially identical to the applicable series of Original Notes except that the Exchange
Notes will be registered under the Securities Act and will be free of any covenants regarding exchange registration rights.
Brief Description of the Notes and the Guarantees
The notes:
-
-
are general unsecured senior subordinated obligations of the Company;
-
-
are fully and unconditionally guaranteed, jointly and severally, on a senior subordinated basis by each of the Guarantors;
-
-
are subordinated in right of payment to all existing and future Senior Indebtedness of the Company, including Indebtedness under any Credit
Facilities; and
-
-
are
pari passu
in right of payment with any future Senior Subordinated Indebtedness of the
Company, including the Existing Notes.
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The
Guarantees:
-
-
are general unsecured senior subordinated obligations of each Guarantor;
-
-
are subordinated in right of payment to all existing and future Senior Indebtedness of each Guarantor; and
-
-
are
pari passu
in right of payment with any future Senior Subordinated Indebtedness of each
Guarantor.
Principal, Maturity and Interest
The 6.125% Dollar Notes mature on May 15, 2027. The 5.875% Dollar Notes and the Sterling Notes mature on November 15, 2024. We
will issue up to £500,000,000 of New Sterling Notes, $595,000,000 of New 5.875% Dollar Notes and $475,000,000 of New 6.125% Dollar Notes (collectively, the "Offered Notes"). Subject to
compliance with the limitations described under "Certain CovenantsLimitation on Consolidated Indebtedness," we can issue an unlimited amount of additional notes in the future
as part of the same series or as an additional series. Any additional notes that we issue in the future will be substantially identical to the Offered Notes that we are issuing now, except that notes
issued in the future will have different issuance prices, issuance dates and CUSIP numbers unless such additional notes are fungible with the existing notes for U.S. federal income tax purposes. The
U.S. dollar denominated notes will be issued in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof. The Sterling denominated notes will be issued in minimum
denominations of £100,000 and in integral multiples of £1,000 in excess thereof.
Interest
on the New 5.875% Dollar Notes accrues at a rate of 5.875% per annum and will be payable semi-annually in arrears on May 15 and November 15, commencing on
November 15, 2017. We will pay interest to those persons who were holders of record at the close of business on the May 1 or November 1 next preceding the interest payment date.
Interest
on the New 6.125% Dollar Notes accrues at a rate of 6.125% per annum and will be payable semi-annually in arrears on May 15 and November 15, commencing on
November 15, 2017. We will pay interest to those persons who were holders of record at the close of business on the May 1 or November 1 next preceding the interest payment date.
Interest
on the New Sterling Notes accrues at a rate of 6.375% per annum and will be payable semi-annually in arrears on May 15 and November 15, commencing on
November 15, 2017. We will pay interest to those persons who were holders of record at the close of business on the May 1 or November 1 next preceding the interest payment date.
Interest
on the Exchange Notes accrues from the date from which the corresponding Oridingal Note accrue interes, or, if interest has already been paid on the Exchange Notes, 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.
Paying Agent and Registrar for the Notes
The Company maintains one or more paying agents for the notes in (i) the City of London (the "Sterling Notes Paying Agent") and
(ii) the City of New York (the "Dollar Notes Paying
Agent" and, together with the Sterling Notes Paying Agent, the "Paying Agents"). The Company also undertakes, to the extent possible, to use reasonable efforts to maintain a paying agent in a member
of state of the European Union that will not be obliged to withhold or deduct tax pursuant to the European Council Directive 2003//48/EC regarding the taxation of savings income (the "Directive"). The
initial Sterling Notes Paying Agent for the Sterling Notes will be Elavon Financial Services DAC, UK Branch in
33
London
and the initial Dollar Paying Agent for the Dollar Notes will be U.S. Bank National Association, in New York.
The
Company also maintains one or more registrars (each, a "Registrar") with offices in Ireland, for so long as the notes are held in registered form. The Company also maintains a
transfer agent in Ireland. The initial Registrar and transfer agent for the Sterling Notes is Elavon Financial Services DAC in London. The initial Registrar and transfer agent for the Dollar Notes
will be U.S. Bank National Association in New York. The Registrars and the transfer agents will maintain a register reflecting ownership of notes in the form of definitive registered notes (the
"Definitive Registered Notes") outstanding from time to time, if any, and will make payments on and facilitate transfers of Definitive Registered Notes on behalf of the Company. Each transfer agent
shall perform the functions of a transfer agent.
The
Company may change any Paying Agent, Registrar or transfer agent for the notes without prior notice to the holders of the notes. The Company or any of its Subsidiaries may act as
Paying Agent or Registrar in respect of the notes. For so long as the notes are listed on the Official List of the Exchange, the Company will notify the Official List of the Exchange of any change of
Paying Agent, Registrar or transfer agent.
Subordination
The payment of all Obligations in respect of the notes and the Subsidiary Guarantees will be subordinated, as set forth in each Indenture, in
right of payment to the prior payment in full in cash or Cash Equivalents of all Senior Indebtedness of the Company and the Guarantors, as applicable.
In
the event of any:
-
-
insolvency of or bankruptcy case or proceeding relating to the Company or any Guarantor;
-
-
any receivership, liquidation, reorganization or other similar case or proceeding in connection therewith, relating to the Company, any
Guarantor or to their respective assets;
-
-
any liquidation, dissolution or other winding-up of the Company or any Guarantor, whether voluntary or involuntary; or
-
-
any assignment for the benefit of creditors or other marshalling of assets or liabilities of the Company or any Guarantor;
the
holders of Senior Indebtedness of the Company or such Guarantor, as the case may be, will first be entitled to receive payment in full in cash or Cash Equivalents of all Senior Indebtedness, or
provision shall be made for such payment in full in cash or Cash Equivalents to the satisfaction of the holders of Senior Indebtedness, before the holders of notes will be entitled to receive any
payment or distribution of any kind or character from any source (other than any payment or distribution in the form of Permitted Junior Securities) on account of all Obligations in respect of the
notes or on account of the purchase, deposit for defeasance or redemption or other acquisition of notes.
As
of December 31, 2016, on an as adjusted basis after giving effect to the 2017 Equity Offering, the 2017 private offering and the use of proceeds therefrom, we would have had
outstanding:
-
-
$2,268.1 million of Senior Indebtedness, which would have consisted of $1,346.4 million under the Credit Agreement,
$242.0 million under the Carmike Notes, a $4.2 million promissory note payable to NCM and $675.5 million of existing capital and financing lease obligations (and not including up
to $137.4 million available for borrowing as additional Senior Indebtedness under our Credit Agreement as of December 31, 2016; and
-
-
$2,587.9 million of Senior Subordinated Indebtedness, of which $764.4 million would have consisted of the Original Notes and
$1,823.5 million of our existing notes.
34
The
notes are unsecured obligations of the Company and the Subsidiary Guarantees are unsecured obligations of the Guarantors. Secured Indebtedness of the Company and the Guarantors will
be effectively senior to the notes and the Subsidiary Guarantees, respectively, to the extent of the value of the assets securing such Indebtedness. As of December 31, 2016 the Company had
$2,587.9 million of Secured Indebtedness, consisting of borrowings under the Credit Agreement, the Carmike Notes, a promissory note payable to NCM and capital and financing lease obligations.
As of December 31, 2016, Nordic had approximately $32.0 million of financing lease obligations that remain outstanding following the consummation of the Nordic Acquisition, as determined
on the basis of IFRS and converted from Swedish Krona.
No
payment (other than any payments made pursuant to the provisions described under "Defeasance and Covenant Defeasance of each Indenture" from monies or Government
Securities previously deposited with the Trustee) or distribution of any assets of the Company of any kind or character from any source, whether in cash, property or securities (other than Permitted
Junior Securities), may be made by the Company on account of any Obligation in respect of the notes or on account of the purchase, redemption, deposit for defeasance or other acquisition of notes upon
the occurrence of any default in payment (whether at stated maturity, upon scheduled installment, by acceleration or otherwise) of principal of, premium, if any, or interest in respect of any Senior
Indebtedness beyond any applicable grace periods (a "Payment Default") until such Payment Default shall have been cured or waived or have ceased to exist or such Senior Indebtedness shall have been
discharged or paid in full in cash or Cash Equivalents.
No
payment (other than any payments made pursuant to the provisions described under "Defeasance and Covenant Defeasance of each Indenture" from monies or Government
Securities previously deposited with the Trustee) or distribution of any assets of the Company of any kind or character from any source, whether in cash, property or securities (other than Permitted
Junior Securities), may be made by the Company on account of any Obligation in respect of the notes or on account of the purchase, redemption, deposit for defeasance or other acquisition of
notes for the period specified below ("Payment Blockage Period") upon the occurrence of any default with respect to any Designated Senior Indebtedness not covered by the immediately preceding
paragraph pursuant to which the maturity thereof may be accelerated (a "Non-payment Default") and receipt by the Trustee of written notice thereof from the representatives of the holders of any
Designated Senior Indebtedness.
The
Payment Blockage Period will commence upon the date of receipt by the Trustee of written notice from such representative and shall end on the earliest of:
(1) 179 days
thereafter (provided any Designated Senior Indebtedness as to which notice was given shall not theretofore have been accelerated, in which case the
provisions of the second preceding paragraph shall apply);
(2) the
date on which such Non-payment Default is cured, waived or ceases to exist;
(3) the
date on which such Designated Senior Indebtedness has been discharged or paid in full in cash or Cash Equivalents; or
(4) the
date on which such Payment Blockage Period shall have been terminated by written notice to the Trustee from the representative initiating such Payment Blockage
Period;
after
which the Company will resume making any and all required payments in respect of the notes, including any missed payments. In any event, not more than one Payment Blockage Period may be
commenced during any period of 365 consecutive days. No event of default that existed or was continuing on the date of the commencement of any Payment Blockage Period will be, or can be, made the
basis for the commencement of a subsequent Payment Blockage Period, unless such default has been cured or waived for a period of not less than 90 consecutive days.
35
In
the event that, notwithstanding the foregoing, the Trustee or any holder of the notes shall have received any payment prohibited by the foregoing, then such payment shall be paid over
to the representatives of such Designated Senior Indebtedness initiating the Payment Blockage Period, to be held in trust for distribution to the holders of Senior Indebtedness or, to the extent
amounts are not then due in respect of Senior Indebtedness, promptly returned to the Company, or otherwise as a court
of competent jurisdiction shall direct. The Trustee shall not be liable for any interest on any money received by it.
Failure
by the Company to make any required payment in respect of the notes when due or within any applicable grace period, whether or not occurring during a Payment Blockage Period,
will result in an Event of Default and, thereafter, holders will have the right to require repayment of the notes in full. See "Events of Default".
By
reason of such subordination, in the event of liquidation, receivership, reorganization or insolvency of the Company, creditors of the Company who are holders of Senior Indebtedness
may recover more, ratably, than the holders of the notes, and assets which would otherwise be available to pay obligations in respect of the notes will be available only after all Senior Indebtedness
has been paid in full in cash or Cash Equivalents, and there may not be sufficient assets remaining to pay amounts due on any or all of the notes.
The
Subsidiary Guarantee of each of the Guarantors will be subordinated to Senior Indebtedness of such Guarantor to the same extent and in the same manner as the notes are subordinated
to Senior Indebtedness of the Company. Payments under the Subsidiary Guarantee of each Guarantor will be subordinated to the prior payment in full in cash of all Indebtedness under the Credit
Agreement and all other Senior Indebtedness of such Guarantor, including Senior Indebtedness incurred after the date of each 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 Indebtedness of the Company.
All
of the Company's operations are conducted through its subsidiaries. Therefore, the Company's ability to service its Indebtedness, including the notes, is dependent upon the earnings
of its subsidiaries and their ability to distribute those earnings as dividends, loans or other payments to the Company. Certain laws restrict the ability of the Company's subsidiaries to pay
dividends and make loans and advances to the Company. If these restrictions apply to subsidiaries that are not Guarantors, then the Company would not be able to use the earnings of these subsidiaries
to make payments on the notes. In addition, the Company only has a stockholder's claim on the assets of its subsidiaries. This stockholder's claim is junior to the claims that creditors and holders of
Preferred Stock of the Company's subsidiaries have against those subsidiaries.
Not
all of our subsidiaries will Guarantee the notes. The notes are Guaranteed by each of our subsidiaries that Guarantees any of our other Indebtedness, including the Credit Agreement.
In the event of a bankruptcy, liquidation or reorganization of any of these non-guarantor subsidiaries, the non-guarantor subsidiaries will pay the holders of their debt and trade creditors before
they will be able to distribute any of their assets to us. The notes are effectively subordinated in right of payment to existing and future liabilities of our non-guarantors subsidiaries. Our
non-guarantor subsidiaries include Odeon, Carmike and Nordic. On a pro forma as adjusted basis after giving effect to the Completed Acquisitions, the 2017 Equity Offering and 2017 private offering and
the use of proceeds therefrom, our subsidiaries that are not guarantors would have accounted for approximately $1.9 billion, or 39%, of our total revenues for the year ended December 31,
2016 and approximately $3.4 billion, or 38%, of our total assets and approximately $1.0 billion, or 17%, of our total liabilities as of December 31, 2016.
See
"Risk FactorsRisks Related to Our Notes and This OfferingOur substantial debt could adversely affect our operations and your investment in the notes", and
"If our cash flows prove inadequate to service our debt and provide for our other obligations, we may be required to refinance all or a portion of our existing debt or future debt at
terms unfavorable to us".
