Exhibit 99.1
OFFER TO PURCHASE AND CONSENT SOLICITATION STATEMENT
RFS PARTNERSHIP, L.P.
RFS 2002 FINANCING, INC.
OFFER TO PURCHASE FOR CASH AND SOLICITATION OF
CONSENTS FOR ANY AND ALL OF ITS OUTSTANDING
9 3/4% SENIOR NOTES DUE 2012
CUSIP NO. 74956MAB6
THE TENDER OFFER AND CONSENT SOLICITATION WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, APRIL 27, 2004, UNLESS EXTENDED BY THE
COMPANY IN ITS SOLE DISCRETION (SUCH TIME AND DATE, AS MAY BE EXTENDED, THE
"EXPIRATION DATE"). IN ADDITION, HOLDERS (AS DEFINED HEREIN) MUST VALIDLY TENDER
AND NOT VALIDLY WITHDRAW THEIR NOTES ON OR PRIOR TO 5:00 P.M., NEW YORK CITY
TIME, ON TUESDAY, APRIL 13, 2004, UNLESS EXTENDED BY THE COMPANY IN ITS SOLE
DISCRETION (SUCH TIME AND DATE, AS MAY BE EXTENDED, THE "EARLY PARTICIPATION
PAYMENT DATE"), TO BE ELIGIBLE TO RECEIVE AN ADDITIONAL PAYMENT OF $30.00 PER
$1,000 PRINCIPAL AMOUNT OF NOTES ACCEPTED FOR PAYMENT IN THE TENDER OFFER (THE
"EARLY PARTICIPATION PAYMENT").
RFS Partnership, L.P. ("RFS LP"), and RFS 2002 Financing, Inc.
("Financing" together with RFS LP, the "Company") hereby offer to purchase for
cash any and all of its outstanding 9 3/4% Senior Notes due 2012 (the "Notes")
for $1,160.00 per $1,000 principal amount of the Notes (the "Total
Consideration"). The Total Consideration includes an early participation payment
of $30.00 per $1,000 principal amount (the "Early Participation Payment") of
Notes payable to Holders (as defined herein) who validly tender the Notes and
validly deliver their Consents (as defined herein) on or prior to the Early
Participation Payment Date (as defined herein). Holders who tender their Notes
after the Early Participation Payment Date and on or prior to the Expiration
Date (as defined herein) will be entitled to receive the Total Consideration
less the Early Participation Payment, or $1,130.00 per $1,000 principal amount
of the Notes (the "Purchase Price"). In addition, accrued and unpaid interest on
such $1,000 principal amount up to, but not including, the day of payment for
(or deposit with Global Bondholder Services Corporation, as Depositary (the
"Depositary"), of an amount sufficient to pay for) Notes accepted for purchase
will be paid. The Notes were issued in an aggregate principal amount of
$125,000,000 in February 2002, of which $79,450,000 (the "Outstanding Amount")
were outstanding as of March 31, 2004.
The offer (the "Tender Offer") is being made upon the terms and subject
to the conditions set forth in this Offer to Purchase and Consent Solicitation
Statement (the "Offer to Purchase") and the accompanying Letter of Transmittal
and Consent (the "Letter of Transmittal" and, together with this Offer to
Purchase, the "Offer Documents"). In conjunction with the Tender Offer, the
Company is soliciting from the Holders of the Notes (the "Consent Solicitation")
consents ("Consents") to proposed amendments to the Indenture (as defined
herein) under which the Notes were issued. THE TENDER OFFER IS NOT CONDITIONED
ON THE RECEIPT OF THE REQUISITE CONSENTS (AS DEFINED HEREIN) OR ON ANY MINIMUM
AMOUNT OF NOTES BEING TENDERED.
Any questions or requests for assistance concerning the Tender Offer
and the Consent Solicitation may be directed to Banc of America Securities LLC
(the "Dealer Manager" and the "Solicitation Agent") at the address and telephone
numbers set forth on the back cover of this Offer to Purchase. Requests for
additional copies of this Offer to Purchase, the Letter of Transmittal or any
other documents may be directed to Global Bondholder Services Corporation (the
"Information Agent" and the "Depositary") at the address and telephone numbers
set forth on the back cover of this Offer to Purchase. Beneficial owners may
also contact their broker, dealer, commercial bank, trust company or other
nominee (each, a "Custodian") for assistance concerning the Tender Offer and the
Consent Solicitation.
The following table summarizes the material pricing terms and dates for
the Purchase Price and the Early Participation Payment:
WITHDRAWAL
DEADLINE AND
OUTSTANDING EARLY EARLY
PRINCIPAL TITLE OF PARTICIPATION EXPIRATION PURCHASE PARTICIPATION TOTAL
CUSIP NO. AMOUNT SECURITY PAYMENT DATE DATE PRICE PAYMENT CONSIDERATION
--------- ------ -------- ------------ ---- ----- ------- -------------
74956MAB6 $79,450,000 9 3/4% 5:00 p.m. 12:00 Midnight $1,130.00 $30.00 $1,160.00
Senior Tuesday Tuesday
Notes April 13, 2004 April 27, 2004
due 2012
NONE OF THE COMPANY, BANC OF AMERICA SECURITIES LLC, THE INFORMATION AGENT
OR THE DEPOSITARY MAKES ANY RECOMMENDATION IN CONNECTION WITH THE TENDER
OFFER OR THE CONSENT SOLICITATION.
-------------------------------------------------------
The Dealer Manager and the Solicitation Agent for the Tender Offer
and Consent Solicitation is:
BANC OF AMERICA SECURITIES LLC
March 31, 2004
Holders of Notes should take note of the following dates in connection with the
Tender Offer and Consent Solicitation:
DATE Calendar Date Event
---- ------------- -----
Early Participation Payment 5:00 p.m., New York City Time, on Tuesday, The last day for Holders to tender Notes
Date April 13, 2004, unless extended by the and deliver Consents in order to qualify
Company in its sole discretion. for the payment of the Total Consideration
which includes the Early Participation
Payment.
Withdrawal Deadline 5:00 p.m., New York City Time, on Tuesday, The last day for Holders towithdraw their tendered
April 13, 2004, unless extended by the Notes and revoke their Consents.
Company in its sole discretion.
Expiration Date 12:00 midnight, New York City Time, on The last day for Holders to tender Notesand
Tuesday, April 27, 2004, unless extended deliver Consents pursuant to the Tender Offer and
by the Company in its sole discretion. Consent Solicitation.
Payment Date In respect of Notes that are validly Payment for all Notes validly tendered on
tendered on or prior to the Expiration or prior to the Expiration Date and not
Date (and not validly withdrawn), promptly validly withdrawn.
after the Expiration Date. The Company
expects that this date will be the
Business Day immediately following the
Expiration Date.
Business Day
Any day, other than Saturday, Sunday or a
federal holiday, and consists of the time
period from 12:01 a.m. through 12:00
midnight, New York City Time.
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GENERAL
In conjunction with the Tender Offer, the Company hereby solicits
Consents to the adoption of certain amendments (the "Proposed Amendments") to
the Indenture, dated as of February 26, 2002, as amended by Supplemental
Indenture dated July 10, 2003 (the "Indenture"), among the Company and US Bank
National Association, as Trustee (the "Trustee"), pursuant to which the Notes
were issued, and to the execution and delivery by the Company and the Trustee of
a second supplemental indenture containing the Proposed Amendments (the
"Supplemental Indenture"). Any Holder (as defined below) who tenders Notes
pursuant to the Tender Offer must also deliver a Consent to the Proposed
Amendments and the execution and delivery of the Supplemental Indenture. Holders
who validly tender their Notes pursuant to the Tender Offer will be deemed to
have delivered their Consents by such tender. Additionally, Holders must tender
their Notes in order to deliver a Consent.