36
Payment of Additional Amounts
All payments of principal and interest on the Sterling Notes will be made free and clear of and without withholding or deduction for or on
account of any present or future tax, assessment or other governmental charge imposed by the United States or any political subdivision or taxing authority of or in the United States (collectively,
"Taxes"), unless the withholding of such Taxes is required by law or the official interpretation or administration thereof. We will, subject to the exceptions and limitations set forth below, pay such
additional amounts as are necessary in order that the net payment of the principal of and interest on the Sterling Notes to a beneficial owner of Sterling Notes who is a Non-U.S. Person (as defined
herein), after deduction for any present or future Taxes, imposed by withholding with respect to the payment, will not be less than the amount provided in the Sterling Notes to be then due and
payable; provided, however, that the foregoing obligation to pay additional amounts shall not apply to:
(1) any
Taxes that would not have been imposed but for the existence of any present or former connection (other than a connection arising solely from the ownership of those
Sterling Notes or the receipt of payments in respect of those Sterling Notes) between that beneficial owner, or between a fiduciary, settlor, beneficiary of, member or shareholder of, or possessor of
a power over, that beneficial owner, if that beneficial owner is an estate, trust, partnership or corporation, and the United States, including that beneficial owner, or that fiduciary, settlor,
beneficiary, member, shareholder or possessor, being or having been a citizen or resident or treated as a resident of the United States or being or having been engaged in trade or business or present
in the United States or having had a permanent establishment in the United States;
(2) any
Taxes that would not have been imposed but for that beneficial owner's being or having been a "10-percent shareholder" of the borrower under the Sterling Notes
within the meaning of section 871(h)(3) of the United States Internal Revenue Code of 1986, as amended (the "Code"), or being or having been a bank receiving interest described in
section 881(c)(3)(A) of the Code;
(3) any
Taxes that would not have been imposed but for the presentation of a debt security for payment (where presentation is required) on a date more than 30 days
after the later of the date on which that payment becomes due and payable and the date on which payment is duly provided for;
(4) any
Tax imposed on foreign personal holding company income or by reason of that beneficial owner's past or present status as a passive foreign investment company, a
controlled foreign corporation, a foreign tax exempt organization or a personal holding company with respect to the United States or as a corporation that accumulates earnings to avoid U.S. federal
income tax;
(5) any
Taxes that would not have been imposed or withheld but for the failure of the holder or any person to comply with certification, identification or information
reporting requirements concerning the nationality, residence, identity or connection with the United States of the holder or beneficial owner of such Sterling Note (including, but not limited to, the
requirement to provide an applicable United States Internal Revenue Service ("IRS") Form W-8 (with any required attachments));
(6) any
Taxes that are imposed otherwise than by withholding from the payment;
(7) any
Taxes that are imposed or withheld solely by reason of a change in law, regulation, or administrative or judicial interpretation that becomes effective more than
15 days after the payment becomes due or is duly provided for, whichever occurs later;
37
(8) any
estate, inheritance, gift, sales, excise, transfer, wealth or personal property tax or a similar tax, assessment or governmental charge;
(9) any
Taxes required to be withheld by any paying agent from any payment of principal of or interest on any Sterling Note, if such payment can be made without such
withholding by any other paying agent;
(10) any
Taxes that are imposed or levied by reason of the presentation (where presentation is required in order to receive payment) of such Sterling Notes for payment on a
date more than 30 days after the date on which such payment became due and payable, except to the extent that the holder or beneficial
owner thereof would have been entitled to additional amounts had the Sterling Notes been presented for payment on any date during such 30 day period;
(11) any
withholding or deduction in respect of any tax, assessment or governmental charge where such withholding or deduction is imposed on a payment to an individual and
is required to be made pursuant to European Council Directive 2003/48/EC or any other directive implementing the conclusions of the ECOFIN Council meeting of 26-27 November 2000 or any law
implementing or complying with, or introduced in order to conform to, such directive; or
(12) any
Taxes imposed pursuant to Sections 1471 through 1474 of the Code (or any amended or successor version of such Sections), any current or future regulations or
agreements thereunder, official interpretations thereof, any agreement entered into pursuant to Section 1471(b) of the Code (or any amended or successor version), or any law, legislation, rules
or practices implementing an intergovernmental agreement relating thereto;
(13) in
the case of any combination of any items (1) through (12);
nor
will we pay any additional amounts to any beneficial owner or holder of Sterling Notes who is a fiduciary or partnership to the extent that a beneficiary or settlor with respect to that fiduciary
or a member of that partnership or a beneficial owner thereof would not have been entitled to the payment of those additional amounts had that beneficiary, settlor, member or beneficial owner been the
beneficial owner of those Sterling Notes.
As
used in the preceding paragraph, "Non-U.S. Person" means any corporation, partnership, individual or fiduciary that is, for United States federal income tax purposes, a foreign
corporation, a non-resident alien individual who has not made a valid election to be treated as a United States resident, a non-resident fiduciary of a foreign estate or trust or a foreign
partnership, one or more of the members of which is, as to the United States, a foreign corporation, a non-resident alien individual or a non-resident fiduciary of a foreign estate or trust.
The
Sterling Notes are subject in all cases to any tax, fiscal or other law or regulation or administrative or judicial interpretation applicable thereto. Except as specifically provided
under this heading "Payment of Additional Amounts," we shall not be required to make any payment with respect to any tax, assessment or governmental charge imposed by any government or a
political subdivision or taxing authority thereof or therein.
Subsidiary Guarantees
The Guarantors, jointly and severally, fully and unconditionally guarantee on a senior subordinated unsecured basis the Company's obligations
under the notes and all obligations under each Indenture. The Guarantors agree to pay, in addition to the amount stated above, any and all costs and expenses (including reasonable counsel fees and
expenses) Incurred by the Trustee or the holders of notes in enforcing any rights under the Subsidiary Guarantees. The obligations of each Guarantor under its Subsidiary Guarantee rank junior in right
of payment with all Senior Indebtedness of such Guarantor and equally in right of payment with other Senior Subordinated Indebtedness of such Guarantor.
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Table of Contents
Although each Indenture limits the amount of Indebtedness that Subsidiaries may Incur, such Indebtedness may be substantial and a significant portion of it may be
Indebtedness of Guarantors and/or may be Senior Indebtedness and/or may be secured.
Each
Indenture provides that the obligations of each Guarantor under its Subsidiary Guarantee are limited as necessary to prevent that Subsidiary Guarantee from constituting a fraudulent
conveyance or fraudulent transfer under applicable law.
In
the event a Guarantor is sold or disposed of (whether by merger, consolidation, the sale of its Capital Stock or the sale of all or substantially all of its assets (other than by
lease)) and whether or not the Guarantor is the surviving entity in such a transaction involving a Person that is not the Company or a Subsidiary of the Company, such Guarantor will be released from
its obligations under each Indenture, its Subsidiary Guarantee and the Registration Rights Agreements if:
(1) no
Default or Event of Default will have occurred or be continuing or would occur as a consequence of a release of the obligations of such Guarantor; and
(2) all
the obligations of such Guarantor under the Credit Agreement and related documentation and any other obligations of such Guarantor relating to any other Indebtedness
of the Company or its Subsidiaries terminate upon consummation of such transaction.
In
addition, a Guarantor will be released from its obligations under each Indenture, its Subsidiary Guarantee and the Registration Rights Agreements if (1) the conditions relating
to legal defeasance are satisfied in accordance with the Indenture or (2) the Company designates such Subsidiary as an Unrestricted Subsidiary and such designation complies with the other
provisions of the Indenture.
Sinking Fund
The notes are not entitled to the benefit of any sinking fund.
Optional Redemption
The 5.875% Dollar Notes will not be redeemable at the option of the Company prior to November 15, 2021 (except as provided below).
From
and after November 15, 2021, the Company may redeem all or any portion of the 5.875% Dollar Notes, at once or over time, after giving the required notice under the 2016 Notes
Indenture. The 5.875% Dollar Notes may be redeemed at the redemption prices set forth below, plus accrued and
unpaid interest, if any, to the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date). The following
prices are for the 5.875% Dollar Notes redeemed during the 12-month period commencing on November 15 of the years set forth below, and are expressed as percentages of principal amount.
|
|
|
|
|
Year
|
|
Redemption
|
|
2021
|
|
|
102.938
|
%
|
2022
|
|
|
101.958
|
%
|
2023
|
|
|
100.979
|
%
|
2024 and thereafter
|
|
|
100.0000
|
%
|
Prior
to November 15, 2019 the Company may on any one or more occasions redeem up to 35% of the original aggregate principal amount of the 5.875% Dollar Notes with the Net Cash
Proceeds of one or more Equity Offerings at a redemption price of 105.875% of the principal amount thereof, plus
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Table of Contents
accrued
and unpaid interest, if any, to the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date);
provided
that:
(1) at
least 65% of the original aggregate principal amount of the 5.875% Dollar Notes remains outstanding after each such redemption; and
(2) the
redemption occurs within 120 days after the closing of such Equity Offering.
In
addition, at any time and from time to time prior to November 15, 2021, the Company may, at its option, redeem all or a portion of the 5.875% Dollar Notes at a redemption price
equal to 100% of the principal amount thereof plus the Applicable Premium on the 5.875% Dollar Notes (as defined herein) with respect to the 5.875% Dollar Notes plus accrued and unpaid interest, if
any, thereon to the redemption date. Notice of such redemption must be sent to holders of the notes called for redemption not less than 30 nor more than 60 days prior to the redemption date.
The notice need not set forth the Applicable Premium on the 5.875% Dollar Notes but only the manner of calculation of the redemption price. The 2016 Notes Indenture provides that, with respect to any
such redemption, the Company will notify the Trustee of the Applicable Premium on the 5.875% Dollar Notes with respect to the Dollar Notes promptly after the calculation and that the Trustee will not
be responsible for such calculation.
The 6.125% Dollar Notes will not be redeemable at the option of the Company prior to May 15, 2022 (except as provided below).
From
and after May 15, 2022, the Company may redeem all or any portion of the 6.125% Dollar Notes, at once or over time, after giving the required notice under the 2017 Notes
Indenture. The 6.125% Dollar Notes may be redeemed at the redemption prices set forth below, plus accrued and unpaid interest, if any, to the redemption date (subject to the right of holders of record
on the relevant record date to receive interest due on the relevant interest payment date). The following prices are for the 6.125% Dollar Notes redeemed during the 12-month period commencing on
May 15 of the years set forth below, and are expressed as percentages of principal amount.
|
|
|
|
|
Year
|
|
Redemption
|
|
2022
|
|
|
103.063
|
%
|
2023
|
|
|
102.042
|
%
|
2024
|
|
|
101.021
|
%
|
2025 and thereafter
|
|
|
100.0000
|
%
|
Prior
to May 15, 2020 the Company may on any one or more occasions redeem up to 35% of the original aggregate principal amount of the 6.125% Dollar Notes with the Net Cash
Proceeds of one or more Equity Offerings at a redemption price of 106.125% of the principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date (subject to the right of
holders of record on the relevant record date to receive interest due on the relevant interest payment date);
provided
that:
(1) at
least 65% of the original aggregate principal amount of the 6.125% Dollar Notes remains outstanding after each such redemption; and
(2) the
redemption occurs within 120 days after the closing of such Equity Offering.
In
addition, at any time and from time to time prior to May 15, 2022, the Company may, at its option, redeem all or a portion of the 6.125% Dollar Notes at a redemption price
equal to 100% of the principal amount thereof plus the Applicable Premium on the 6.125% Dollar Notes (as defined herein) with respect to the 6.125% Dollar Notes plus accrued and unpaid interest, if
any, thereon to the redemption date. Notice of such redemption must be sent to holders of the notes called for redemption
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not
less than 30 nor more than 60 days prior to the redemption date. The notice need not set forth the Applicable Premium on the 6.125% Dollar Notes but only the manner of calculation of the
redemption price. The 2017 Notes Indenture provides that, with respect to any such redemption, the Company will notify the Trustee of the Applicable Premium on the 6.125% Dollar Notes with respect to
the 6.125% Dollar Notes promptly after the calculation and that the Trustee will not be responsible for such calculation.
The Sterling Notes will not be redeemable at the option of the Company prior to November 15, 2019 (except as provided below).
From
and after November 15, 2019 the Company may redeem all or any portion of the Sterling Notes, at once or over time, after giving the required notice under the 2016 Notes
Indenture. The Sterling Notes may be redeemed at the redemption prices set forth below, plus accrued and unpaid interest, if any, to the redemption date (subject to the right of holders of record on
the relevant record date to receive interest due on the relevant interest payment date). The following prices are for the Sterling Notes redeemed during the 12-month period commencing on
November 15 of the years set forth below, and are expressed as percentages of principal amount.
|
|
|
|
|
Year
|
|
Redemption
|
|
2019
|
|
|
104.781
|
%
|
2020
|
|
|
103.188
|
%
|
2021
|
|
|
101.594
|
%
|
2022 and thereafter
|
|
|
100.0000
|
%
|
Prior
to November 15, 2019 the Company may on any one or more occasions redeem up to 35% of the original aggregate principal amount of the Sterling Notes with the Net Cash
Proceeds of one or more Equity Offerings at a redemption price of 106.375% of the principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date (subject to the right of
holders of record on the relevant record date to receive interest due on the relevant interest payment date);
provided
that:
(1) at
least 65% of the original aggregate principal amount of the Sterling Notes remains outstanding after each such redemption; and
(2) the
redemption occurs within 120 days after the closing of such Equity Offering.
In
addition, at any time and from time to time prior to November 15, 2019, the Company may, at its option, redeem all or a portion of the Sterling Notes at a redemption price
equal to 100% of the principal amount thereof plus the Applicable Premium on the Sterling Notes (as defined herein) with respect to the Sterling Notes plus accrued and unpaid interest, if any, thereon
to the redemption date. Notice of such redemption must be sent to holders of the notes called for redemption not less than 30 nor more than 60 days prior to the redemption date. The notice need
not set forth the Applicable Premium on the Sterling Notes but only the manner of calculation of the redemption price. The 2016 Notes Indenture provides that, with respect to any such redemption, the
Company will notify the Trustee of the Applicable Premium on the Sterling Notes with respect to the Sterling Notes promptly after the calculation and that the Trustee will not be responsible for such
calculation.
Any redemption and notice of redemption may, at the Company's discretion, be subject to the satisfaction of one or more conditions precedent,
including, but not limited to, consummation of any related Equity Offering. In addition, if such redemption or notice is subject to
satisfaction of one or more conditions precedent, such notice shall state that, in the Company's discretion, the redemption
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date
may be delayed until such time as any or all such conditions shall be satisfied (or waived by the Company in its sole discretion), or such redemption may not occur and such notice may be
rescinded in the event that any or all such conditions shall not have been satisfied (or waived by the Company in its sole discretion) by the redemption date, or by the redemption date so delayed. The
Company may provide in such notice that payment of the redemption price and performance of the Company's obligations with respect to such redemption may be performed by another Person.
If
the optional redemption date is on or after an interest record date and on or before the related interest payment date, the accrued and unpaid interest will be paid to the Person in
whose name the note is registered at the close of business on such record date, and no additional interest will be payable to holders whose notes will be subject to redemption by the Company.
If
less than all of the notes are to be redeemed at any time, selection of notes for redemption will be made by the Trustee or the Registrar in accordance with the customary procedures
of the Depository, as applicable, not more than 60 days prior to the redemption date pro rata, and if the Depository prescribes no method of selection, then by lot or by any other method the
Trustee or the Registrar, as applicable, in its sole discretion deems fair and appropriate;
provided
,
however
, that notes will not be redeemed in an amount
less than the minimum authorized denomination of $2,000 and £100,000, as applicable.
Notice of redemption shall be sent to the holders electronically or by first class mail, with a copy to the Trustee or the Registrar, as applicable, to each holder of notes to the address of such
holder appearing in the security register or otherwise in accordance with the procedures of the Depository not less than 30 nor more than 60 days prior to the redemption date to each holder of
notes to be redeemed at its registered address. Notice of any redemption upon any Equity Offering may be given prior to the completion of the related Equity Offering. If any note is to be redeemed in
part only, the notice of redemption that relates to such note shall state the portion of the principal amount thereof to be redeemed. A new note in a principal amount equal to the unredeemed portion
thereof will be issued in the name of the holder thereof upon cancellation of the original note. On and after the redemption date, interest will cease to accrue on notes or portions thereof called for
redemption. The Trustee shall not be liable for selection made by it under this paragraph.
So
long as any Sterling Notes are listed on the Official List of the Exchange and admitted for trading on the Exchange and the rules of the Official List of the Exchange so require, the
Company will notify the Exchange of any such notice to the holders of the Sterling Notes in connection with such redemption and notify the Exchange of any change in the principal amount of the
Sterling Notes outstanding, as applicable.
Redemption Upon Changes in Withholding Taxes
If (a) as a result of any change in, or amendment to, the laws, treaties, regulations or rulings of the United States (or any political
subdivision or taxing authority thereof or therein having power to tax) (a "Relevant Taxing Jurisdiction"), or any change in, or amendment to, the official position regarding the application,
enforcement or interpretation of such laws, treaties, regulations or rulings (including by virtue of a holding, judgment or order by a court of competent jurisdiction or a change in published
administrative practice whether or not such action was taken or made with respect to us or any affiliate), which change or amendment is announced on or after November 8, 2016, we become or will
become obligated to pay additional amounts as described herein under the heading "Payment of Additional Amounts" or (b) any act is taken by a Relevant Taxing Jurisdiction on or
after November 8, 2016, whether or not such act is taken with respect to us or any affiliate, that results in us being required to pay such additional amounts, then we may, at our option,
redeem the Sterling Notes, as a whole but not in part, upon not less than 30 days' nor more than 60 days' published notice, at 100% of their principal amount, together with interest
accrued thereon to the date fixed for redemption; provided that we determine, in our business judgment, that the obligation to pay such additional amounts cannot be avoided by the use of reasonable
measures available to us (which does not include
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substitution
of the obligor under the Sterling Notes). No redemption pursuant to (a) or (b) above may be made unless we have received an opinion of independent counsel to the effect that
as a result of such change or amendment we will, or that an act taken by a Relevant Taxing Jurisdiction has resulted in us being required to pay the additional amounts described herein under the
heading "Payment of Additional Amounts," and we shall have delivered to the trustee a certificate, signed by a duly authorized officer, stating that based on such opinion we are entitled
to redeem the Sterling Notes pursuant to their terms.
Certain Covenants
Limitation on Consolidated Indebtedness.
The Company will not, and will not permit any of its Subsidiaries to, Incur any
Indebtedness unless after
giving effect to such event on a pro forma basis, the Company's Consolidated EBITDA Ratio for the four full fiscal quarters immediately preceding such event for which internal financial statements are
available, taken as one period, is greater than or equal to 2.00 to 1.00 (such condition not being applicable to the Incurrence of Permitted Indebtedness).
For
purposes of determining compliance with this covenant, in the event that an item of Indebtedness (or any portion thereof) meets the criteria of one or more of the categories of
Permitted Indebtedness or is entitled to be Incurred pursuant to the ratio set forth in the immediately preceding paragraph, the Company is entitled to Incur such Indebtedness in part under any
combination thereof, and the Company shall, in its sole discretion, classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness (or any portion thereof) in any manner
that complies with this covenant; provided that all Indebtedness outstanding on the Issue Date under the Credit Agreement shall be deemed to have been incurred on the Issue Date pursuant to
clause (2) of the definition of "Permitted Indebtedness" and the Company shall not be permitted to later reclassify all or any portion of such Indebtedness outstanding on the Issue Date under
the Credit Agreement.
Accrual
of interest, the accretion of accreted value, amortization of original issue discount, the payment of interest in the form of additional Indebtedness with the same terms or in
the form of common stock of the Company, the payment of dividends on Preferred Stock in the form of additional shares of Preferred Stock of the same class, the accretion of original issue discount or
liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies or increases in the value of property securing
Indebtedness described in clause (3) of the definition of "Indebtedness" will not be deemed to be an Incurrence of Indebtedness for purposes of this covenant. Guarantees of, or obligations in
respect of letters of credit relating to, Indebtedness which is otherwise included in the determination of a particular amount of Indebtedness shall not be included in the determination of such amount
of Indebtedness; provided, however, that the Incurrence of the Indebtedness represented by such guarantee or letter of credit, as the case may be, was in compliance with this covenant.
Limitation on Restricted Payments.
The Company will not, and will not permit its Subsidiaries to, directly or indirectly:
(1) declare
or pay any dividend on, or make any distribution in respect of, any shares of the Company's or any Subsidiary's Capital Stock (excluding dividends or
distributions payable in shares of the Company's Capital Stock or in options, warrants or other rights to purchase such Capital Stock, but including dividends or distributions payable in Redeemable
Capital Stock or in options, warrants or other rights to purchase Redeemable Capital Stock (other than dividends on such Redeemable Capital Stock payable in shares of such Redeemable Capital Stock))
held by any Person other than the Company or any of its Wholly Owned Subsidiaries; or
(2) purchase,
redeem or acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than any Wholly Owned Subsidiary of the Company and
except for
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investments
in Capital Stock of entities which are or become Affiliates as a result of the Company's ownership of equity interest in such entities) or any options, warrants or other rights to acquire
such Capital Stock;
(such
payments or any other actions described in (1) and (2) above are collectively referred to as "Restricted Payments") unless at the time of and after giving effect to the proposed
Restricted Payment (the amount of any such Restricted Payment, if other than cash, as determined by the Board of Directors, whose determination shall be conclusive and evidenced by a Board
Resolution):
(a) no
Default or Event of Default shall have occurred and be continuing;
(b) the
Company could incur $1.00 of additional Indebtedness (other than Permitted Indebtedness) under the provisions of "Limitation on Consolidated
Indebtedness"; and
(c) the
aggregate amount of all Restricted Payments (other than Restricted Payments permitted by clauses (4), (5), (7) and (8) of the next succeeding
paragraph) declared or made after January 1, 2014 (including the proposed Restricted Payment) does not exceed the sum of:
(i) Consolidated
EBITDA for the Restricted Payments Computation Period, minus (y) 1.70 times Consolidated Interest Expense for the Restricted Payments Computation
Period (which commenced on January 1, 2014);
plus
(ii) the
aggregate net proceeds, including the Fair Market Value of property other than cash (as determined by the Board of Directors, whose determination shall be
conclusive, except that for any property whose Fair Market Value exceeds $25.0 million such Fair Market Value shall be confirmed by an independent appraisal obtained by the Company), received
after January 1, 2014 by the Company
from a contribution to its common equity capital or the issuance or sale (other than to any of its Subsidiaries) of shares of Capital Stock of the Company (other than Redeemable Capital Stock) or
warrants, options or rights to purchase such shares of Capital Stock;
plus
(iii) the
aggregate net proceeds, including the Fair Market Value of property other than cash (as determined by the Board of Directors, whose determination shall be
conclusive, except that for any property whose Fair Market Value exceeds $25.0 million such Fair Market Value shall be confirmed by an independent appraisal obtained by the Company), received
after January 1, 2014 by the Company from debt securities that have been converted into or exchanged for Capital Stock of the Company (other than Redeemable Capital Stock) to the extent such
debt securities were originally sold for such net proceeds plus the aggregate cash received by the Company at the time of such conversion;
plus
(iv) $350.0 million.
As
of December 31, 2016, as adjusted to give effect to the 2017 private offering and the use of proceeds thereof, the Company would have been able to make approximately
$1.9 billion of restricted payments under the foregoing clause (c) and clause (8) below; provided that the Company's ability to make restricted payments may be further restricted
by the other limitations set forth in this covenant, by the covenants governing the Company's other Indebtedness or by applicable law.
Notwithstanding
the foregoing limitation, the Company or any of its Subsidiaries may:
(1) pay
dividends on its Capital Stock within sixty days of the declaration thereof if, on the declaration date, such dividends could have been paid in compliance with the
foregoing limitation;
(2) acquire,
redeem or retire Capital Stock in exchange for, or in connection with a substantially concurrent issuance of, Capital Stock of the Company (other than
Redeemable Capital Stock);
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(3) in
the case of a Subsidiary, pay dividends (or in the case of any partnership or limited liability company, any similar distribution) to the holders of its Capital Stock
on a pro rata basis;
(4) make
any purchase, repurchase, redemption, defeasance or other acquisition or retirement of Capital Stock of the Company (A) deemed to occur upon the exercise of
stock options to the extent such Capital Stock represents a portion of the exercise price of such options or (B) in connection with the terms of any restricted stock agreement awarded to any
employee, officer or director of the Company or its Subsidiaries;
(5) make
Restricted Payments in amounts equal to, without duplication:
(a) the
amounts required for any direct or indirect parent to pay franchise taxes and other fees required to maintain its legal existence;
(b) amounts
required to be paid to any direct or indirect parent pursuant to the Tax Payment Agreement;
(c) foreign,
federal, state and local income and other taxes, to the extent such taxes are attributable to the income, revenue, receipts, capital or margin of the Company
and its Subsidiaries; provided that the amount of such payments in any fiscal year does not exceed the amount that the Company and its Subsidiaries would be required to pay in respect of foreign,
federal, state and local taxes for such fiscal year were the Company and its Subsidiaries to pay such taxes separately from any parent entity;
(d) general
corporate operating and overhead costs and expenses of any parent entity to the extent such costs and expenses are directly or indirectly attributable to the
ownership or operation of the Company and its Subsidiaries, including the Company's proportionate share of the expenses relating to any parent entity being a public company; and
(e) customary
salary, bonus and other benefits payable to officers, directors and employees of any parent entity to the extent such salaries, bonuses and other benefits are
directly or indirectly attributable to the ownership or operation of the Company and its Subsidiaries, including the Company's proportionate share of such amounts relating to any parent entity being a
public company, including directors' fees;
(6) the
payment of dividends on the Company's common stock (or a Restricted Payment to any direct or indirect parent of the Company to fund the payment by such direct or
indirect parent of the Company of dividends on such entity's common stock) of up to 6% per annum of the net proceeds received by the Company from any public offering of common stock of the Company or
any direct or indirect parent of the Company, including without limitation the initial public offering of the Company's Class A common stock completed on December 23, 2013, other than
public offerings with respect to the Company's (or such direct or indirect parent's) common stock registered on Form S-4 or Form S-8;
(7) the
purchase, redemption or other acquisition or retirement for value of any Capital Stock of the Company or any parent entity held by any current or former employee,
director or consultant of the Company, any parent entity or any of the Company's Subsidiaries (or any permitted transferee of any of the foregoing) pursuant to any management equity subscription
agreement, stock option agreement, stock plan or similar agreement; provided that the aggregate price paid for all such purchased, redeemed, acquired or retired Capital Stock may not exceed
$7.5 million in any 12-month period (with unused amounts in any 12-month period after the Issue Date being carried over to succeeding 12-month periods subject to a maximum carry-over amount
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of
$15.0 million (without giving effect to the following proviso)); provided further that such amount in any calendar year may be increased by an amount not to exceed:
(a) the
cash proceeds from the sale of Capital Stock (other than Redeemable Capital Stock) of the Company and, to the extent contributed to the Company, Capital Stock of any
parent entity, in each case to current or former employees, directors or consultants of the Company, any parent entity or any of the Company's Subsidiaries that occurs after the Issue Date, to the
extent the cash proceeds from the sale of such Capital Stock have not otherwise been applied to the payment of Restricted Payments by virtue of clause (c)(ii) of the preceding paragraph; plus
(b) the
cash proceeds of key man life insurance policies received by the Company, its Subsidiaries and to the extent contributed to the Company, any parent entity or the
Company after the Issue Date; less
(c) the
amount of any Restricted Payments made in any prior calendar year pursuant to clauses (a) and (b) of this clause (7); and
(8) make
other Restricted Payments in an aggregate amount not to exceed $450.0 million.
Limitation on Liens.
The Company will not and will not permit any Guarantor to create, incur, assume or otherwise cause or
suffer to exist or become
effective any Lien (other than Permitted Liens) of any
kind securing Indebtedness ranking pari passu in right of payment with or subordinated in right of payment to the notes or such Guarantor's Guarantee, as the case may be, upon any of their property or
assets (including Capital Stock of Subsidiaries of the Company), now owned or hereafter acquired, unless contemporaneously with the incurrence of such Lien effective provision is made to secure the
Obligations due under the Indenture and the notes or, in respect any Lien on any Guarantor's property or assets, any Guarantee of such Guarantor, (1) in the case of Liens securing Indebtedness
that is pari passu in right of payment with the notes or any Subsidiary Guarantee, on an equal and ratable basis with (or, if the Company so elects, on a senior basis to) the obligations so secured
until such time as such obligations are no longer secured by a Lien and (2) in the case of Liens securing Indebtedness that is expressly subordinated in right of payment to the notes or any
Guarantee, on a senior basis to the obligations so secured with the same relative priority as the notes or such Guarantee, as the case may be, will have to that subordinated Indebtedness until such
time as such obligations are no longer secured by a Lien. The foregoing restriction shall not apply to Liens securing Senior Indebtedness of the Company or any Guarantor.
Any
Lien created for the benefit of holders of the notes pursuant to this covenant shall be deemed automatically and unconditionally released and discharged upon the release and
discharge of each of the Liens described in clauses (1) and (2) in the preceding paragraph.
Limitation on Transactions with Affiliates.
The Company shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly enter into
or suffer to exist any transaction or series of related transactions (including, without limitation, the sale, purchase, exchange or lease of assets, property or services) with any Affiliate of the
Company (other than a Wholly Owned Subsidiary of the Company) involving aggregate consideration in excess of $25.0 million, unless:
(1) such
transaction or series of transactions is on terms that are no less favorable to the Company or such Subsidiary, as the case may be, than would be available at the
time of such transaction or series of transactions in a comparable transaction in an arm's-length dealing with an unaffiliated third party;
(2) such
transaction or series of transactions is in the best interests of the Company; and
(3) with
respect to a transaction or series of transactions involving aggregate payments equal to or greater than $75.0 million, a majority of disinterested members
of the Board of Directors
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determines
that such transaction or series of transactions complies with clauses (1) and (2) above, as evidenced by a Board Resolution.
Notwithstanding
the foregoing limitation, the Company and its Subsidiaries may enter into or suffer to exist the following:
(1) any
transaction pursuant to any contract in existence on the Issue Date;
(2) any
Restricted Payment permitted to be made pursuant to the provisions of "Limitation on Restricted Payments" above;
(3) any
transaction or series of transactions between the Company and one or more of its Subsidiaries or between two or more of its Subsidiaries (provided that no more than
5% of the equity interest in any such Subsidiary is owned, directly or indirectly (other than by direct or indirect ownership of an equity interest in the Company), by any Affiliate of the Company
other than a Subsidiary);
(4) the
payment of compensation (including amounts paid pursuant to employee benefit plans) for the personal services of officers, directors and employees of the Company or
any of its Subsidiaries; and
(5) the
existence of, or the performance by the Company or any of its Subsidiaries of its obligations under the terms of, any agreements that are described in the Company's
Annual Report on Form 10-K for the year ended December 31, 2016, with respect to the 6.125% Dollar Notes, and the Company's Annual Report on Form 10-K for the year ended
December 31, 2015, with respect to the Sterling Notes and the 5.875% Dollar Notes, and any amendments thereto;
provided
,
however
, that the existence
of, or the performance by the Company or any of its Subsidiaries of its obligations under, any future amendment to such
agreements shall only be permitted by this clause (5) to the extent that the terms of any such amendment, taken as a whole, are not more disadvantageous to the holders of the notes in any
material respect than the terms of such agreements in effect on the Issue Date.
Limitation on Senior Subordinated Indebtedness.
The Company will not Incur any Indebtedness that is subordinate or junior in
right of payment to any
Senior Indebtedness and senior in right of payment to the notes. No Guarantor will Incur any Indebtedness that is subordinate or junior in right of payment to any Senior Indebtedness of such Guarantor
and senior in right of payment to such Guarantor's Subsidiary Guarantee.
Future Guarantors.
After the Issue Date, the Company will cause each Subsidiary which guarantees obligations under the Credit
Agreement, the Existing
Notes or any other Indebtedness of the Company or any Guarantor to execute and deliver to the Trustee a supplemental indenture, within 30 days of the date of such Subsidiary's guarantee of such
other Indebtedness, pursuant to which such Guarantor will unconditionally Guarantee, on a joint and several basis, the full and prompt payment of the principal of, premium, if any, interest and
Special Interest, if any, on the notes on a senior subordinated basis. Each Subsidiary Guarantee will be limited to an amount not to exceed the maximum amount that can be guaranteed by that Subsidiary
without rendering the Subsidiary Guarantee as it relates to such Subsidiary, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights
of creditors generally. Notwithstanding the foregoing, if a Guarantor is released and discharged in full from its obligations under its Guarantees of (1) the Credit Agreement and related
documentation and (2) all other Indebtedness of the Company and its Subsidiaries, then the Subsidiary Guarantee of such Guarantor shall be automatically and unconditionally released and
discharged.