Upon the terms and subject to the Offer Documents, the Company hereby
offers to pay each registered holder of the Notes (each a "Holder" and,
collectively, the "Holders") who validly tenders (and does not validly withdraw)
its Notes and validly delivers (and does not validly revoke) its Consent to the
Proposed Amendments on or prior to the Early Participation Payment Date
(assuming satisfaction or waiver of the conditions of the Tender Offer and
Consent Solicitation described below) an amount in cash equal to the Total
Consideration, which includes the Early Participation Payment. Such Holders are
expected to receive payment of the Total Consideration promptly after the
Expiration Date (which the Company expects will be the next Business Day) if
such Notes are accepted for purchase (the "Payment Date"). Holders who validly
tender their Notes subsequent to the Early Participation Payment Date and on or
prior to the Expiration Date will receive the Purchase Price but will not be
entitled to receive the Early Participation Payment. Payments of the Purchase
Price for such Notes validly tendered after 5:00 p.m., New York City Time, on
the Early Participation Payment Date but prior to 12:00 midnight, New York City
Time, on the Expiration Date, and accepted for purchase are expected to be made
on the Payment Date. In the event that the Tender Offer or the Consent
Solicitation is withdrawn or otherwise not completed, none of the Purchase Price
nor the Early Participation Payment will be paid or become payable.
Tenders of Notes pursuant to the Tender Offer may be validly withdrawn
and Consents delivered pursuant to the Consent Solicitation may be validly
revoked at any time on or prior to the Withdrawal Deadline (but not thereafter)
by following the procedures described herein under the captions "Withdrawal of
Tenders; Revocation of Consents; Absence of Appraisal Rights." A HOLDER MAY NOT
VALIDLY REVOKE A CONSENT UNLESS SUCH HOLDER VALIDLY WITHDRAWS SUCH HOLDER'S
PREVIOUSLY TENDERED NOTES.
The Proposed Amendments require the consent (the "Requisite Consents")
of the Holders of at least a majority of the Outstanding Amount. In the Consent
Solicitation, the Company is seeking Consents to all the Proposed Amendments as
a single proposal. Accordingly, a Consent purporting to consent to only some of
the Proposed Amendments will not be valid and the delivery of a Consent by a
Holder is the delivery of a Consent to all of the Proposed Amendments. If the
Requisite Consents with respect to the Proposed Amendments are obtained by the
Early Participation Payment Date, the Company will execute the Supplemental
Indenture containing the applicable Proposed Amendments promptly after the Early
Participation Payment Date with such Proposed Amendments becoming operative on
the Payment Date. If the Proposed Amendments become effective and operative,
certain restrictive covenants and certain other related provisions of the
Indenture will be amended or eliminated with respect to any Notes that remain
outstanding after the consummation of this Tender Offer. In the event the Notes
are not accepted for purchase by the Company for any reason, the Indenture will
remain in effect in its present form. THE TENDER OFFER IS NOT CONDITIONED UPON
RECEIPT OF REQUISITE CONSENTS FROM HOLDERS OF NOTES TO ADOPT THE PROPOSED
AMENDMENTS.
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The Tender Offer will expire at midnight, Eastern Standard Time, on
Tuesday, April 27, 2004, unless extended (the "Expiration Date"). Holders of
Notes must validly tender Notes on or prior to the Expiration Date to be
eligible to receive the Purchase Price (as defined below) set forth in the table
above. In addition, Holders must validly tender and not validly withdraw their
Notes on or prior to 5:00 p.m., New York City Time, on Tuesday, April, 13, 2004
(the "Early Participation Payment Date") to be eligible to receive an additional
payment of $30 per $1,000 principal amount of Notes accepted for payment in the
Tender Offer (the "Early Participation Payment"). Tenders of Notes may be
withdrawn only on or prior to the Withdrawal Deadline. Holders of Notes who
validly tender and not validly withdraw their Notes after the Early
Participation Payment Date will not be eligible to receive the Early
Participation Payment.
Notwithstanding any other provision of the Tender Offer or the Consent
Solicitation, the Company's obligation to accept for purchase, and to pay for,
any Notes validly tendered and not validly withdrawn pursuant to the Tender
Offer is conditioned upon the General Conditions (as defined herein) having been
satisfied or waived by the Company on or prior to the Expiration Date. The
Company reserves the right to waive any and all conditions of the Tender Offer
and the Consent Solicitation on or prior to the Expiration Date, as the case may
be. See "Conditions of the Tender Offer and Consent Solicitation."
The Company expressly reserves the right, in its sole discretion,
subject to applicable law, to (i) waive any condition to the Tender Offer or the
Consent Solicitation, (ii) amend any of the terms of the Tender Offer or the
Consent Solicitation or (iii) modify the Purchase Price or the Early
Participation Payment provided that in the case of (iii), the Tender Offer will
be extended for 10 business days. The foregoing rights are in addition to the
Company's right to delay acceptance for payment of Notes tendered under the
Tender Offer or the payment for Notes accepted for payment in order to comply in
whole or in part with any applicable law, subject to Rule 14e-l(c) under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), which requires
that an offeror pay the consideration offered or return the securities deposited
by or on behalf of the holders thereof promptly after the termination or
withdrawal of a tender offer.
In the event that the Tender Offer and the Consent Solicitation are
terminated, withdrawn or otherwise not consummated on or prior to the Expiration
Date, neither the Purchase Price nor the Early Participation Payment, as the
case may be, will be paid or become payable to Holders who have validly tendered
(and not validly withdrawn) their Notes in connection with the Tender Offer. In
any such event, the Notes previously tendered pursuant to the Tender Offer will
be promptly returned to the tendering Holders.
SEE "CERTAIN CONSIDERATIONS" AND "MATERIAL UNITED STATES FEDERAL INCOME
TAX CONSIDERATIONS" FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE
CONSIDERED IN EVALUATING THE TENDER OFFER AND THE CONSENT SOLICITATION, AND ALSO
SEE "PROPOSED AMENDMENTS TO THE INDENTURE" AND ANNEX A HERETO FOR A DESCRIPTION
OF THE PROPOSED AMENDMENTS AND THE CONSEQUENCES OF THE ADOPTION THEREOF TO
HOLDERS OF UNPURCHASED NOTES.