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SEC Reports
The Company shall file with the SEC and provide the Trustee and holders of notes with such annual reports and such information, documents and
other reports as are specified in Sections 13 and 15(d) of the Exchange Act and applicable to a U.S. corporation subject to such Sections, such information, documents and reports to be so filed
and provided at the times specified for the filing of such information, documents and reports under such Sections;
provided
,
however
, that the Company
shall not be so obligated to file such information, documents and reports with the SEC if the SEC does not permit such filings
but shall still be obligated to provide such information, documents and reports to the Trustee and the holders of the notes. The Company shall also provide copies of all annual reports and
information, documents and other reports, if and for so long as the Sterling Notes are listed on the Official List of the Exchange, at the offices of the Company.
Payments for Consent
The Company will not, and will not permit any of its Subsidiaries to, directly or indirectly, pay or cause to be paid any consideration, whether
by way of interest, fee or otherwise, to any holder of any 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 that
consideration is offered to be paid or 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 the consent,
waiver or agreement. Notwithstanding the foregoing, any payment of consideration for, or as an inducement to, any consent, waiver or amendment of any of the terms or provisions of the Indenture, the
notes or any Guarantees in connection with an exchange offer, the Company and any of our Subsidiaries may exclude (i) holders or beneficial owners of the notes that are not "qualified
institutional buyers" as defined in Rule 144A under the Securities Act, "non-U.S. Persons" as defined in Regulation S under the Securities Act, or institutional "accredited investors" as
defined in subparagraphs (a)(1), (2), (3) or (7) of Rule 501 under the Securities Act and (ii) holders or beneficial owners of the notes in any jurisdiction (other
than the United States) where the inclusion of such holders or beneficial owners would require the Company or any such Subsidiary to comply with the registration requirements or other similar
requirements under any securities laws of such jurisdiction, or the solicitation of such consent, waiver or amendment from, or the granting of such consent or waiver, or the approval of such amendment
by, holders or beneficial owners in such jurisdiction would be unlawful, in each case as determined by the Company in its sole discretion.
Merger and Sale of Substantially All Assets
The Company will not, in a single transaction or through a series of related transactions, consolidate with or merge with or into any other
Person (other than any Wholly Owned Subsidiary) or sell, assign, transfer, lease or otherwise dispose of all or substantially all of its properties and assets to any Person (other than any Wholly
Owned Subsidiary) or group of affiliated Persons unless at the time and after giving effect thereto:
(1) either:
(a) the
Company will be the continuing corporation; or
(b) the
Person (if other than the Company) formed by such consolidation or into which the Company is merged or the Person which acquires by conveyance, transfer, lease or
disposition the properties and assets of the Company substantially as an entirety (the "Surviving Entity") will be a corporation duly
organized and validly existing under the laws of the United States of America, any state thereof or the District of Columbia and shall, in either case, expressly assume all the Obligations of the
Company under the notes and the Indenture;
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(2) immediately
after giving effect to such transaction on a pro forma basis, no Default or Event of Default shall have occurred and be continuing;
(3) immediately
after giving effect to such transaction and any related financing transactions as if the same had occurred at the beginning of the applicable four-quarter
period, except in the case of the consolidation or merger of any Subsidiary with or into the Company, the Company (or the Surviving Entity if the Company is not the continuing corporation) will
(a) be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Consolidated EBITDA Ratio set forth in the first paragraph of the covenant described above under the caption
"Limitation on Consolidated Indebtedness" or (b) have a Consolidated EBITDA Ratio equal to or greater than the Consolidated EBITDA Ratio immediately prior to such transaction;
(4) each
Guarantor (unless it is the other party to the transactions above, in which case clause (1)(b) shall apply) shall have by supplemental indenture confirmed
that its Subsidiary Guarantee shall apply to such Person's obligations in respect of the outstanding notes and the Indenture and its obligations under the Registration Rights Agreement shall continue
to be in effect.
In
connection with any consolidation, merger, transfer or lease contemplated hereby, the Company shall deliver, or cause to be delivered, to the Trustee, in the form and substance
reasonably satisfactory to the Trustee, an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger, transfer or lease and the supplemental indenture in respect
thereto comply with the provisions described in the Indenture and that all conditions precedent in the Indenture provided for or relating to such transaction have been complied with.
Upon
any consolidation or merger or any transfer of all or substantially all of the assets of the Company in accordance with the foregoing, the successor corporation formed by such a
consolidation or into which the Company is merged or to which such transfer is made shall succeed to, shall be substituted for and may exercise every right and power of the Company under the notes and
each Indenture, with the same effect as if such successor corporation had been named as the Company therein. In the event of any transaction (other than a lease) described and listed in the
immediately preceding paragraphs in which the Company is not the continuing corporation, the successor Person formed or remaining shall succeed to, be substituted for and may exercise every right and
power of the
Company, and the Company shall be discharged from all obligations and covenants under the notes and each Indenture.
Change of Control
Upon the occurrence of a Change of Control, unless the Company has previously or concurrently delivered a redemption notice (that may only be
conditional upon the occurrence of such Change of Control) with respect to all the outstanding notes as described under "Optional Redemption," the Company will be required to make an
offer (a "Change of Control Offer") to purchase all outstanding notes (as described in each Indenture) at a purchase price (the "Change of Control Purchase Price") equal to 101% of their principal
amount plus accrued and unpaid interest, if any, to the date of purchase (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment
date).
Within
30 days following the date upon which the Change of Control occurred, the Company must send, electronically or by first class mail to the address of such holder appearing
in the security register or otherwise in accordance with the procedures of the Depository, a notice to each holder of notes, with a copy to the Trustee, which notice shall govern the terms of the
Change of Control Offer. Such notice will state, among other things, the purchase date, which must be no earlier than 30 days nor later than 60 days from the date such notice is mailed,
other than as may be required by law (the
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"Change
of Control Payment Date"). The Change of Control Offer is required to remain open for at least 20 Business Days and until the close of business on the Change of Control Payment Date.
The
Company will not be required to make a Change of Control Offer following a Change of Control if (i) a third party makes the Change of Control Offer in the manner, at the times
and otherwise in compliance with the requirements set forth in the Indentures applicable to a Change of Control Offer made by the Company and purchases all notes validly tendered and not withdrawn
under such Change of Control Offer, (ii) a notice of redemption to the holders of the notes has been given pursuant to the Indentures as described under "Optional Redemption" or
(iii) in the event that upon the consummation of such Change of Control, the Company defeases or discharges the notes as provided for under "Defeasance" or
"Satisfaction and Discharge," as applicable. Notwithstanding anything to the contrary herein, a Change of Control Offer may be made in advance of a Change of Control, conditional upon
such Change of Control, if a definitive agreement is in place for the Change of Control at the time of making of the Change of Control Offer.
The
Change of Control provision of the notes may in certain circumstances make it more difficult or discourage a takeover of the Company and, as a result, may make removal of incumbent
management more difficult. The Change of Control provision, however, is not the result of the Company's knowledge of any specific effort to accumulate the Company's stock or to obtain control of the
Company by means of a merger, tender offer, solicitation or otherwise, or part of a plan by management to adopt a series of anti-takeover provisions. Instead, the Change of Control provision is a
result of negotiations between the Company and the initial purchasers. The Company is not presently in discussions or negotiations with respect to any pending offers which, if accepted, would result
in a transaction involving a Change of Control, although it is possible that the Company would decide to do so in the future.
The
Credit Agreement provides and the Company expects that future credit agreements or other agreements to which the Company becomes a party may provide, that certain change of control
events with respect to the Company would constitute a default thereunder (including a Change of Control under each Indenture). In such circumstances, the subordination provisions in each Indenture
could restrict payments to the holders of the notes. Moreover, the exercise by holders of notes of their right to require the Company to repurchase such notes could cause a default under existing or
future debt of the Company, even if the Change of Control itself does not, due to the financial effect of such repurchase on the Company. Finally, the Company's ability to pay cash to the holders of
the notes in connection with a Change of Control may be limited to the Company's then existing financial resources. There can be no assurance that sufficient funds will be available when necessary to
make any required purchases. The Company's failure to purchase notes in connection with a Change of Control would result in a default under each Indenture. Such a default would, in turn, constitute a
default under existing debt of the Company, and may constitute a default under future debt as well. See "Risk FactorsWe must offer to repurchase the notes upon a change of control, which
could also result in an event of default under our Senior Secured Credit Facility". The Company's obligation to make an offer to repurchase the notes as a result of a Change of Control may be waived
or modified at any time prior to the occurrence of such Change of Control with the written consent of the holders of a majority in principal amount of the notes. See "Modification and
Waiver."
The
provisions of each Indenture would not necessarily afford holders of the notes protection in the event of a highly leveraged transaction, reorganization, restructuring, merger or
similar transaction involving the Company that may adversely affect the holders.
If
an offer is made to repurchase the notes pursuant to a Change of Control Offer, the Company will comply with all tender offer rules under state and federal securities laws, including,
but not limited to, Section 14(e) under the Exchange Act and Rule 14e-1 thereunder, to the extent applicable to such offer.
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If and for so long as the Sterling Notes are listed on the Official List of the Exchange and if and to the extent that the rules of the Exchange so require, the
Company will notify the Exchange of any Change of Control Offer.
Additional Information
Anyone who receives this prospectus may obtain a copy of each Indenture and the Registration Rights Agreements without charge by writing to AMC
Entertainment Holdings, Inc., Attention: Mr. Kevin M. Connor, Senior Vice President, General Counsel and Secretary, One AMC Way, 11500 Ash Street, Leawood, Kansas 66211
(telephone: (913) 213-2000). So long as the notes are listed on the Official List of the Exchange and if and to the extent the rules of the Exchange so require, copies of all of the Company's
present and future annual audited consolidated financial statements and this offering circular may be obtained, free of charge, during normal business hours at the offices of the Company.
Certain Definitions
Set forth below are certain defined terms used in each Indenture, as applicable. Reference is made to each Indenture for the definition of any
other capitalized term used in this section for which no definition is provided.
"
2016 Registration Rights Agreement
" means the registration rights agreement dated November 8, 2016, among the Company, the
Guarantors, and the initial purchasers regarding the Original Sterling Notes issued in 2016 and the 5.875% Dollar Notes, and any similar registration rights agreement executed in connection with an
offering of any additional notes.
"
2017 Registration Rights Agreement
" means the registration rights agreement entered into on the Issue Date, among the Company, the
Guarantors, and the initial purchasers regarding the 6.125% Dollar Notes and the Additional Sterling Notes, and any similar registration rights agreement executed in connection with an offering of any
additional notes.
"
Acquired Indebtedness
" of any particular Person means Indebtedness of any other Person existing at the time such other Person merged or
consolidated with or into or became a Subsidiary of such particular Person or assumed by such particular Person in connection with the acquisition of assets from any other Person, and not incurred by
such other Person in connection with, or in contemplation of, such other Person merging with or into such particular Person or becoming a Subsidiary of such particular Person or such acquisition.
"
Additional Sterling Notes
" means the £250.0 million in aggregate principal amount of 6.375% Senior Subordinated Notes
due 2024 issued pursuant to the Sterling Notes Indenture, as amended or supplemented from time to time.
"
Affiliate
" means, with respect to any specified Person:
(1) any
other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person; or
(2) any
other Person that owns, directly or indirectly, 10% or more of such Person's Capital Stock or any officer or director of any such Person or other Person or with
respect to any natural Person, any person having a relationship with such Person by blood, marriage or adoption not more remote than first cousin.
For
the purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing.
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"
Adjusted Gilt Rate
" means, with respect to any redemption date, (i) the yield to maturity as of such redemption date of UK
Government Obligations with a fixed maturity (as compiled by the Office for National Statistics and published in the most recent Financial Statistics that has become publicly available on a day no
earlier than two Business Days prior to the date of the delivery of the redemption notice in respect of such redemption date (or, if such Financial Statistics are no longer published, any publicly
available source of similar market data selected by the Company in good faith)) most nearly equal to the period from such redemption date to November 15, 2019; or (ii) if the period from
such redemption date to November 15, 2019 is not equal to the fixed maturity of UK Government Obligations for which a yield is given, the Gilt Rate shall be obtained by linear interpolation
(calculated to the nearest one-twelfth of a year) from the yields of UK Government Obligations for which such yields are given, except that if the period from such redemption date to
November 15, 2019 is less than one year, the weekly average yield on actually traded UK Government Obligations denominated in sterling adjusted to a fixed maturity of one year shall be used,
plus, in the case of each of clauses (i) and (ii), 0.50%.
"
Adjusted Treasury Rate
" means, with respect to any redemption date, (i) the yield, under the heading which represents the average
for the immediately preceding week, appearing in the most recently published statistical release designated "H.15(519)" or any successor publication which is published weekly by the Board of Governors
of the Federal Reserve System and which establishes yields on actively traded United States Treasury securities adjusted to constant maturity under the caption "Treasury Constant Maturities" for the
maturity corresponding to the Comparable Treasury Issue with respect to the Dollar Notes called for redemption (if no maturity is within three months before or after May 15, 2022, with respect
to the New 6.125% Dollar Notes, or November 15, 2021, with respect to the New 5.875% Dollar Notes, yields for the two published maturities most closely corresponding to the Comparable Treasury
Issue shall be determined and the Adjusted Treasury Rate shall be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month) or (ii) if such release
(or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per year equal to the semi-annual equivalent yield to maturity of
the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date, in each case calculated on the third business day
immediately preceding the redemption date, plus, in the case of each of clause (i) and (ii), 0.50%.
"
Applicable Premium on the Dollar Notes
" means, at any redemption date, the excess of (A) the present value at such redemption date
of (1) the redemption price of the Dollar Notes on May 15, 2022, with respect to the 6.125% Dollar Notes, or November 15, 2021, with respect to the 5.875% Dollar Notes (such
redemption price being described above in the second paragraph of the section described above under the caption "Optional Redemption of the Dollar Notes" section) plus (2) all
required remaining scheduled interest payments due on the Dollar Notes through May 15, 2022, with respect to the 6.125% Dollar Notes, or November 15, 2021, with respect to the 5.875%
Dollar Notes (excluding accrued and unpaid interest), computed using a discount rate equal to the Adjusted Treasury Rate, over (B) the principal amount of the Dollar Notes on such redemption
date.
"
Applicable Premium on the Sterling Notes
" means, at any redemption date, the excess of (A) the present value at such redemption
date of (1) the redemption price of the Sterling Notes on November 15, 2019 (such redemption price being described above in the second paragraph of the section described above under the
caption "Optional Redemption of the Sterling Notes" section) plus (2) all required remaining scheduled interest payments due on the Sterling Notes through November 15, 2019
(excluding accrued and unpaid interest), computed using a discount rate equal to the Adjusted Gilt Rate, over (B) the principal amount of the Sterling Notes on such redemption date.
"
Board of Directors
" means the Board of Directors of the Company or any committee of such Board of Directors duly authorized to act under
the Indenture.
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"
Board Resolution
" means a copy of a resolution, certified by the Secretary of the Company to have been duly adopted by the Board of
Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee.
"
Business Day
" means any day other than a Saturday or Sunday or other day on which banks in New York, New York, Leawood, Kansas, London,
England (with respect to the Sterling Notes) or the city in which the Trustee's office is located are authorized or required to be closed, or, if no note is outstanding, the city in which the
principal corporate trust office of the Trustee is located.
"
Capital Lease Obligations
" of any Person means any obligations of such Person and its Subsidiaries on a consolidated basis under any
capital lease or financing lease of real or personal property which, in accordance with GAAP, has been recorded as a capitalized lease obligation (together with Indebtedness in the form of operating
leases entered into by the Company or its Subsidiaries after May 21, 1998 and
required to be reflected on a consolidated balance sheet pursuant to EITF 97-10 or any subsequent pronouncement having similar effect).
"
Capital Stock
" of any Person means any and all shares, interests, participations or other equivalents (however designated) of such
Person's capital stock, including preferred stock, any rights (other than debt securities convertible into capital stock), warrants or options to acquire such capital stock, whether now outstanding or
issued after the date of the Indenture.
"
Carmike Notes
" means the $230,000,000 of 6.00% Senior Secured Notes due 2023 issued by Carmike Cinemas, Inc.
"
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;
(3) certificates
of deposit and eurodollar time deposits with maturities of six months or less from the date of acquisition, bankers' acceptances with maturities not
exceeding six months and overnight bank deposits, in each case with any United States domestic commercial bank having capital and surplus in excess of $500.0 million and a Keefe Bank Watch
Rating of "B" or better;
(4) repurchase
obligations with a term of not more than seven days for underlying securities of the types described in clauses (2) and (3) entered into with
any financial institution meeting the qualifications specified in clause (3) above;
(5) commercial
paper having one of the two highest rating categories obtainable from Moody's or S&P in each case maturing within six months after the date of acquisition;
(6) readily
marketable direct obligations issued by any State of the United States of America or any political subdivision thereof having one of the two highest rating
categories obtainable from Moody's or S&P; and
(7) investments
in money market funds which invest at least 95% of their assets in securities of the types described in clauses (1) through (6) of this
definition.
"
Change of Control
" means the occurrence of, after the date of the Indenture, any of the following events:
(1) any
"person" or "group" as such terms are used in Section 13(d) and 14(d) of the Exchange Act other than one or more Permitted Holders is or becomes the
"beneficial owner"(as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that such person or group shall be deemed to have "beneficial ownership" of all shares that any such person
or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time),
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directly
or indirectly, by way of merger, consolidation or other business combination or purchase of 50% or more of the total voting power of the Voting Stock of the Company;
(2) the
adoption of a plan relating to the liquidation or dissolution of the Company;
(3) the
sale, lease, transfer or other conveyance, in one or a series of related transactions, of all or substantially all of the assets of the Company and its Subsidiaries,
taken as a whole, to any Person other than one or more Permitted Holders; or
(4) a
change of control under any of the indentures relating to the Existing Notes (to the extent obligations under such Existing Notes are outstanding at such time) unless
waived by the requisite holders of such Existing Notes.
"
Comparable Treasury Issue
" means the United States Treasury security selected by the Quotation Agent as having a maturity comparable to
the remaining term from the redemption date to May 15, 2022, with respect to the 6.125% Dollar Notes, or November 15, 2021, with respect to the 5.875% Dollar Notes, that would be
utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of a maturity most nearly equal to
May 15, 2022, with respect to the 6.125% Dollar Notes, or November 15, 2021, with respect to the 5.875% Dollar Notes.
"
Comparable Treasury Price
" means, with respect to any redemption date, if clause (ii) of the Adjusted Treasury Rate is applicable,
the average of three, or such lesser number as is obtained by the Company, Reference Treasury Dealer Quotations for the redemption date.
"
Consolidated EBITDA
" means, with respect to any Person for any period, the Consolidated Net Income (Loss) of such Person for such period
increased (to the extent deducted in determining Consolidated Net Income (Loss)) by the sum of:
(1) all
income taxes of such Person and its Subsidiaries paid or accrued in accordance with GAAP for such period (other than income taxes attributable to extraordinary,
unusual or non-recurring gains or losses);
(2) Consolidated
Interest Expense of such Person and its Subsidiaries for such period;
(3) depreciation
expense of such Person and its Subsidiaries for such period;
(4) amortization
expense of such Person and its Subsidiaries for such period including amortization of capitalized debt issuance costs;
(5) any
other non-cash charges of such Person and its Subsidiaries for such period (including non-cash expenses recognized in accordance with Financial Accounting Standard
Number 106), all determined on a consolidated basis in accordance with GAAP; and
(6) any
fees, expenses, charges or premiums relating to any issuance of Capital Stock or issuance, repayment, refinancing, amendment or modification of Indebtedness (in each
case, whether or not successful), including, without limitation any fees, expenses or charges related to the offering of the notes;
provided
,
however
, that corporate overhead expenses payable by a parent entity described in
clause 5(d) of the second paragraph of the covenant described under "Certain CovenantsLimitation on Restricted Payments", the funds of which are provided by the Company and/or its
Subsidiaries shall be deducted in calculating the Consolidated EBITDA of the Company.
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For
purposes of this definition, all transactions involving the acquisition of any Person or motion picture theatre by another Person shall be accounted for on a "pooling of interests"
basis and not as a purchase;
provided
,
further
, that, solely with respect to calculations of the
Consolidated EBITDA Ratio:
(1) Consolidated
EBITDA shall include the effects of incremental contributions the Company reasonably believes in good faith could have been achieved during the relevant
period as a result of a Theatre Completion had such Theatre Completion occurred as of the beginning of the relevant period; provided, however, that such incremental contributions were identified and
quantified in good faith in an Officers' Certificate delivered to the Trustee at the time of any calculation of the Consolidated EBITDA Ratio;
(2) Consolidated
EBITDA shall be calculated on a pro forma basis after giving effect to any motion picture theatre or screen that was permanently or indefinitely closed for
business at any time on or subsequent to the first day of such period as if such theatre or screen was closed for the entire period; and
(3) All
preopening expense and theatre closure expense which reduced/(increased) Consolidated Net Income (Loss) during any applicable period shall be added to Consolidated
EBITDA.
"
Consolidated EBITDA Ratio
" of any Person means, for any period, the ratio of Consolidated EBITDA to Consolidated Interest Expense for
such period (other than any non-cash Consolidated Interest Expense attributable to any amortization or write-off of deferred financing costs); provided that, in making such computation:
(1) if
the Company or any Subsidiary:
(a) has
Incurred any Indebtedness since the beginning of such period that remains outstanding on such date of determination or if the transaction giving rise to the need to
calculate the Consolidated EBITDA Ratio is an Incurrence of Indebtedness, Indebtedness at the end of such period, Consolidated EBITDA and Consolidated Interest Expense for such period will be
calculated after giving effect on a pro forma basis to such Indebtedness as if such Indebtedness had been Incurred on the first day of such period (except that in making such computation, the amount
of Indebtedness under any revolving credit facility outstanding on the date of such calculation will be deemed to be:
(i) the
average daily balance of such Indebtedness during such four fiscal quarters or such shorter period for which such facility was outstanding; or
(ii) if
such facility was created after the end of such four fiscal quarters, the average daily balance of such Indebtedness during the period from the date of creation of
such facility to the date of such calculation);
and
the discharge of any other Indebtedness repaid, repurchased, defeased or otherwise discharged with the proceeds of such new Indebtedness as if such discharge had occurred on the first day of such
period; or
(b) has
repaid, repurchased, defeased or otherwise discharged any Indebtedness since the beginning of the period that is no longer outstanding on such date of determination
or if the transaction giving rise to the need to calculate the Consolidated EBITDA Ratio involves a discharge of Indebtedness (in each case other than Indebtedness Incurred under any revolving credit
facility unless such Indebtedness has been permanently repaid and the related commitment terminated), Indebtedness, Consolidated EBITDA and Consolidated Interest Expense for such period will be
calculated after giving effect on a pro forma basis to such discharge of such Indebtedness, including with the proceeds of such new Indebtedness, as if such discharge had occurred on the first day of
such period;
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(2) The
Consolidated Interest Expense attributable to interest on any Indebtedness computed on a pro forma basis and bearing a floating interest rate shall be computed as if
the rate in effect on the date of computation had been the applicable rate for the entire period; and
(3) with
respect to any Indebtedness which bears, at the option of such Person, a fixed or floating rate of interest, such Person shall apply, at its option, either the
fixed or floating rate.
"
Consolidated Interest Expense
" of any Person means, without duplication, for any period, as applied to any Person:
(1) the
sum of:
(a) the
aggregate of the interest expense on Indebtedness of such Person and its consolidated Subsidiaries for such period, on a consolidated basis, including, without
limitation:
(i) amortization
of debt discount;
(ii) the
net cost under Interest Rate Protection Agreements (including amortization of discounts);
(iii) the
interest portion of any deferred payment obligation; and
(iv) accrued
interest; plus
(b) the
interest component of the Capital Lease Obligations paid, accrued and/or scheduled to be paid or accrued by such Person and its consolidated Subsidiaries during such
period, minus
(2) the
cash interest income (exclusive of deferred financing fees) of such Person and its consolidated Subsidiaries during such period, in each case as determined in
accordance with GAAP consistently applied.
"
Consolidated Net Income (Loss)
" of any Person means, for any period, the consolidated net income (loss) of such Person and its
consolidated Subsidiaries for such period as determined in accordance with GAAP, adjusted, to the extent included in calculating such net income (loss), by excluding all extraordinary gains or losses
(net of reasonable fees and expenses relating to the transaction giving rise thereto) of such Person and its Subsidiaries.
"
Consolidated Net Tangible Assets
" of any Person as of any date means the total assets of such Person and its Subsidiaries as of the
Company's most recent fiscal quarter end for which a consolidated balance sheet of such Person and its Subsidiaries is available, minus all current liabilities of such Person and its Subsidiaries
reflected on such balance sheet and minus total goodwill and other intangible assets of such Person and its Subsidiaries reflected on such balance sheet, all calculated on a consolidated basis in
accordance with GAAP.
"
Construction Indebtedness
" means Indebtedness incurred by the Company or its Subsidiaries in connection with the construction of motion
picture theatres or screens.
"
Credit Agreement
" means that certain Credit Agreement, dated April 30, 2013 and as amended on December 11, 2015 and on
November 8, 2016, among the Company, as Borrower, the lenders and issuers party thereto, Citicorp North America, Inc., as administrative agent, Bank of America, N.A., as syndication
agent, Barclays Bank PLC, Credit Suisse Securities (USA) LLC and HSBC Bank USA, N.A. as co-documentation agents, and any related notes, collateral documents, letters of credit,
guarantees and other documents, and any appendices, exhibits or schedules to any of the foregoing, as any or all of such agreements may be amended, restated, modified or supplemented from time to
time, together with any extensions, revisions, increases, refinancings, renewals, refundings, restructurings or replacements thereof.
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"
Credit Facilities
" means one or more (i) debt facilities or commercial paper facilities, providing for revolving credit loans,
term loans, receivables financing (including through the sale of receivables to lenders or to special purpose entities to borrow from lenders against such receivables) or letters of credit, including,
without limitation, the Credit Agreement, (ii) debt securities, indentures or other forms of debt financing (including convertible or exchangeable debt instruments or bank guarantees or
bankers' acceptances), or (iii) instruments or agreements evidencing any other Indebtedness, in each case, with the same or different borrowers or issuers and, in each case, as amended,
supplemented, modified, extended, restructured, renewed, refinanced, restated, replaced or refunded in whole or in part from time to time.
"
Currency Hedging Obligations
" means the obligations of any Person pursuant to an arrangement designed to protect such Person against
fluctuations in currency exchange rates.
"
Debt Rating
" means the rating assigned to the notes by Moody's or S&P, as the case may be.
"
Default
" means any event which is, or after notice or the passage of time or both, would be, an Event of Default.
"
Designated Senior Indebtedness
" means:
(1) all
Senior Indebtedness under the Credit Agreement; and
(2) any
other Senior Indebtedness:
(a) which
at the time of determination exceeds $30.0 million in aggregate principal amount;
(b) which
is specifically designated in the instrument evidencing such Senior Indebtedness as "Designated Senior Indebtedness" by the Company or any Guarantor, as
applicable; and
(c) as
to which the Trustee has been given written notice of such designation.
"
Digital Projector Financing
" means any financing arrangement in respect of digital projector equipment for use in the ordinary course of
business in theatres owned, leased or operated by the Company and its Subsidiaries.
"
Equity Offering
" means a public or private sale for cash by the Company or of a direct or indirect parent of the Company (the proceeds of
which have been contributed to the Company) of common stock or preferred stock (other than Redeemable Capital Stock), or options, warrants or rights with respect to such Person's common stock or
preferred stock (other than Redeemable Capital Stock), other than public offerings with respect to such Person's common stock, preferred stock (other than Redeemable Capital Stock), or options,
warrants or rights, registered on Form S-4 or S-8.
"
Exchange
" means the Channel Islands Securities Exchange Authority Limited.
"
Exchange Act
" means the Securities Exchange Act of 1934, as amended.
"
Existing Notes
" means the Sterling Notes (solely in the 2017 Notes Indenture), the Company's 5.875% Senior Subordinated Notes due 2026
(solely in the 2017 Notes Indenture), the 5.75% Senior Subordinated Notes due 2025 and the 5.875% Senior Subordinated Notes due 2022.
"
Fair Market Value
" means, with respect to any asset or property, the sale value that would be obtained in an arm's-length transaction
between an informed and willing seller under no compulsion to sell and an informed and willing buyer under no compulsion to buy.
"
Foreign Restricted Subsidiary
" means a Restricted Subsidiary that is not organized or existing under the laws of the United States of
America or any state or territory thereof or the District of Columbia or is a Restricted Subsidiary of a Foreign Restricted Subsidiary.
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"
Generally Accepted Accounting Principles
" or "
GAAP
" means generally accepted accounting
principles in the United States as in effect on the Issue Date, consistently applied.
"
Government Securities
" means direct obligations (or certificates representing an ownership interest in such obligations) of, or
obligations guaranteed by, the United States of America (including any agency or instrumentality thereof) for the payment of which the full faith and credit of the United States of America is pledged
and which are not callable or redeemable at the issuer's option.
"
Guarantee
" means, with respect to any Person, any obligation, contingent or otherwise, of such Person directly or indirectly guaranteeing
any Indebtedness or other obligation of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of such Person:
(1) to
purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation of such other Person (whether arising by virtue of
partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement conditions or otherwise); or
(2) entered
into for purposes of assuring in any other manner the obligee of such Indebtedness or other obligation of the payment thereof or to protect such obligee against
loss in respect thereof (in whole or in part);
provided
that the term "Guarantee" shall not include endorsements for collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"
Guaranteed Indebtedness
" of any Person means, without duplication, all Indebtedness of any other Person referred to in the definition of
Indebtedness and all dividends of other Persons for the payment of which, in either case, such Person is directly or indirectly responsible or liable as obligor, guarantor or otherwise.
"
Guarantor
" means each Subsidiary of the Company that provides a Subsidiary Guarantee on the date of the Indenture and any other
Subsidiary of the Company that provides a Subsidiary Guarantee in accordance with the Indenture; provided that upon the release or discharge of such Subsidiary from its Subsidiary Guarantee in
accordance with the Indenture, such Subsidiary shall cease to be a Guarantor.