THIS OFFER TO PURCHASE CONSTITUTES NEITHER AN OFFER TO PURCHASE NOTES
NOR A SOLICITATION OF CONSENTS IN ANY JURISDICTION IN WHICH, OR TO OR FROM ANY
PERSON TO OR FROM WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR CONSENT
SOLICITATION UNDER APPLICABLE SECURITIES OR "BLUE SKY" LAWS. IN ACCORDANCE WITH
VARIOUS STATE SECURITIES LAWS APPLICABLE TO THIS TENDER OFFER WHICH REQUIRE THIS
TENDER OFFER TO BE MADE TO THE PUBLIC BY A LICENSED BROKER OR DEALER, THIS
TENDER OFFER IS HEREBY MADE TO THE HOLDERS OF NOTES RESIDING IN THOSE STATES BY
THE DEALER MANAGER ON BEHALF OF THE COMPANY. THE DELIVERY OF THIS OFFER TO
PURCHASE SHALL NOT UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THE
INFORMATION CONTAINED HEREIN OR INCORPORATED HEREIN BY REFERENCE IS CORRECT AS
OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR, IN THE CASE OF INFORMATION
INCORPORATED HEREIN BY REFERENCE, SUBSEQUENT TO THE DATE THEREOF, OR THAT THERE
HAS BEEN NO CHANGE IN THE INFORMATION SET FORTH HEREIN OR INCORPORATED HEREIN BY
REFERENCE OR IN ANY ATTACHMENTS HERETO OR IN THE AFFAIRS OF THE COMPANY OR ANY
OF ITS RESPECTIVE SUBSIDIARIES OR AFFILIATES SINCE THE DATE HEREOF.
IMPORTANT INFORMATION
Any Holder desiring to tender Notes pursuant to the Tender Offer and
deliver Consents pursuant to the Consent Solicitation should either: (i) in the
case of a beneficial owner whose Notes are held in book-entry form, request such
beneficial owner's Custodian to effect the transaction for such beneficial
owner; or (ii) in the case of a
iii
Holder who holds physical certificates evidencing such Notes, complete and sign
the accompanying Letter of Transmittal (or a facsimile thereof) in accordance
with the instructions set forth therein, have the signature thereon guaranteed
(if required by Instruction 4 of the Letter of Transmittal), and deliver that
manually signed Letter of Transmittal (or a facsimile thereof), together with
the certificates evidencing the Notes and any other required documents, to the
Depositary. Only registered holders of Notes are entitled to tender Notes and
deliver Consents. A beneficial owner whose Notes are registered in the name of a
Custodian must contact such Custodian if such beneficial owner desires to tender
Notes and/or deliver Consents with respect to Notes so registered. See
"Procedures for Tendering Notes and Delivering Consents."
The Depositary and The Depository Trust Company ("DTC") have confirmed
that the Tender Offer and the Consent Solicitation are eligible for DTC's
Automated Tender Offer Program ("ATOP"). Accordingly, DTC participants may
electronically transmit their acceptance of the Tender Offer and deliver
Consents by causing DTC to transfer their Notes and indicate delivery of their
Consents to the Depositary in accordance with DTC's ATOP procedures for such a
transfer. DTC will then send an Agent's Message (as defined herein) to the
Depositary. Holders desiring to tender their Notes on the Early Participation
Payment Date or the Expiration Date should note that such Holders must allow
sufficient time for completion of the ATOP procedures during normal business
hours of DTC on such respective date. See "Procedures for Tendering Notes and
Delivering Consents."
DOCUMENTS INCORPORATED BY REFERENCE
The following documents have been filed with the Securities and
Exchange Commission (the "Commission") and are incorporated herein by reference:
(a) RFS LP's Annual Report on Form 10-K for the fiscal year ended
December 31, 2003; and
(b) Amendment No. 3 to the RFS LP's Registration Statement on Form S-4,
filed on May 14, 2002.
All documents filed by RFS LP pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Offer to Purchase and prior to
the expiration or termination of this Tender Offer shall be deemed to be
incorporated by reference in this Offer to Purchase and to be a part hereof from
the date of filing such documents.
Any statement contained in this Offer to Purchase or incorporated
herein by reference shall be deemed to be modified or superseded to the extent
that a statement contained in any documents and reports filed by RFS LP pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Offer to Purchase modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Offer to Purchase. Subject to the foregoing, all
information appearing in this Offer to Purchase is qualified in its entirety by
the information appearing in the documents incorporated by reference.
RFS LP will provide without charge to each person to whom this Offer to
Purchase is delivered, upon the request of such person, a copy of any or all the
documents incorporated herein by reference, other than exhibits to such
documents (unless such exhibits are specifically incorporated by reference into
such documents). Requests for such documents should be directed to RFS
Partnership, L.P. c/o CNL Hospitality Properties, Inc., 450 South Orange Avenue,
Orlando, Florida 32801-3336, Attention: Brian Strickland, telephone no. (407)
650-1082. To obtain timely delivery of documents requested, requests for
information must be made no later than five business days prior to the
Expiration Date.
AVAILABLE INFORMATION
RFS LP currently files periodic reports pursuant to the Exchange Act,
in accordance with its obligations under the Indenture, and in accordance
therewith files reports and other information with the Commission. Such reports
and other information filed with the Commission by RFS LP may be inspected and
copied at the public reference facilities maintained by the Commission at Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. Copies of
such material can be obtained at prescribed rates from the Public Reference
Section of the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549. Such material may
iv
also be accessed electronically at the Commission's site on the World Wide Web
located at http://www.sec.gov. Statements made in this Offer to Purchase
concerning the provisions of any contract, agreement, indenture, security
document or other document referred to herein are not necessarily complete. With
respect to each such statement concerning a contract, agreement, indenture,
security document or other document filed with the Commission, reference is made
to such filing for a more complete description of the matter involved, and each
such statement is qualified in its entirety by such reference.
STATEMENT REGARDING FORWARD-LOOKING INFORMATION
The information contained in this Offer to Purchase and in the
documents incorporated by reference are forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. These statements
generally are characterized by the use of terms such as "believe," "expect" and
"may." Although the Company believes that the expectations reflected in such
forward-looking statements are based upon reasonable assumptions, its actual
results could differ materially from those set forth in the forward-looking
statements. Some factors that might cause such a difference include the
following: changes in general economic conditions, changes in local and national
real estate conditions, terrorism, extended U.S. military combat operations,
availability of capital from borrowings under the Company's line of credit and
security agreement, continued availability of proceeds from our offerings, the
Company's ability to obtain additional permanent financing on satisfactory
terms, the Company's ability to continue to identify suitable investments, the
Company's ability to continue to locate suitable managers and tenants for its
properties and borrowers for mortgage loans, and the ability of such tenants and
borrowers to make payments under their respective leases or mortgage loans.
Given these uncertainties, the Company cautions you not to place undue reliance
on such statements, which speak only as of the date thereof. The Company
undertakes no obligation to publicly release the results of any revisions to
these forward-looking statements that may be made to reflect future events or
circumstances or to reflect the occurrence of unanticipated events.
By its terms, the safe harbor for forward-looking statements provided
by the Private Securities Litigation Reform Act of 1995 is not available in the
context of a tender offer.
THIS OFFER TO PURCHASE (INCLUDING THE ANNEX HERETO) AND THE LETTER OF
TRANSMITTAL CONTAIN IMPORTANT INFORMATION THAT SHOULD BE READ BEFORE ANY
DECISION IS MADE WITH RESPECT TO THE TENDER OFFER AND THE CONSENT SOLICITATION.