"
Incur
" means, with respect to any Indebtedness or other obligation of any Person, to create, issue, incur (by merger, conversion,
exchange or otherwise), extend, assume, Guarantee or become liable in respect of such Indebtedness or other obligation or the recording, as required pursuant to GAAP or otherwise, of any such
Indebtedness or obligation on the balance sheet of such Person (and "
Incurrence
" and "
Incurred
" shall
have meanings correlative to the foregoing); provided, however, that a change in GAAP that results in an obligation (including, without limitation, preferred stock, temporary equity, mezzanine equity
or similar classification) of such Person that exists at such time, and is not theretofore classified as Indebtedness, becoming Indebtedness shall not be deemed an Incurrence of such Indebtedness;
provided
further
,
however
, that any Indebtedness or other obligations of a Person existing at the time
such Person becomes a Subsidiary (whether by merger, consolidation, acquisition or otherwise) shall be deemed to be Incurred by such Subsidiary at the time it becomes a Subsidiary; and
provided further
,
however
, that solely for purposes of determining compliance with "Certain
CovenantsLimitation on Consolidated Indebtedness," amortization of debt discount shall not be deemed to be the Incurrence of Indebtedness,
provided
that in the case of Indebtedness sold at a
discount, the amount of such Indebtedness Incurred shall at all times be the aggregate principal
amount at stated maturity.
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"
Indebtedness
" means, with respect to any Person, without duplication:
(1) all
indebtedness of such Person for borrowed money or for the deferred purchase price of property or services, excluding any trade payables and other accrued current
liabilities Incurred in the ordinary course of business, but including, without limitation, all obligations of such Person in connection with any letters of credit and acceptances issued under letter
of credit facilities, acceptance facilities or other similar facilities, now or hereafter outstanding;
(2) all
obligations of such Person evidenced by bonds, notes, debentures or other similar instruments;
(3) all
indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even if 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), but excluding trade accounts payable arising in the ordinary course of business;
(4) every
obligation of such Person issued or contracted for as payment in consideration of the purchase by such Person or a Subsidiary of such Person of the Capital Stock
or substantially all of the assets of another Person or in consideration for the merger or consolidation with respect to which such Person or a Subsidiary of such Person was a party;
(5) all
indebtedness referred to in clauses (1) through (4) above of other Persons and all dividends of other Persons, the payment of which is secured by (or
for which the holder of such indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon or in 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;
(6) the
principal component of all obligations, or liquidation preference, of such Person with respect to any Redeemable Capital Stock or, with respect to any Subsidiary,
any Preferred Stock (but excluding, in each case, any accrued dividends);
(7) all
Guaranteed Indebtedness of such Person;
(8) all
obligations under Interest Rate Protection Agreements of such Person;
(9) all
Currency Hedging Obligations of such Person;
(10) all
Capital Lease Obligations of such Person; and
(11) any
amendment, supplement, modification, deferral, renewal, extension or refunding of any liability of the types referred to in clauses (1) through
(9) above.
"
Interest Rate Protection Agreement
" means any interest rate protection agreement, interest rate future agreement, interest rate option
agreement, interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedge agreement, option or future contract or other similar agreement or arrangement
designed to protect the Company or any of its Subsidiaries against fluctuations in interest rates.
"
Issue Date
" means March 13, 2017, in the case of the 6.125% Dollar Notes, and November 8, 2016 in the case of the Sterling
Notes and the 5.875% Dollar Notes.
"
Lien
" means, with respect to any property or asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in
respect of such property or asset, 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 and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.
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"
Listing Sponsor
" means the sponsor for the Company in respect of the listing of the notes on the Exchange as the Company may appoint,
which will initially be Ogier Corporate Finance Limited.
"
Maturity
" means, with respect to any note, the date on which the principal of such note becomes due and payable as provided in such note
or the applicable Indenture, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise.
"
Moody's
" means Moody's Investor Service, Inc. or any successor to the rating agency business thereof.
"
Net Cash Proceeds,
" with respect to any issuance or sale of Capital Stock, means the cash proceeds of such issuance or sale net of
attorneys' fees, accountants' fees, underwriters' or placement agents' fees, listing fees, discounts or commissions and brokerage, consultant and other fees and charges actually Incurred in connection
with such issuance or sale and net of taxes paid or payable as a result of such issuance or sale (after taking into account any available tax credit or deductions and any tax sharing arrangements).
"
Non-Recourse Indebtedness
" means Indebtedness as to which:
(1) none
of the Company or any of its Subsidiaries:
(a) provides
credit support (including any undertaking, agreement or instrument which would constitute Indebtedness); or
(b) is
directly or indirectly liable; and
(2) no
default with respect to such Indebtedness (including any rights which the holders thereof may have to take enforcement action against the relevant Unrestricted
Subsidiary or its assets) would permit (upon notice, lapse of time or both) any holder of any other Indebtedness of the Company or its Subsidiaries (other than Non-Recourse Indebtedness) to declare a
default on such other Indebtedness or cause the payment thereof to be accelerated or payable prior to its stated maturity.
"
Obligations
" means any principal (including reimbursement obligations and guarantees), premium, if any, interest (including interest
accruing on or after the filing of, or which would have accrued but for the filing of, any petition in bankruptcy or for reorganization relating to the Company whether or not a claim for post-filing
interest is allowed in such proceedings), penalties, fees, expenses, indemnifications, reimbursements, claims for rescission, damages, gross-up payments and other liabilities payable under the
documentation governing any Indebtedness or otherwise.
"
Officer
" means the Chairman of the Board, any Co-Chairman of the Board, the President, the Chief Executive Officer, any Executive Vice
President, any Senior Vice President and the Chief Financial Officer of the Company or any Guarantor, as applicable.
"
Officers' Certificate
" means a certificate signed by two Officers.
"
Opinion of Counsel
" means a written opinion of counsel to the Company or any other Person reasonably satisfactory to the Trustee.
"
Permitted Busines
s" means the lines of business conducted by the Company and its Subsidiaries on the Issue Date and any business
incidental or reasonably related thereto or which is a reasonable extension thereof as determined in good faith by the Board of Directors of the Company.
"
Permitted Holder
" means (i) any member of the Wanda Group; and (ii) any "group" as such term is used in
Section 13(d) and 14(d) of the Exchange Act of which members of the Wanda Group are members, but only if and for so long as members of the Wanda Group beneficially own (without giving effect to
any beneficial ownership of shares of other members of such group) more than 50% of the total voting power of the Voting Stock of the Company.
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"
Permitted Indebtedness
" means the following:
(1) Indebtedness
of the Company in respect of (a) in the 2017 Notes Indenture, the 6.125% Dollar Notes and (b) in the 2016 Notes Indenture, the Original
Sterling Notes issued in 2016 and the 5.875% Dollar Notes due 2026, and Indebtedness of the Guarantors in respect of the Subsidiary Guarantees, in each case issued on the Issue Date, and the related
exchange notes and exchange guarantees issued in registered exchange offers pursuant to the registration rights agreements;
(2) Indebtedness
of the Company or any Guarantor under Credit Facilities together with the guarantees thereunder and the issuance and creation of letters of credit and
bankers' acceptances thereunder (with letters of credit and bankers' acceptances being deemed to have a principal amount equal to the face amount thereof) in an aggregate principal amount at any one
time outstanding not to exceed $1,800.0 million;
(3) Indebtedness
of the Company or any Guarantor under the Existing Notes and the Guarantees thereof;
(4) Indebtedness
of the Company or any of its Subsidiaries outstanding on the Issue Date (other than the Existing Notes or Indebtedness outstanding under any Credit
Facilities);
(5) Indebtedness
of the Company or any of its Subsidiaries consisting of Permitted Interest Rate Protection Agreements;
(6) Indebtedness
of the Company or any of its Subsidiaries to any one or the other of them;
(7) Indebtedness
Incurred to renew, extend, refinance or refund (each, a "refinancing") the Existing Notes or any other Indebtedness outstanding on the Issue Date, including
the notes, in an aggregate principal amount not to exceed the principal amount of the Indebtedness so refinanced plus the amount of any premium required to be paid in connection with such refinancing
pursuant to the terms of the Indebtedness so refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing by means of a tender offer or
privately negotiated repurchase, plus the expenses of the Company incurred in connection with such refinancing;
(8) Indebtedness
of any Subsidiary Incurred in connection with the Guarantee of any Indebtedness of the Company or the Guarantors in accordance with the provisions of the
Indenture;
provided
that in the event such Indebtedness that is being Guaranteed is a Subordinated Obligation or Guarantor Subordinated Obligation, then
the related Guarantee shall be subordinated in right of payment to the Subsidiary Guarantee;
(9) Indebtedness
relating to Currency Hedging Obligations entered into solely to protect the Company or any of its Subsidiaries from fluctuations in currency exchange rates
and not to speculate on such fluctuations;
(10) Capital
Lease Obligations of the Company or any of its Subsidiaries;
(11) Indebtedness
incurred by the Company or any of its Subsidiaries to finance the purchase, lease or improvement of property (real or personal) or equipment (other than
software) that is used or useful in a Permitted Business (but excluding the purchase of Capital Stock of any Person), provided that the aggregate amount of Indebtedness incurred pursuant to this
clause (11) does not exceed the greater of (x) $300.0 million and (y) 7.5% of Consolidated Net Tangible Assets (determined as of the time of such incurrence) at any time
outstanding;
(12) Indebtedness
of the Company or any of its Subsidiaries in connection with one or more standby letters of credit or performance bonds issued in the ordinary course of
business or pursuant to self-insurance obligations;
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(13) Indebtedness
represented by property, liability and workers' compensation insurance (which may be in the form of letters of credit);
(14) Acquired
Indebtedness; provided that after giving effect to such acquisition, merger or consolidation, either
(i) the
Company would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Consolidated EBITDA Ratio test set forth in the first paragraph of
"Certain CovenantsLimitation on Consolidated Indebtedness"; or
(ii) the
Consolidated EBITDA Ratio of the Company would be equal to or greater than immediately prior to such acquisition, merger or consolidation;
(15) Indebtedness
of the Company or any of its Subsidiaries to an Unrestricted Subsidiary for money borrowed;
provided
that
such Indebtedness is subordinated in right of payment to the notes and the Weighted Average Life of such Indebtedness is greater than the Weighted Average Life of the notes;
(16) Construction
Indebtedness in an aggregate principal amount that does not exceed $300.0 million at any time outstanding;
(17) Indebtedness
incurred by the Company or any Subsidiary with respect to Digital Projector Financing in an aggregate principal amount incurred not to exceed
(i) $70.0 million during the period from the Issue Date to the first anniversary thereof; (ii) $70.0 million during the period from the first anniversary of the Issue Date
to the second anniversary of the Issue Date and (iii) $60.0 million after the second anniversary of the Issue Date;
provided
that any
unused or repaid amounts may be carried forward and used in subsequent periods without limitation;
(18) Indebtedness
of Foreign Restricted Subsidiaries of the Company in an aggregate principal amount not to exceed £100.0 million or its equivalent in
other currencies measured at the time such lines are committed under lines of credit to any such Foreign Restricted Subsidiary from Persons other than the Company or any of its Subsidiaries, the
proceeds of which Indebtedness are used for such Foreign Restricted Subsidiary's working capital and other general corporate purposes;
(19) Indebtedness
under the Carmike Notes and the Guarantees thereof; and
(20) Indebtedness
of the Company or a Subsidiary Guarantor not otherwise permitted to be Incurred pursuant to clauses (1) through (19) above which, together
with any other Indebtedness Incurred pursuant to this clause (20), has an aggregate principal amount that does not exceed $550.0 million at any time outstanding.
"
Permitted Interest Rate Protection Agreement
s" means, with respect to any Person, Interest Rate Protection Agreements entered into in the
ordinary course of business by such Person that are designed to protect such Person against fluctuations in interest rates with respect to Permitted Indebtedness and that have a notional amount no
greater than the payment due with respect to Permitted Indebtedness hedged thereby.
"
Permitted Junior Securities
" means equity securities or subordinated securities of the Company or any successor obligor provided for by a
plan of reorganization or readjustment that, in the case of any such subordinated securities, are subordinated in right of payment to all Senior Indebtedness that may at the time be outstanding to at
least the same extent as the notes are so subordinated as provided in the Indenture.
"
Permitted Liens
" means:
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(2) Liens
on property of a Person existing at the time such Person is merged with or into or consolidated with the Company or any 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 Subsidiary;
(3) Liens
on property existing at the time of acquisition of the property by the Company or any Subsidiary of the Company; provided that such Liens were in existence prior
to the contemplation of such acquisition and do not extend to any other assets;
(4) Liens
to secure the performance of statutory obligations, surety or appeal bonds, performance bonds or other obligations of a like nature incurred in the ordinary course
of business and related letters of credit;
(5) Liens
to secure Indebtedness (including Capital Lease Obligations) permitted by clauses (10) and (11) of the definition of "Permitted Indebtedness"
covering only the assets, accessions, improvements and proceeds acquired with such Indebtedness;
(6) Liens
existing on the Issue Date (excluding Liens relating to obligations under Credit Facilities);
(7) Liens
for taxes, assessments or governmental charges or claims that are not yet delinquent or that are being contested in good faith by appropriate proceedings promptly
instituted, provided that any reserve or other appropriate provision as is required in conformity with GAAP has been made therefor;
(8) Liens
on the Capital Stock of Unrestricted Subsidiaries;
(9) Encumbrances,
easements or reservations of, or rights of others for, licenses, rights of way, sewers, electric lines, telegraph and telephone lines and other similar
purposes, or zoning, building codes or other restrictions (including, without limitation, minor defects or irregularities in title and similar encumbrances) as to the use of real properties or liens
incidental to the conduct of the business of the Company or such Subsidiary or to the ownership or leasing of its properties which, in the aggregate, do not materially detract from the value of the
property subject thereto or materially interfere with the ordinary conduct of the business of the Company or such Subsidiary;
(10) Leases
or subleases granted to others that do not materially interfere with the ordinary course of business of the Company and its Subsidiaries, taken as a whole;
(11) Landlords',
carriers', warehousemen's, mechanics', materialmen's, repairmen's or the like Liens arising by contract or statute in the ordinary course of business and
with respect to amounts which are
not yet delinquent or are not more than 60 days past due or are being contested in good faith by appropriate proceedings;
provided
that any
reserve or other appropriate provision as is required in conformity with GAAP has been made therefor;
(12) Pledges
or deposits made in the ordinary course of business (A) in connection with bids, tenders, leases, performance bonds and similar obligations, or
(B) in connection with workers' compensation, unemployment insurance and other social security or similar legislation;
(13) Liens
encumbering property or assets under construction arising from progress or partial payments by a customer of the Company or its Subsidiaries relating to such
property or assets;
(14) Liens
in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods;
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(15) Liens
arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into by the Company or any of its Subsidiaries
in the ordinary course of business;
(16) the
rights of film distributors under film licensing contracts entered into by the Company or any Subsidiary in the ordinary course of business on a basis customary in
the movie exhibition industry;
(17) any
attachment or judgment Lien that does not constitute an Event of Default;
(18) Liens
in favor of the Trustee for its own benefit and for the benefit of the holders of the 6.125% Dollar Notes, in the case of the 2017 Notes Indenture, and the
Sterling Notes and the 5.875% Dollar Notes, in the case of the 2016 Notes Indenture;
(19) Liens
incurred or deposits made to secure the performance of tenders, bids, leases, statutory or regulatory obligations, banker's acceptances, surety and appeal bonds,
government contracts, performance and return-of-money bonds and other obligations of a similar nature incurred in the ordinary course of business (exclusive of obligations for the payment of borrowed
money);
(20) Liens
securing Currency Hedging Obligations;
(21) Liens
arising from filing Uniform Commercial Code financing statements with respect to leases;
(22) Liens
arising solely by virtue of any statutory or common law provisions and ordinary course of business contractual provisions, in each case, relating to banker's
Liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a depositary institution or brokerage;
(23) Liens
on property or shares of stock of a Person at the time such Person becomes a Subsidiary;
provided
,
however
, that such Liens are not created, incurred or
assumed in connection with, or in contemplation of, such other Person becoming a Restricted
Subsidiary;
provided further
,
howeve
r, that any such Lien may not extend to any other property owned by
the Company or any Subsidiary;
(24) Liens
securing the 6.125% Dollar Notes, in the case of the 2017 Notes Indenture, and the Sterling Notes and the 5.875% Dollar Notes, in the case of the 2016 Notes
Indenture and the Subsidiary Guarantees;
(25) Liens
securing Indebtedness incurred to refinance Indebtedness that was previously so secured;
provided
that any such
Lien is limited to all or part of the same property or assets (plus improvements, accessions, proceeds or dividends or distributions in respect thereof) that secured (or, under the written
arrangements under which the original Lien arose, could secure) the Indebtedness being refinanced;
(26) leases,
licenses, subleases and sublicenses of assets (including, without limitation, real property and intellectual property rights) which do not materially interfere
with the ordinary conduct of the business of the Company or any of its Subsidiaries;
(27) Liens
arising under the Indenture in favor of the Trustee for its own benefit and similar Liens in favor of other trustees, agents and representatives arising under
instruments governing Indebtedness permitted to be incurred or outstanding under the Indenture, provided that such Liens are solely for the benefit of the trustees, agents and representatives in their
capacities as such and not for the benefit of the holders of such Indebtedness;
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(28) Liens
arising from the deposit of funds or securities in trust for the purpose of decreasing or defeasing Indebtedness; and
(29) Liens
incurred in the ordinary course of business of the Company or any Guarantor with respect to obligations that do not exceed $75.0 million at any one time
outstanding.