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH THIS TENDER OFFER
AND CONSENT SOLICITATION, OTHER THAN THOSE CONTAINED IN THIS OFFER TO PURCHASE
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MAY NOT BE RELIED UPON
AS HAVING BEEN AUTHORIZED BY THE COMPANY, THE DEALER MANAGER OR THE SOLICITATION
AGENT.
v
TABLE OF CONTENTS
Page
IMPORTANT INFORMATION.......................................................iii
DOCUMENTS INCORPORATED BY REFERENCE.........................................iv
AVAILABLE INFORMATION........................................................iv
STATEMENT REGARDING FORWARD-LOOKING INFORMATION..............................v
TABLE OF CONTENTS...........................................................vi
SUMMARY......................................................................1
THE COMPANY..................................................................5
PURPOSE AND BACKGROUND OF THE TENDER OFFER AND CONSENT SOLICITATION..........5
DESCRIPTION OF NOTES.........................................................6
CERTAIN CONSIDERATIONS.......................................................6
THE TENDER OFFER AND CONSENT SOLICITATION....................................7
PROPOSED AMENDMENTS TO THE INDENTURE.........................................9
EXPIRATION DATE; EXTENSION; AMENDMENT; TERMINATION..........................10
ACCEPTANCE OF NOTES FOR PURCHASE; PAYMENT FOR NOTES AND CONSENTS;...........11
PROCEDURES FOR TENDERING NOTES AND DELIVERING CONSENTS......................12
WITHDRAWAL OF TENDERS; REVOCATION OF CONSENTS; ABSENCE OF APPRAISAL RIGHTS..15
CONDITIONS OF THE TENDER OFFER AND CONSENT SOLICITATION.....................16
MARKET AND TRADING INFORMATION..............................................18
MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS....................18
DEALER MANAGER; SOLICITATION AGENT INFORMATION AGENT; DEPOSITARY;...........21
MISCELLANEOUS...............................................................22
ANNEX A....................................................................A-1
vi
SUMMARY
The following summary is qualified in its entirely by the more detailed
information appearing elsewhere or incorporated by reference in this Offer to
Purchase, including the Annex hereto. Initially capitalized terms not otherwise
defined in this summary have the meanings assigned to them elsewhere in this
Offer to Purchase.
The Company..................................... RFS Partnership, L.P. and RFS 2002 Financing, Inc.
(collectively, the "Company")
The Notes....................................... 9 3/4% Senior Notes due 2012.
The Tender Offer ............................... The Company is offering to purchase for cash from each Holder,
upon the terms and subject to the conditions set forth in the
Offer Documents, any and all of its outstanding Notes validly
tendered and not validly withdrawn on or prior to the
Expiration Date. See "The Tender Offer and Consent
Solicitation."
The Consent Solicitation........................ In conjunction with the Tender Offer, the Company is
soliciting Consents from the Holders of Notes to the Proposed
Amendments and the execution and delivery of the Supplemental
Indenture. Any Holder who wants to tender Notes pursuant to
the Tender Offer also must deliver a Consent to the Proposed
Amendments and the execution and delivery of the Supplemental
Indenture. Holders who validly tender (and do not validly
withdraw) their Notes pursuant to the Tender Offer will be
deemed to have delivered their Consents by such tender. See
"The Tender Offer and Consent Solicitation."
Total Consideration............................. The Total Consideration for each $1,000 principal amount of
Notes validly tendered (and not validly withdrawn) and
accepted for payment pursuant to the Tender Offer and valid
delivery of Consents (which are not validly revoked) on or
prior to the Early Participation Payment Date shall be
$1,160.00, payable in cash, which equals the sum of the Early
Participation Payment and the Purchase Price. In addition,
each Holder will receive accrued and unpaid interest on such
$1,000 principal amount up to, but not including, the Payment
Date.
Early Participation Payment..................... Holders who validly tender (and do not validly withdraw) their
Notes and validly deliver (and do not validly revoke) Consents
on or prior to the Early Participation Payment Date shall be
entitled to an Early Participation Payment equal to $30.00 for
each $1,000 principal amount of their Notes validly tendered
pursuant to the Tender Offer, which amount is included in the
Total Consideration.
Purchase Price.................................. The Total Consideration minus the Early Participation Payment
is referred to as the Purchase Price, which is equal to
$1,130.00 per $1,000 principal amount of the Notes. Holders
who validly tender their Notes and validly deliver Consents
after the Early Participation Payment Date and on or prior to
the Expiration Date will receive the Purchase Price, but will
not be entitled to the Early Participation Payment.
1
Early Participation Payment Date................ The Early Participation Payment Date is 5:00 p.m., New York
City Time, on Tuesday, April 13, 2004, unless extended by the
Company in its sole discretion. The term "Early Participation
Payment Date" means such time and date or, if the date is
extended, the latest time and date to which so extended. See
"Expiration Date; Extension; Amendment; Termination."
Withdrawal Deadline............................. The Withdrawal Deadline is 5:00 p.m., New York City Time, on
Tuesday, April 13, 2004, unless extended by the Company in its
sole discretion.
Expiration Date................................. The Tender Offer and Consent Solicitation will expire at 12:00
midnight, New York City Time, on Tuesday, April 27, 2004,
unless extended by the Company in its sole discretion. The
term "Expiration Date" means such time and date or, if the
Tender Offer and Consent Solicitation is extended, the latest
time and date to which the Tender Offer and Consent
Solicitation is so extended. See "Expiration Date; Extension;
Amendment; Termination."
Purposes and Background of The principal purpose of the Tender Offer and the Consent
the Tender Offer and Consent Solicitation is to acquire all outstanding Notes and eliminate
Solicitation.................................... substantially all of the covenants of the Indenture. See
"Purpose and Background of the Tender Offer and Consent
Solicitation."
The Proposed Amendments......................... The Proposed Amendments would amend or eliminate substantially
all of the restrictive covenants and certain other related
provisions of the Indenture. For a brief description of the
Proposed Amendments to the Indenture for which Consents are
being sought pursuant to the Consent Solicitation, See
"Proposed Amendments to the Indenture." The Proposed
Amendments are set forth in Annex A attached hereto.
Requisite Consents.............................. The Proposed Amendments to the Indenture require the Consent
of the Holders of a majority in aggregate principal amount of
the Outstanding Amount.
Conditions to the Tender Offer and Consent Consummation of the Tender Offer and Consent Solicitation is
Solicitation.................................... conditioned upon satisfaction of the certain conditions
referred to as the General Conditions. The Company reserves
the right, in its sole discretion, to waive any and all
conditions of the Tender Offer and the Consent Solicitation
on or prior to the Expiration Date. The Tender Offer is not
conditioned on the receipt of the Requisite Consents or on
any minimum amount of Notes being tendered. See "Conditions
of the Tender Offer and Consent Solicitation."
Withdrawal Rights and Tenders of Notes pursuant to the Tender Offer may be withdrawn
Revocation of Consents.......................... and Consents delivered pursuant to the Consent Solicitation
may be validly revoked at any time on or prior to the
Withdrawal Deadline by following the procedures described
herein under the captions "Withdrawal of Tenders; Revocation
of Consents; Absence of Appraisal Rights." A valid
withdrawal of tendered Notes on or prior to the Withdrawal
Deadline shall
2
be deemed a valid revocation of the related Consent. A
HOLDER MAY NOT VALIDLY REVOKE A CONSENT UNLESS SUCH HOLDER
VALIDLY WITHDRAWS SUCH HOLDER'S PREVIOUSLY TENDERED NOTES.
ANY NOTES TENDERED AND CONSENTS DELIVERED THAT ARE NOT
VALIDLY WITHDRAWN OR REVOKED ON OR PRIOR TO THE WITHDRAWAL
DEADLINE MAY NOT BE WITHDRAWN OR REVOKED THEREAFTER.
The Supplemental Indenture...................... The Company intends to execute and deliver the Supplemental
Indenture containing the Proposed Amendments on the earlier of
the Early Participation Payment Date or the Payment Date,
provided that the Requisite Consents have then been obtained.
The Supplemental Indenture will become effective upon
execution by the Company and the Trustee, with the Proposed
Amendments becoming operative on the Payment Date. In the
event the Notes are not accepted for purchase by the Company
for any reason, the Indenture will remain in effect in its
present form.
Effect of Proposed Any Notes not tendered and purchased pursuant to the Tender
Amendments on Offer will remain outstanding. If the Requisite Consents are
Unpurchased Notes............................... received with respect to the Proposed Amendments and such
Proposed Amendments become operative, such Notes that are
not purchased pursuant to the Tender Offer will not have the
benefits of the covenants and certain other related
provisions that will be amended or eliminated from the
Indenture by the Proposed Amendments. See "Certain
Considerations - Effect of the Proposed Amendments on
Unpurchased Notes."
As a result of the consummation of the Tender Offer and the
Consent Solicitation, the aggregate principal amount of
Notes that remains outstanding is expected to be
significantly reduced, which may adversely affect the
liquidity and, consequently, the market prices for Notes, if
any, that remain outstanding after consummation of the
Tender Offer and the Consent Solicitation. See "Certain
Considerations - Limited Trading Market."
Procedures for Tendering Any Holder desiring to tender Notes pursuant to the Tender
Notes and Delivering Offer and deliver Consents pursuant to the Consent
Consents........................................ Solicitation should contact their Custodian if such beneficial
owner desires to tender Notes and deliver Consents with
respect to Notes so registered. Only registered holders of
Notes are entitled to tender Notes and deliver Consents. A
beneficial owner whose Notes are registered in the name of a
Custodian must contact such Custodian if such beneficial
owner desires to tender Notes and deliver Consents with
respect to such registered Notes. DTC participants may
electronically transmit their acceptance and the tender
offer by causing DTC to transfer their Notes to the
Depositary in accordance with DTC's ATOP procedures for such
a transfer. In addition, DTC participants may deliver their
Consents as part of the electronic transmission of their
acceptance of the Tender Offer. See "Procedures for
Tendering Notes and Delivering Consents."
3
Acceptance of Tendered Upon the terms of the Tender Offer and the Consent
Notes and Payment............................... Solicitation and upon satisfaction or waiver of the conditions
thereto, the Company will accept no later than the
Expiration Date for purchase all Notes validly tendered (or
defectively tendered, if such defect has been waived by the
Company) and not validly withdrawn and for which no
withdrawal rights then exist.
Provided that the conditions to the Tender Offer have been
satisfied or waived, payment for Notes purchased in the
Tender Offer, together with accrued and unpaid interest up
to (but not including) the date of payment for such Notes to
the Holders, shall be made on the Payment Date. Holders of
Notes that have been accepted by the Company by the Early
Participation Payment Date shall receive payment therefor on
the Payment Date. Such payment shall be the Total
Consideration which shall include both the Purchase Price
and the Early Participation Payment. Holders of Notes that
have been accepted by the Company following the Early
Participation Payment Date, but on or prior to the
Expiration Date, shall be entitled to receive the Purchase
Price only, and shall receive payment therefor on the
Payment Date. The Payment Date is expected to be the
Business Day immediately following the Expiration Date.
The Company reserves the right to accept for purchase and
pay for all Notes validly tendered on or prior to the
Expiration Date and to keep the Tender Offer open or extend
the Early Participation Payment Date, the Withdrawal
Deadline and/or the Expiration Date to a later date and time
announced by the Company and may waive all conditions to the
Tender Offer (other than proper tender) for Notes tendered
on or prior to the Expiration Date. See "Acceptance of Notes
for Purchase; Payment for Notes and Consents."
Material United States For a discussion of United States federal income tax
Federal Income Tax considerations of the Tender Offer and the Consent
Considerations.................................. Solicitation applicable to Holders of Notes, see "Material
United States Federal Income Tax Considerations."
Certain Considerations.......................... For a discussion of certain considerations in deciding whether
to participate in the Tender Offer and the Consent
Solicitation, see "Certain Considerations."
Dealer Manager and
Solicitation Agent.............................. Banc of America Securities LLC.
Information Agent and Depositary................ Global Bondholder Services Corporation.
4
THE COMPANY
RFS LP is a Tennessee limited partnership. Financing is a Tennessee
corporation and a wholly owned subsidiary of RFS LP, and was formed to
facilitate the issuance of the Notes. On July 10, 2003, RFS Hotel Investors,
Inc. ("RFS"), the former parent of the Company and the Company, were acquired by
subsidiaries of CNL Hospitality Properties, Inc. ("CNL"). Pursuant to the
acquisition, RFS was merged with and into a subsidiary of CNL and RFS ceased to
exist as a separate corporate entity. Further, pursuant to the acquisition, a
subsidiary of CNL was merged with and into the Company and the Company continues
to exist as separate entities and as wholly owned indirect subsidiaries of CNL.
As of December 31, 2003, the Company owns interests in 62 hotels with
9,399 rooms in 26 states at December 31, 2003. All but two of the Company's
hotels operated under franchises from nationally recognized franchisors such as
Marriott International, Inc., Hilton Hotels Corporation, Starwood Hotels &
Resorts, Inc., Wyndham Hotels and Resorts and Six Continents PLC.
At December 31, 2003, the Company leased seven hotels to three
third-party lessees and three hotels to taxable Real Estate Investment Trust
subsidiaries owned by CNL, but not owned by the Company. At such time, thirteen
hotels were managed by Hilton Hotels Corporation, ten hotels were managed by
Marriott International, 28 hotels were managed by Interstate Hotels and Resorts,
and eleven other hotels were managed by six other independent management
companies. On January 31, 2004, the management of five hotels was transferred
from Interstate to Hilton (two hotels) and Marriott (three hotels).
Although the Company is a wholly owned, indirect subsidiary of CNL,
CNL does not have any obligations under the Notes or the Indenture.
PURPOSE AND BACKGROUND OF THE TENDER OFFER
AND CONSENT SOLICITATION
The principal purpose of the Tender Offer and the Consent Solicitation
is to acquire all of the outstanding Notes and eliminate substantially all of
the covenants and certain events of default and amend certain related provisions
of the Indenture.
The total amount of funds required to purchase all of the Notes sought
pursuant to the Tender Offer, to pay all accrued and unpaid interest on the
Notes, and to pay all fees and expenses in connection therewith is expected to
be approximately $95 million, assuming all outstanding Notes are validly
tendered on or prior to the Early Participation Payment Date. The Company
intends to obtain these funds from borrowings, in the form of debt financing,
from its parent, CNL Hospitality Properties, Inc., on or prior to the Payment
Date. CNL Hospitality Properties, Inc. may subsequently obtain funds by
accessing the debt and/or equity capital markets.
The Company is not making any recommendation to the Holders as to
whether to tender or refrain from tendering all or any portion of the Notes or
as to whether the Holders should furnish the requested Consent or withhold such
Consent with respect to all or any portion of such Holders' Notes. Each Holder
must decide whether to tender Notes or furnish or withhold Consents, and if
tendering, the amount of Notes to tender. The Holders are urged to carefully
review all of the information contained or incorporated by reference in this
Offer to Purchase and Consent Solicitation.