In
each case set forth above, notwithstanding any stated limitation on the assets that may be subject to such Lien, a Permitted Lien on a specified asset or group or type of assets may
include Liens on all improvements, additions and accessions thereto and all products and proceeds thereof, including dividends, distributions, interest and increases in respect thereof.
"
Person
" means any individual, corporation, partnership, limited liability company, joint venture, association, joint stock company,
trust, estate, unincorporated organization or government or any agency or political subdivision thereof.
"
Preferred Stock
," as applied to the Capital Stock of any corporation, means Capital Stock of any class or classes (however designated)
which is preferred as to the payment of dividends, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such corporation, over shares of Capital Stock of
any other class of such corporation.
"
Quotation Agent
" means the Reference Treasury Dealer selected by the Company.
"
Redeemable Capital Stock
" means any Capital Stock that, either by its terms, by the terms of any security into which it is convertible or
exchangeable or otherwise, is or upon the happening of an event or passage of time would be required to be redeemed prior to the final Stated Maturity of the notes or is mandatorily redeemable at the
option of the holder thereof at any time prior to such final Stated Maturity (except for any such Capital Stock that would be required to be redeemed or is redeemable at the option of the holder if
the issuer thereof may redeem such Capital Stock for consideration consisting solely of Capital Stock that is not Redeemable Capital Stock), or is convertible into or exchangeable for debt securities
at any time prior to such final Stated Maturity at the option of the holder thereof.
"
Reference Treasury Dealer
" means any three nationally recognized investment banking firms selected by the Company that are primary
dealers of Government Securities.
"
Reference Treasury Dealer Quotations
" means, with respect to each Reference Treasury Dealer and any redemption date, the average, as
determined by the Company, of the bid and asked prices for the Comparable Treasury Issue with respect to the Dollar Notes, expressed in each case as a percentage of its principal amount, quoted in
writing to the Company by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third business day immediately preceding the redemption date.
"
Restricted Payments
" has the meaning set forth in the "Limitation on Restricted Payments" covenant.
"
Restricted Payments Computation Period
" means the period (taken as one accounting period) from January 1, 2014 to the last day of
the Company's fiscal quarter preceding the date of the applicable proposed Restricted Payment.
"
SEC
" means the United States Securities and Exchange Commission.
"
S&P
" means Standard & Poor's Ratings Service or any successor to the rating agency business thereof.
"
Senior Indebtedness
" means, whether outstanding on the Issue Date or thereafter issued, created, Incurred or assumed, all amounts payable
by the Company and its Subsidiaries under or in respect of Indebtedness of the Company and its Subsidiaries, including the notes and premiums and accrued and unpaid interest (including interest
accruing on or after the filing of any petition in bankruptcy or for
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reorganization
relating to the Company or any of its Subsidiaries at the rate specified in the documentation with respect thereto whether or not a claim for post filing interest is allowed in such
proceeding) and fees relating thereto;
provided
,
however
, that Senior Indebtedness will not include:
(1) any
obligation of the Company to any Subsidiary or any obligation of a Subsidiary to the Company or another Subsidiary;
(2) any
liability for federal, state, foreign, local or other taxes owed or owing by the Company or any of its Subsidiaries;
(3) any
accounts payable or other liability to trade creditors arising in the ordinary course of business (including Guarantees thereof or instruments evidencing such
liabilities);
(4) any
Indebtedness, Guarantee or obligation of the Company or any of its Subsidiaries that is expressly subordinate or junior in right of payment to any other
Indebtedness, Guarantee or obligation of the Company or any of its Subsidiaries, as the case may be, including, without limitation, any Subordinated Obligations or Guarantor Subordinated Obligations;
(5) any
Capital Stock; or
(6) the
Offered Notes or the Existing Notes.
"
Senior Subordinated Indebtedness
" means (i) with respect to the Company, the Offered Notes, the Existing Notes and any other
Indebtedness of the Company that specifically provides that such Indebtedness is to have the same ranking as the notes in right of payment and is not subordinated by its terms in right of payment to
any Indebtedness or other obligation of the Company which is not Senior Indebtedness and (ii) with respect to any Guarantor, the Subsidiary Guarantees, the Guarantees of the Existing Notes and
any other Indebtedness of such Guarantor that specifically provides that such Indebtedness is to have the same ranking as the Subsidiary Guarantees in right of payment and is not subordinated by its
terms in right of payment to any Indebtedness or other obligation of such Guarantor which is not Senior Indebtedness.
"
Significant Subsidiary
" means any Subsidiary that would be a "Significant Subsidiary" of the Company within the meaning of
Rule 1-02 under Regulation S-X promulgated by the SEC.
"
Special Interest
" means the additional interest, if any, to be paid on the notes as described under "Exchange Offer; Registration
Rights".
"
Stated Maturity
", when used with respect to any note or any installment of interest thereof, means the date specified in such note as the
fixed date on which the principal of such note or such installment of interest is due and payable.
"
Subordinated Obligation
" means any Indebtedness of the Company (whether outstanding on the Issue Date or thereafter Incurred) which is
subordinate or junior in right of payment to the notes pursuant to a written agreement.
"
Subsidiary
" of any person means:
(1) any
corporation of which more than 50% of the outstanding shares of Capital Stock having ordinary voting power for the election of directors is owned directly or
indirectly by such Person; and
(2) any
partnership, limited liability company, association, joint venture or other entity in which such Person, directly or indirectly, has more than a 50% equity interest,
and, except as otherwise indicated herein, references to Subsidiaries shall refer to Subsidiaries of the Company.
Notwithstanding
the foregoing, for purposes hereof, an Unrestricted Subsidiary shall not be deemed a Subsidiary of the Company other than for purposes of the definition of "Unrestricted
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Subsidiary"
unless the Company shall have designated in writing to the Trustee an Unrestricted Subsidiary as a Subsidiary. A designation of an Unrestricted Subsidiary as a Subsidiary may not
thereafter be rescinded.
"
Subsidiary Guarantee
" means, individually, any Guarantee of payment of the notes and exchange notes issued in a registered exchange offer
for the notes pursuant to the 2017 Registration Rights Agreement and the 2016 Registration Rights Agreement, as applicable, by a Guarantor and any supplemental indenture applicable thereto, and,
collectively, all such Guarantees. Each such Subsidiary Guarantee will be in the form prescribed in each Indenture.
"
Surviving Entity
" has the meaning set forth under "Merger and Sale of Substantially All Assets".
"
Tax Payment Agreement
" means the Tax Payment Agreement, dated as of October 15, 2013, among Wanda America Investment
Holding Co. Ltd, the Company and American Multi-Cinema Inc.
"
Theatre Completion
" means any motion picture theatre or screen which was first opened for business by the Company or a Subsidiary during
any applicable period.
"
UK
" means The United Kingdom.
"
UK Government Obligations
" means sovereign obligations of the UK for the timely payment of which its full faith and credit is pledged, in
each case which are payable in pounds sterling and not callable or redeemable at the option of the Company thereof.
"
Unrestricted Subsidiary
" means a Subsidiary of the Company designated in writing to the Trustee:
(1) whose
properties and assets, to the extent they secure Indebtedness, secure only Non-Recourse Indebtedness;
(2) that
has no Indebtedness other than Non-Recourse Indebtedness; and
(3) that
has no Subsidiaries other than Unrestricted Subsidiaries.
"
Voting Stock
" of a Person means all classes of Capital Stock or other interests (including partnership interests) of such Person then
outstanding and normally entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof.
"
Wanda
" means Dalian Wanda Group Co., Ltd., a Chinese private conglomerate.
"
Wanda Group
" means Wanda and any Affiliate of Wanda.
"
Weighted Average Life
" means, as of any date, with respect to any debt security, the quotient obtained by dividing (1) the sum of
the products of the number of years from such date to the dates of each successive scheduled principal payment (including any sinking fund payment requirements) of such debt security multiplied by the
amount of such principal payment, by (2) the sum of all such principal payments.
"
Wholly Owned Subsidiary
" of any Person means a Subsidiary of such Person, all of the Capital Stock (other than directors' qualifying
shares) or other ownership interests of which shall at the time be owned by such Person or by one or more Wholly Owned Subsidiaries of such Person or by such Person and one or more Wholly Owned
Subsidiaries of such Person.
Events of Default
The following will be "Events of Default" under the Indenture:
(1) default
in the payment of any interest (including Special Interest) on any note under such Indenture when it becomes due and payable and continuance of such default for
a period of 30 days;
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(2) default
in the payment of the principal of or premium, if any, on any note under such Indenture at its Maturity (upon acceleration, optional redemption, required
purchase or otherwise);
(3) failure
to comply with the covenants described under "Merger and Sale of Substantially All Assets";
(4) default
in the performance, or breach, of any covenant or warranty of the Company contained in the Indenture (other than a default in the performance, or breach, of a
covenant or warranty which is specifically dealt with in clause (1), (2) or (3) above) and continuance of such default or breach for a period of 60 days after written
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) (a)
one or more defaults in the payment of principal of or premium, if any, on Indebtedness of the Company or any Significant Subsidiary, aggregating
$50.0 million or more, when the same becomes due and payable at the stated maturity thereof, and such default or defaults shall have continued after any applicable grace period and shall not
have been cured or waived or (b) Indebtedness of the Company or any Significant Subsidiary, aggregating $50.0 million or more shall have been accelerated or otherwise
declared due and payable, or required to be prepaid, or repurchased (other than by regularly scheduled prepayment) prior to the stated maturity thereof;
(6) any
holder of any Indebtedness in excess of $50.0 million in the aggregate of the Company or any Significant Subsidiary shall notify the Trustee of the intended
sale or disposition of any assets of the Company or any Significant Subsidiary that have been pledged to or for the benefit of such Person to secure such Indebtedness or shall commence proceedings, or
take action (including by way of set-off) to retain in satisfaction of any such Indebtedness, or to collect on, seize, dispose of or apply, any such asset of the Company or any Significant Subsidiary
pursuant to the terms of any agreement or instrument evidencing any such Indebtedness of the Company or any Significant Subsidiary or in accordance with applicable law;
(7) one
or more final judgments or orders shall be rendered against the Company or any Significant Subsidiary for the payment of money, either individually or in an
aggregate amount, in excess of $50.0 million and shall not be discharged and either (a) an enforcement proceeding shall have been commenced by any creditor upon such judgment or order or
(b) there shall have been a period of 60 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, was not in effect;
(8) the
occurrence of certain events of bankruptcy, insolvency or reorganization with respect to the Company or any Significant Subsidiary; and
(9) except
as permitted by the Indenture, the Guarantee of any Significant Subsidiary 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.
If
an Event of Default (other than an Event of Default specified in clause (8) above) shall occur and be continuing, the Trustee or the holders of not less than 25% in aggregate
principal amount of the notes then outstanding of any series, may declare the principal, premium, if any, and accrued and unpaid interest, if any, of all notes of such series due and payable;
provided, however
, that so long as the Credit Agreement shall be in full force and effect, if an Event of Default shall occur and be
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continuing
(other than an Event of Default specified in clause (8)), any such acceleration shall not become effective until the earlier of:
(a) five
Business Days following a delivery of a notice of such acceleration to the agent under the Credit Agreement; and
(b) the
acceleration of any amounts under the Credit Agreement.
If
an Event of Default specified in clause (8) above occurs and is continuing, then the principal, premium, if any, and accrued and unpaid interest, if any, of all the notes of
such series shall become due and payable without any declaration or other act on the part of the Trustee or any holder of notes. After a declaration of acceleration, but before a judgment or decree
for payment of the money due has been obtained by the Trustee, the holders of a majority in aggregate principal amount of the outstanding notes of any series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if:
(1) the
Company has paid or deposited, or caused to be paid or deposited, with the Trustee a sum sufficient to pay:
(a) all
sums paid or advanced by the Trustee under the Indenture and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and
counsel;
(b) all
overdue interest (including Special Interest) on all notes of such series;
(c) the
principal of and premium, if any, on any notes of such series that have become due otherwise than by such declaration of acceleration and interest thereon at the
rate borne by the notes of such series; and
(d) to
the extent that payment of such interest is lawful, interest upon overdue interest at the rate borne by the notes of such series; and
(2) all
Events of Default, other than the non-payment of principal of the notes of such series which have become due solely by such declaration of acceleration, have been
cured or waived.
Notwithstanding
the preceding paragraph, in the event of a declaration of acceleration in respect of the notes of such series because an Event of Default specified in
paragraph (5) above shall have occurred and be continuing, such declaration of acceleration shall be automatically annulled if the Indebtedness that is the subject of such Event of Default
(1) is Indebtedness in the form of an operating lease
entered into by the Company or its Subsidiaries after May 21, 1998 and required to be reflected on a consolidated balance sheet pursuant to EITF 97-10 or any subsequent pronouncement
having similar effect, (2) has been discharged or the holders thereof have rescinded their declaration of acceleration in respect of such Indebtedness, and (3) written notice of such
discharge or rescission, as the case may be, shall have been given to the Trustee by the Company and countersigned by the holders of such Indebtedness or a trustee, fiduciary or agent for such
holders, within 30 days after such declaration of acceleration in respect of the notes, and no other Event of Default has occurred during such 30 day period which has not been cured or
waived during such period.
Each
Indenture contains a provision entitling the Trustee, subject to the duty of the Trustee during the existence of an Event of Default to act with the required standard of care, to be
indemnified, to the extent satisfactory to the Trustee against loss, liability or expense, by the holders of notes before proceeding to exercise any right or power under the Indenture at the request
of such holders. Each Indenture provides that, subject to certain limitations therein, the holders of a majority in aggregate principal amount of the notes then outstanding may direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred upon the Trustee.
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During the existence of an Event of Default, the Trustee is required to exercise such rights and powers vested in it under the Indenture and use the same degree
of care and skill in its exercise as a prudent person would exercise under the circumstances in the conduct of such person's own affairs.