5
DESCRIPTION OF NOTES
The Notes were issued pursuant to the Indenture between the Company and
the Trustee. The terms of the Notes are those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"). The Notes are subject to all such terms and
the Holders of the Notes are referred to the Indenture and the Trust Indenture
Act for a statement thereof. Copies of the Indenture are available from the
Information Agent at the address and telephone numbers set forth on the back
cover of this Offer to Purchase.
The Notes were issued in February 2002 in an original aggregate
principal amount of $125,000,000, $79,450,000 of which remained outstanding as
of March 31, 2004. Interest on the Notes is payable semiannually, on each March
1 and September 1 to the persons in whose names the Notes are registered at the
close of business on the February 15 and August 15 prior to the payment date, at
an annual rate of 9 3/4%.
At any time prior to March 1, 2007 and at the option of the Company,
the Notes are redeemable, in whole or in part, in cash, at a redemption price
equal to the greater of (i) 104.875% of the principal amount of the Notes so
redeemed, plus accrued and unpaid interest (and Liquidated Damages, if any (as
defined in the Indenture) and (ii) the "Make-Whole Premium" (as defined below),
plus to the extent not included in the Make-Whole Premium, accrued and unpaid
interest (and Liquidated Damages, if any) to, but not including, the redemption
date. The Make-Whole Premium is the sum of the present values of the remaining
scheduled payments of interest, principal and premium on the Notes (not
including any portion of such payments of interest accrued as of the date of
redemption) as if the Notes were redeemed on March 1, 2007 pursuant to Section
3.7 of the Indenture on such date, discounted to the redemption date on a
semiannual basis at the Treasury Rate (as defined in the Indenture) plus 50
basis points.
At any time on or after March 1, 2007 and at the option of the
Company, the Notes are redeemable in whole or in part, for cash at the following
redemption prices (expressed as percentages of the principal amount) if redeemed
during the 12-month period commencing March 1 of the years indicated below, in
each case together with accrued and unpaid interest (and Liquidated Damages, if
any) as follows:
YEAR PERCENTAGE
---- ----------
2007 104.875%
2008 103.250%
2009 101.625%
2010 and thereafter 100.000%
For a list of certain of the covenants contained in the Indenture, see
"Proposed Amendments to the Indenture."
CERTAIN CONSIDERATIONS
IN DECIDING WHETHER TO PARTICIPATE IN THE TENDER OFFER AND THE CONSENT
SOLICITATION, EACH HOLDER SHOULD CONSIDER CAREFULLY, IN ADDITION TO THE OTHER
INFORMATION CONTAINED OR INCORPORATED BY REFERENCE IN THIS OFFER TO PURCHASE,
THE FOLLOWING:
LIMITED TRADING MARKET
To the extent that Notes are traded, prices for the Notes may fluctuate
greatly depending on the trading volume and the balance between buy and sell
orders. In addition, quotations for securities that are not widely traded, such
as the Notes, may differ from actual trading prices and should be viewed as
approximations. Holders of Notes are urged to contact their brokers to obtain
the best available information as to current market prices. To the extent that
Notes are tendered and accepted in the Tender Offer, the trading market for the
Notes would become more limited. A debt security with a smaller outstanding
principal amount available for trading (a smaller "float") may command a lower
price than would a comparable debt security with a greater float. Therefore, the
market price for Notes not tendered or not purchased may be affected adversely
to the extent that the principal amount of Notes
6
tendered pursuant to the Tender Offer reduces the float. The reduced float may
also tend to make the trading price more volatile. Holders of Notes not tendered
or not purchased may attempt to obtain quotations for their Notes from their
brokers; however, there can be no assurance that any trading market will exist
for the Notes following consummation of the Tender Offer. The extent of the
public market for the Notes following consummation of the Tender Offer will
depend upon, among other things, the remaining outstanding principal amount of
Notes after the Tender Offer, the number of Holders of such Notes remaining at
such time and the interest in maintaining a market in the Notes on the part of
securities firms and other factors. The Company does not intend to create or
sustain a market for any Notes that remain outstanding following consummation of
the Tender Offer.
EFFECT OF THE PROPOSED AMENDMENTS ON UNPURCHASED NOTES
If the Tender Offer is consummated and the Proposed Amendments become
operative, Holders of Notes that are not purchased pursuant to the Tender Offer
for any reason will no longer be entitled to the benefits of certain covenants,
and certain other provisions of the Indenture after such provisions have been
eliminated by such Proposed Amendments. The Proposed Amendments to the Indenture
would delete most restrictive provisions, including, without limitation,
covenants relating to the Company's ability to incur indebtedness, suffer liens,
pay dividends, merge or consolidate with another entity, make payments or other
distributions to Affiliates, and take other actions that would otherwise be
restricted under the Indenture. See "Annex A-The Proposed Amendments." The
elimination of the foregoing provisions would permit the Company to take actions
that could increase the credit risks faced by the Holders of any remaining
Notes, adversely affect the market price of such Notes or otherwise be adverse
to the interests of the Holders of such remaining Notes.
The Proposed Amendments will not relieve the Company from its
obligation to make scheduled payments of principal and accrued interest on the
Notes not purchased pursuant to the Tender Offer in accordance with the terms of
the Indenture as currently in effect. Although it is anticipated that the
Company will be subject to restrictive covenants contained in other agreements,
Holders whose Notes are not purchased in the Tender Offer will not be able to
enforce these other covenants and such other covenants will be subject to change
without the consent of such Holders.
THE TENDER OFFER AND CONSENT SOLICITATION ARE SUBJECT TO CERTAIN CONDITIONS
The consummation of the Tender Offer and Consent Solicitation is
subject to the satisfaction of several conditions. See "Conditions to Tender
Offer and the Consent Solicitation." There can be no assurance that such
conditions will be met or that, in the event the Tender Offer or Consent
Solicitation is not consummated, the market value and liquidity of the
applicable Notes will not be materially adversely affected.
PRICING OF THE NOTES
Neither the Purchase Price nor the Early Participation Payment reflects
an independent valuation of the Notes and does not take into account events or
changes in financial markets (including interest rates) after the commencement
of the Tender Offer.
The Company has not obtained or requested a fairness opinion from any
banking or other firm as to the fairness of the Purchase Price or Early
Participation Payment. If you tender your Notes, you may or may not receive more
or as much value than if you choose to keep them.
THE TENDER OFFER AND CONSENT SOLICITATION
THE OFFER DOCUMENTS CONTAIN IMPORTANT INFORMATION THAT SHOULD BE READ
CAREFULLY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE TENDER OFFER AND THE
CONSENT SOLICITATION.
INTRODUCTION
The Company hereby offers, upon the terms and subject to the conditions
set forth in the Offer Documents, to purchase for cash any and all of the
outstanding Notes that are validly tendered (and not validly withdrawn) to the
7
Depositary on or prior to the Expiration Date for the consideration as described
below. The Company will accept tenders of Notes in principal amounts of $1,000
or integral multiples thereof.