The
Trust Indenture Act of 1939 contains limitations on the rights of the Trustee, should it be a creditor of the Company, to obtain payment of claims in certain cases or to realize on
certain property received by it in respect of any such claims, as security or otherwise. The Trustee is permitted to engage in other transactions; provided that if it acquires any conflicting interest
it must eliminate such conflict upon the occurrence of an Event of Default or else resign.
The
Company will be required to furnish to the Trustee annually a statement as to any default by the Company in the performance and observance of its obligations under the Indenture.
Defeasance and Covenant Defeasance of each Indenture
The Company may, at its option, and at any time, elect to have the obligations of the Company discharged with respect to all outstanding notes
of any series and all obligations of the Guarantors discharged with respect to their Subsidiary Guarantee ("defeasance"). Such defeasance means that the Company shall be deemed to have paid and
discharged the entire indebtedness represented by the outstanding notes of such series and to have satisfied its other obligations under the Indenture with respect to such notes, except for the
following which shall survive until otherwise terminated or discharged:
(1) the
rights of holders of outstanding notes to receive payments in respect of the principal of, premium, if any, and interest (including Special Interest) on such notes
when such payments are due;
(2) the
Company's obligations with respect to the notes relating to the issuance of temporary notes, the registration, transfer and exchange of notes, the replacement of
mutilated, destroyed, lost or stolen notes, the maintenance of an office or agency in The City of New York, the holding of money for security payments in trust and statements as to compliance with the
Indenture;
(3) its
obligations in connection with the rights, powers, trusts, duties and immunities of the Trustee; and
(4) the
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 restrictive covenants under
the Indenture ("covenant defeasance") with respect to the notes of a series and any omission to comply with such obligations shall not constitute a Default or an Event of Default with respect to the
notes of such series. In the event covenant defeasance occurs, certain events (not including non-payment, bankruptcy and insolvency events) described under "Events of Default" will no longer
constitute Events of Default with respect to the notes.
In
order to exercise either defeasance or covenant defeasance:
(1) the
Company must irrevocably deposit with the Trustee, in trust, for the benefit of the holders of the notes of the applicable series, cash in U.S. dollars, certain U.S.
government obligations, or a
combination thereof, with respect to the Dollar Notes, or cash in Pounds Sterling, certain UK Government Obligations, or a combination thereof, with respect to the Sterling Notes in such amounts as
will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of (and premium, if any, on) and interest (including Special Interest) on the
outstanding notes of the applicable series on the Stated Maturity (or redemption date, if applicable) of such principal (and premium, if any) or installment of interest;
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(2) in
the case of defeasance, the Company shall have delivered to the Trustee an Opinion of Counsel stating 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 this prospectus, there has been a change in the applicable United States federal income tax law, in either case to the effect that, and based
thereon such Opinion of Counsel shall confirm that, the beneficial owners of the outstanding notes will not recognize income, gain or loss for United States federal income tax purposes as a result of
such defeasance and will be subject to United States federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such defeasance had not occurred;
(3) in
the case of covenant defeasance, the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that the beneficial owners of the outstanding
notes will not recognize income, gain or loss for United States federal income tax purposes as a result of such covenant defeasance and will be subject to United States 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) the
Company shall have delivered to the Trustee an Opinion of Counsel to the effect that such deposit shall not cause the Trustee or the trust so created to be subject
to the Investment Company Act of 1940; and
(5) the
Company must comply with certain other conditions, including that such defeasance or covenant defeasance will not result in a breach or violation of, or constitute a
default under, each Indenture or any material agreement or instrument to which the Company is a party or by which it is bound.
Satisfaction and Discharge
Each Indenture will be discharged and will cease to be of further effect as to all notes of a series issued thereunder, when:
(1) either:
(a) all
such notes that have been authenticated under the Indenture, except notes that have been lost, destroyed or wrongfully taken and that have been replaced or paid and
notes for whose payment money has been deposited in trust and thereafter repaid to the Company, have been delivered to the Trustee for cancellation; or
(b) all
notes under the Indenture that have not been delivered to the Trustee for cancellation have become due and payable, whether at maturity or upon redemption or will
become due and payable within one year or are to be called for redemption within one year and the Company has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust
solely for the benefit of the holders, U.S. dollars and non-callable Government Securities, in the case of the Dollar Notes, or Pounds Sterling and UK Government Obligations, in the case of Sterling
Notes, in amounts as will be sufficient without consideration of any reinvestment of interest, to pay and discharge the entire Indebtedness on the notes of the applicable series not delivered to the
Trustee for cancellation for principal, premium and Special Interest, if any, and accrued interest to the date of maturity or redemption;
(2) no
Default or Event of Default has occurred and is continuing on the date of the deposit or will occur as a result of the deposit and the deposit will not result in a
breach or violation of, or
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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 the Securities; 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 issued thereunder at
maturity or at the redemption date, as the case may be.
In
addition, the Company, at the Company's cost and expense, must deliver an Officers' Certificate and an opinion of counsel to the Trustee stating that all conditions precedent to the
satisfaction and discharge have been satisfied.
Modification and Waiver
Modifications and amendments of the Indenture may be entered into by the Company and the Trustee with the consent of the holders of not less
than a majority in aggregate principal amount of the outstanding notes under such Indenture voting together as a single class;
provided
,
however
, that no
such modification or amendment may, without the consent of the holder of each outstanding note under such Indenture affected thereby:
(1) change
the Stated Maturity of the principal of, or any installment of interest (including Special Interest) on, any note, or reduce the principal amount thereof or the
rate of interest (including Special Interest) thereon or any premium payable upon the redemption thereof, or change the coin or currency in which any note or any premium or the interest (including
Special Interest) thereon is payable, or impair the right to institute suit for the enforcement of any such payment after the Stated Maturity thereof (or, in the case of redemption, on or after the
redemption date);
(2) reduce
the amount of, or change the coin or currency of, or impair the right to institute suit for the enforcement of, the Change of Control Purchase Price;
(3) reduce
the percentage in principal amount of outstanding notes, the consent of whose holders is necessary to amend or waive compliance with certain provisions of the
Indenture or to waive certain defaults;
(4) modify
any of the provisions relating to supplemental indentures requiring the consent of holders of the notes, relating to the rights of holders to receive payment of
principal and interest on the notes, or to bring suit for the enforcement of such payment, on or after the respective due dates set forth in the notes, relating to the waiver of past defaults or
relating to the waiver of certain covenants, except to increase the percentage of outstanding notes the consent of whose holders is required for such actions or to provide that certain other
provisions of the Indenture cannot be modified or waived without the consent of the holder of each note affected thereby; or
(5) modify
any of the provisions of the Indenture relating to the subordination of the notes in a manner adverse to any holder of notes.
The
holders of a majority in aggregate principal amount of the outstanding notes under such Indenture voting together as a single class may waive compliance with certain restrictive
covenants and provisions of the Indenture.
Without
the consent of any holder of the notes, the Company and the Trustee may amend each Indenture to: cure any ambiguity, omission, defect or inconsistency; provide for the assumption
by a successor corporation of the obligations of the Company under the Indenture; provide for uncertificated notes in addition to or in place of certificated notes (provided that the uncertificated
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notes
are issued in registered form for purposes of Section 163(f) of the Code or in a manner such that the uncertificated Securities are described in Section 163(f)(2)(B) of the Code;
add Guarantees with respect to the notes; secure the notes; add to the covenants of the Company for the benefit of the holders of the notes or to surrender any right or power conferred upon the
Company; make any change that does not adversely affect the rights of any holder of the notes; make any change to the subordination provisions of the Indenture that would limit or terminate the
benefits available to any holder of Senior Indebtedness under such provisions; or comply with any requirement of the SEC in connection with the qualification of the Indenture under the Trust Indenture
Act.
Book-Entry System
The Sterling Notes will be deposited with, and registered in the name of, the nominee of a common depository for Euroclear Bank SA/NV
("Euroclear") and Clearstream Banking
societe anonyme ("Clearstream") and the Dollar Notes will be deposited with the Trustee as custodian for the Depositary. The Depository or its nominee will initially be the sole registered holder of
the notes for all purposes under each Indenture. Except as set forth below, a Global Security may not be transferred except as a whole by the Depository to a nominee of the Depository or by a nominee
of the Depository to the Depository.
Upon
the issuance of a Global Security, the Depository or its nominee will credit, on its internal system, the accounts of persons holding through it with the respective principal
amounts of the individual beneficial interest represented by such Global Security purchased by such persons in this offering. Such accounts shall initially be designated by the initial purchasers with
respect to notes placed by the initial purchasers for the Company. Ownership of beneficial interests in a Global Security will be limited to persons that have accounts with the Depository
("participants") or persons that may hold interests through participants. Any person acquiring an interest in a Global Security through an offshore transaction in reliance on Regulation S of
the Securities Act may hold such interest through Euroclear or Clearstream. Ownership of beneficial interests by participants in a Global Security will be shown on, and the transfer of that ownership
interest will be effected only through, records maintained by the Depository or its nominee for such Global Security. Ownership of beneficial interests in such Global Security by persons that hold
through participants will be shown on, and the transfer of that ownership interest within such participant will be effected only through, records maintained by such participant. The laws of some
jurisdictions require that certain purchasers of securities take physical delivery of such securities in definitive form. Such limits and such laws may impair the ability to transfer beneficial
interests in a Global Security.
Payment
of principal, premium, if any, and interest on notes represented by any such Global Security will be made to the Depository or its nominee, as the case may be, as the sole
registered owner and the sole holder of the notes represented thereby for all purposes under the Indenture. None of the Company, the Trustee, any agent of the Company or the initial purchasers will
have any responsibility or liability for any aspect of the Depository's reports relating to or payments made on account of beneficial ownership interests in a Global Security representing any notes or
for maintaining, supervising or reviewing any of the Depository's records relating to such beneficial ownership interests.
The
Company expects that upon receipt of any payment of principal of, premium, if any, or interest on any Global Security, the Depository will immediately credit, on its book-entry
registration and transfer system, the accounts of participants with payments in amounts proportionate to their respective beneficial interests in the principal or face amount of such Global Security,
as shown on the records of the Depository. The Company expects that payments by participants to owners of beneficial interests in a Global Security held through such participants will be governed by
standing instructions and customary practices as is now the case with securities held for customer accounts registered in "street name" and will be the sole responsibility of such participants.
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So
long as the Depository or its nominee is the registered owner or holder of such Global Security, the Depository or such nominee, as the case may be, will be considered the sole owner
or holder of the notes represented by such Global Security for the purposes of receiving payment on the notes, receiving notices and for all other purposes under each Indenture and the notes.
Beneficial interests in the notes will be evidenced only by, and transfers thereof will be effected only through, records maintained by the Depository and its participants. Except as provided below,
owners of beneficial interests in a Global Security will not be entitled to receive physical delivery of certificated notes in definitive form and will not be considered the holders of such Global
Security for any purposes under each Indenture. Accordingly, each person owning a beneficial interest in a Global Security must rely on the procedures of the Depository and, if such person is not a
participant, on the procedures of the participant through which such person owns its interest, to exercise any rights of a holder under each Indenture. The Company understands that under existing
industry practices, in the event that the Company requests any action of holders or that an owner of a beneficial interest in a Global Security desires to give or take any action that a holder is
entitled to give or take under each Indenture, the Depository would authorize the participants holding the relevant beneficial interest to give or take such action, and such participants would
authorize beneficial owners owning through such participants to give or take such action or would otherwise act upon the instructions of beneficial owners owning through them.
The
Company understands that the Depository 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 with the
Depository interests in the Global Security are credited 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.
Although
the Depository has agreed to the foregoing procedures in order to facilitate transfers of interests in Global Securities among participants of the Depository, it is under no
obligation to perform or continue to perform such procedures, and such procedures may be discontinued at any time. None of the Company, the Trustee, any agent of the Company or the initial purchasers
will have any responsibility for the performance by the Depository or its participants or indirect participants of their respective obligations under the rules and procedures governing their
operations.
The
Depository has advised the Company that the Depository is a limited-purpose trust company organized under the Banking Law of the State of New York, a "banking organization" within
the meaning of New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code and a "clearing agency" registered
under the Exchange Act. The Depository was created to hold the securities of its participants and to facilitate the clearance and settlement of securities transactions among its participants in such
securities through electronic book-entry changes in accounts of the participants, thereby eliminating the need for physical movement of securities certificates. The Depository's participants include
securities brokers and dealers (including the initial purchasers), banks, trust companies, clearing corporations and certain other organizations, some of whom (and/or their representatives) own the
Depository. Access to the Depository's book-entry system is also available to others, such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a
participant, either directly or indirectly.
Certificated Notes
Notes represented by a Global Security are exchangeable for certificated notes only if (i) the Depository notifies the Company that it is
unwilling or unable to continue as a depository for such Global Security or if at any time the Depository ceases to be a clearing agency registered under the Exchange Act, and a successor depository
is not appointed by the Company within 90 days, (ii) the Company executes and delivers to the Trustee a notice that such Global Security shall be so
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transferable,
registrable and exchangeable, and such transfer shall be registrable or (iii) there shall have occurred and be continuing an Event of Default or an event which, with the giving of
notice or lapse of time, or both, would constitute an Event of Default with respect to the notes represented by such Global Security. Any Global Security that is exchangeable for certificated notes
pursuant to the preceding sentence will be transferred to, and registered and exchanged for, certificated notes in authorized denominations and registered in such names as the Depository or its
nominee holding such Global Security may direct. Subject to the foregoing, a Global Security is not exchangeable, except for a Global Security of like denomination to be registered in the name of the
Depository or its nominee. In the event that a Global Security becomes exchangeable for certificated notes, (i) certificated notes will be issued only in fully registered form in denominations
of (i) $2,000 and integral multiples of $1,000, in case of New Dollar Notes, and (ii) £100,000 and in integral multiples of £1,000, in case of New Sterling
Notes (ii) payment of principal, premium, if any, and interest on the certificated notes will be payable, and the transfer of the certificated notes will be registrable; at the office or agency
of the Company maintained for such purposes and (iii) no service charge will be made for any issuance of the certificated notes, although the Company may require payment of a sum sufficient to
cover any tax or governmental charge imposed in connection therewith. In addition, such certificates will bear the legend referred to under "Notice to Investors" (unless the Company determines
otherwise in accordance with applicable law) subject, with respect to such notes, to the provisions of such legend.
Redemption of Global Notes
In the event any Global Security (or any portion thereof) is redeemed, Euroclear, Clearstream or the Depository (or their respective nominees),
as applicable, will redeem an equal amount of the book-entry interests in that Global Security from the amount received by it in respect of
the redemption of the Global Security. The redemption price payable in connection with the redemption of the book-entry interests will be equal to the amount received by Euroclear, Clearstream or
Depository, as applicable, in connection with the redemption of the Global Security (or any portion thereof). We understand that, under existing practices of Euroclear, Clearstream and the Depository
if fewer than all of the notes are to be redeemed at any time, Euroclear, Clearstream and the Depository will credit their respective participants' accounts on a proportionate basis (with adjustments
to prevent fractions) or by lot or on any other basis that they deem fair and appropriate (including the pool factor); provided, however, that no book-entry interest of less than £100,000
(in the case of the New Sterling Notes) or $2,000 (in the case of the New Dollar Notes) principal amount may be redeemed in part.
Concerning the Trustee
U.S. Bank National Association will be the Trustee under each Indenture.
Governing Law
Each Indenture and the notes will be governed by and construed in accordance with the laws of the State of New York.
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