TOTAL CONSIDERATION AND PURCHASE PRICE
The Total Consideration for each $1,000 principal amount of Notes
validly tendered (and not validly withdrawn) and accepted for payment pursuant
to the Tender Offer on or prior to the Early Participation Payment Date shall be
$1,160.00 payable in cash. The Total Consideration includes an Early
Participation Payment of $30.00 per $1,000 principal amount of Notes payable
only to Holders who tender their Notes and deliver Consents on or prior to the
Early Participation Payment Date. The Purchase Price for each $1,000 principal
amount of Notes being tendered pursuant to the Tender Offer will equal the Total
Consideration minus the Early Participation Payment, or $1,130.00 per $1,000
principal amount of Notes. In addition, each Holder will receive accrued and
unpaid interest on such $1,000 principal amount up to, but not including, the
Payment Date.
Upon the terms and subject to the conditions set forth in the Offer to
Purchase, the Company will pay the Total Consideration to Holders who validly
tender their (and do not validly withdraw) Notes and deliver (and do not validly
revoke) Consents on or prior to the Early Participation Payment Date. Tendering
Holders are expected to receive such payment on the Payment Date. Holders who
validly tender their Notes and deliver Consents after the Early Participation
Payment Date and on or prior to the Expiration Date will receive the Purchase
Price on the Payment Date. Company will also pay all accrued and unpaid interest
up to, but not including, the Payment Date.
Payment for Notes validly tendered (and not validly withdrawn) and
accepted for payment will be made by the deposit of immediately available funds
by the Company with the Depositary. The Depositary will act as agent for the
tendering Holders for the purpose of receiving payments from the Company and
transmitting such payments to Holders.
EARLY PARTICIPATION PAYMENT
The Company will make Early Participation Payments in cash equal to
$30.00 for each $1,000 principal amount of Notes which have been validly
delivered (and not validly withdrawn) to the Depositary on or prior to the Early
Participation Payment Date. Holders who desire to tender their Notes pursuant to
the Tender Offer and receive the Total Consideration (i.e., the Purchase Price
and the Early Participation Payment) are required to deliver Consents to the
Proposed Amendments. If a Holder's Notes are not validly tendered pursuant to
the Tender Offer on or prior to the Early Participation Payment Date or such
Holder's Consent either is not validly delivered, or is validly revoked and not
validly redelivered, on or prior to the Withdrawal Deadline, such Holder will
not receive an Early Participation Payment, even though, assuming the Requisite
Consents are obtained and the Supplemental Indenture is executed, the Proposed
Amendments become effective and operative as to any of such Holder's Notes that
are not purchased in the Tender Offer. See "Proposed Amendments to the
Indenture."
THE PURCHASE PRICE AND THE EARLY PARTICIPATION PAYMENT WILL BE PAID ON
THE PAYMENT DATE ASSUMING THE NOTES ARE ACCEPTED FOR PURCHASE AND THE CONDITIONS
OF THE TENDER OFFER AND CONSENT SOLICITATION HAVE BEEN SATISFIED OR WAIVED AS OF
THE EXPIRATION DATE. HOLDERS WHO VALIDLY TENDER THEIR NOTES AND DELIVER CONSENTS
AFTER THE EARLY PARTICIPATION PAYMENT DATE WILL RECEIVE THE PURCHASE PRICE, BUT
ARE NOT ENTITLED TO RECEIVE THE EARLY PARTICIPATION PAYMENT.
Tenders of Notes may be validly withdrawn and Consents delivered
pursuant to the Consent Solicitation may be validly revoked, at any time on or
prior to the Withdrawal Deadline by following the procedures described herein. A
Holder may not validly revoke a Consent unless such Holder validly withdraws
such Holder's previously tendered Notes and the valid withdrawal of a Holder's
previously tendered Notes will constitute the concurrent valid revocation of
such Holder's Consent. Any Notes tendered and Consents delivered that are not
validly withdrawn or revoked on or prior to the Withdrawal Deadline may not be
withdrawn or revoked thereafter. A Holder who validly withdraws previously
tendered Notes will not receive the Purchase Price or an Early Participation
Payment, unless such Notes are re-tendered on or prior to the Early
Participation Payment Date (in which case the Holder will receive the Total
Consideration) or on or prior to the Expiration Date (in which case the Holder
will be entitled to receive the Purchase Price only).
8
The Company has reserved the right to extend, amend or terminate the
Tender Offer and the Consent Solicitation. See "Expiration Date; Extension;
Amendment; Termination."
PROPOSED AMENDMENTS TO THE INDENTURE
The Company is soliciting the Consents of the Holders to the Proposed
Amendments substantially in the form of Annex A hereto and to the execution and
delivery by the Company of the Supplemental Indenture to effect the Proposed
Amendments. All statements herein regarding the substance of any provision of
the Proposed Amendments and the Indenture are qualified in their entirety by
reference to the language set forth in Annex A and to the Indenture. Initially
capitalized terms used below that are not otherwise defined herein shall have
the meanings assigned to them in the Indenture. Copies of the Indenture are
available upon request from the Information Agent at the address and telephone
number set forth on the back cover of this Offer to Purchase.
DELETION OF COVENANTS IN THE INDENTURE. If the Proposed Amendments
become operative, the restrictive covenants and the events of defaults set forth
below will be deleted from the Indenture, as well as the Events of Defaults
relating to such covenants. The Proposed Amendments may also delete those
definitions from the Indenture that are used only in provisions that would be
eliminated as a result of the elimination of the following provisions and
cross-references to provisions in the Indenture that have been deleted as a
result of the Proposed Amendments will be revised to reflect such deletions.
IF THE REQUISITE CONSENTS ARE RECEIVED FROM AT LEAST THE HOLDERS OF A
MAJORITY OF THE OUTSTANDING AMOUNT, THE FOLLOWING SECTIONS OF THE INDENTURE WILL
BE ELIMINATED:
Section 4.3. SEC Reports, and Reports to Holders;
Section 4.4 Compliance Certificate
Section 4.5 Taxes;
Section 4.7. Limitation on Incurrence of Additional Indebtedness and
Disqualified Capital Stock;
Section 4.8 Limitation on Liens;
Section 4.9 Limitation on Restricted Payments;
Section 4.10. Limitation on Dividends and Other Payment Restrictions Affecting
Subsidiaries;
Section 4.11 Limitations on Lines of Business;
Section 4.12. Limitation on Transactions with Affiliates;
Section 4.15 Limitation on Issuances of Guarantees by Subsidiaries;
Section 4.16 Limitation on Layering Indebtness;
Section 4.17 Restriction on Activities of Finance;
Section 4.18 Limitation on Status as Investment Company;
Section 4.19 Maintenance of Properties and Insurance;
Section 4.20 Corporate Existence;
9
Section 5.1. Merger, Consolidation or Sale of Assets;
Section 5.2. Successor Corporation Substituted; and
Section 6.1(3), Events of Default.
Section 6.1(4),
Section 6.1(5),
Section 6.1(6),
Section 6.1(7),
Section 6.1(8)
GENERAL
The Proposed Amendments will be set forth in the Supplemental
Indenture. The Supplemental Indenture will be executed by the Company and the
Trustee on the earlier of the Early Participation Payment Date or the Payment
Date, provided that on such date the Requisite Consents have been obtained.
Pursuant to the terms of the Indenture, the Proposed Amendments require the
Consent of the Holders of a majority in aggregate principal amount of the
Outstanding Amount. The Supplemental Indenture will become effective upon
execution by the Company and the Trustee, but will provide that the applicable
Proposed Amendments will not become operative until the Payment Date. The
Indenture will remain in effect, without giving effect to any of the Proposed
Amendments, until any such Proposed Amendments become operative on the Payment
Date. The Proposed Amendments are being presented as one proposal. Consequently,
the delivery of a Consent by a Holder is the delivery of a Consent to all of the
Proposed Amendments and a Consent purporting to consent to only some of the
Proposed Amendments will not be valid. The Tender Offer is not conditioned on
the receipt of the Requisite Consents.
IF THE SUPPLEMENTAL INDENTURE IS EXECUTED AND THE PROPOSED AMENDMENTS
BECOME OPERATIVE, THE HOLDERS OF NOTES THAT ARE NOT PURCHASED FOR ANY REASON
WILL BE BOUND THEREBY EVEN THOUGH THEY HAVE NOT CONSENTED TO SUCH PROPOSED
AMENDMENTS. SEE "CERTAIN CONSIDERATIONS."
EXPIRATION DATE; EXTENSION; AMENDMENT; TERMINATION
The Tender Offer and Consent Solicitation will expire at 12:00
midnight, New York City Time, on Tuesday, April 27, 2004, unless extended by the
Company in its sole discretion. The Early Participation Payment Date will expire
at 5:00 p.m., New York City Time, on Tuesday, April 13, 2004 unless extended by
the Company in its sole discretion. In the event the Tender Offer and the
Consent Solicitation are extended, the terms "Expiration Date" and "Expiration"
with respect to such extended Tender Offer and Consent Solicitation shall mean
the time and date on which the Tender Offer and the Consent Solicitation, as so
extended, shall expire. The Company expressly reserves the right to extend the
Tender Offer, the Consent Solicitation and/or the Early Participation Payment
Date from time to time or for such period or periods as it may determine in its
sole discretion by giving oral (to be confirmed in writing) or written notice of
such extension to the Depositary and by making a public announcement by press
release to the Dow Jones News Service at or prior to 9:00 a.m., New York City
Time, on the next business day following the previously scheduled Early
Participation Payment Date or Expiration Date, as the case may be. During any
extension of the Tender Offer, all Notes previously tendered and not accepted
for purchase will remain subject to the Tender Offer and may, subject to the
terms and conditions of the Tender Offer, be accepted for purchase by the
Company. During any extension of the Consent Solicitation, all Consents validly
delivered to the Depositary will remain effective unless validly revoked on or
prior to such Expiration. In the event that the term "Early Participation
Payment Date" is extended, the Early Participation Payment Date with respect to
the Tender Offer and the Consent Solicitation will mean the time and date on
which the Early Participation Payment Date, as so extended, shall expire.
To the extent it is legally permitted to do so, the Company expressly
reserves the absolute right, in its sole discretion, to at any time (i) waive
any condition to the Tender Offer or the Consent Solicitation, (ii) amend any of
the terms of the Tender Offer or the Consent Solicitation or (iii) modify the
Purchase Price or the Early Participation Payment, provided that in the case of
(iii), the Tender Offer will be extended for 10 business days. Any waiver,
10
amendment or modification of the Tender Offer or the Consent Solicitation will
apply to all Notes tendered pursuant to the Tender Offer. If the Company makes a
material change in the terms of the Tender Offer or waives a material condition
of the Tender Offer, the Company will give oral (to be confirmed in writing) or
written notice of such amendment or such waiver to the Depositary and will
disseminate additional Offer Documents and will extend the Tender Offer to the
extent required by law. If the Consent Solicitation is amended on or prior to
the Expiration Date in a manner determined by the Company to constitute a
material change to Holders of the Notes, the Company will promptly give oral (to
be confirmed in writing) or written notice of such amendment to the Depositary,
disseminate additional Consent Solicitation materials and, if necessary, extend
the Consent Solicitation for a period deemed by the Company to be adequate to
permit Holders of the Notes to deliver or revoke their Consents. If any such
amendment occurs after the Early Participation Payment Date, the Company may
terminate the Supplemental Indenture, if executed, and the Company may solicit
Consents for a revised supplemental indenture.
In the event that the Tender Offer and the Consent Solicitation are
withdrawn or otherwise not completed, the Purchase Price and Early Participation
Payment will not be paid or become payable. See "Withdrawal of Tenders;
Revocation of Consents; Absence of Appraisal Rights" and "Conditions of the
Tender Offer and Consent Solicitation."
ACCEPTANCE OF NOTES FOR PURCHASE;
PAYMENT FOR NOTES AND CONSENTS
Upon the terms and subject to the conditions of the Tender Offer, the
Company will accept for purchase, no later than the Expiration Date, Notes
validly tendered pursuant to the Tender Offer (or defectively tendered, if such
defect has been waived by the Company) and not validly withdrawn upon the
satisfaction or waiver of the conditions to the Tender Offer specified herein
under "Conditions of the Tender Offer and Consent Solicitation." The Company
will pay for Notes accepted on the Payment Date. The Company reserves the right
to accept for purchase and pay for all Notes validly tendered on or prior to the
Expiration Date and to keep the Tender Offer open or extend the Expiration Date
to a later date and time announced by the Company.
The Company expressly reserves the right, in its sole discretion, to
delay acceptance for purchase of Notes tendered under the Tender Offer or the
payment for Notes accepted for purchase (subject to Rule 14e-1(c) under the
Exchange Act, which requires that an offeror pay the consideration offered or
return the securities deposited by or on behalf of the Holders thereof promptly
after the termination or withdrawal of a tender offer), or to terminate the
Tender Offer and not accept for purchase any Notes not theretofore accepted for
purchase, if any of the conditions set forth under "Conditions of the Tender
Offer and Consent Solicitation" shall not have been satisfied or waived by the
Company or in order to comply in whole or in part with any applicable law. In
all cases, payment for Notes accepted for purchase pursuant to the Tender Offer
will be made only on the Payment Date after timely receipt by the Depositary of
certificates representing the Notes (or confirmation of book-entry transfer
thereof), a properly completed and duly executed Letter of Transmittal related
thereto (or a facsimile thereof or satisfaction of DTC's ATOP procedures) and
any other documents required thereby.
For purposes of the Tender Offer, the Company will be deemed to have
accepted for purchase validly tendered Notes (or defectively tendered Notes, if
such defect has been waived by the Company) if, as and when the Company gives
oral (confirmed in writing) or written notice thereof to the Depositary. Payment
for Notes accepted for purchase in the Tender Offer will be made by the Company
by depositing such payment with the Depositary, which will act as agent for the
tendering and consenting Holders for the purpose of receiving the Purchase Price
and the Early Participation Payment, if any, and transmitting such Purchase
Price and Early Participation Payment (and accrued and unpaid interest up to,
but not including, the Payment Date) to such Holders. Upon the terms and subject
to the conditions of the Tender Offer, delivery by the Depositary of the
Purchase Price shall be made on the Payment Date for Notes that have been
validly delivered and not validly withdrawn.
Tenders of Notes and delivery of Consents pursuant to the Tender Offer
and the Consent Solicitation will be accepted only in principal amounts equal to
$1,000 or any integral multiple thereof.
If, for any reason, acceptance for purchase of, or payment for, validly
tendered Notes pursuant to the Tender Offer is delayed or the Company is unable
to accept for purchase, or to pay for, validly tendered Notes pursuant to the
Tender Offer, then the Depositary may, nevertheless, on behalf of the Company,
retain tendered
11
Notes, without prejudice to the rights of the Company described under
"Expiration Date; Extension; Amendment; Termination," "Conditions of the Tender
Offer and Consent Solicitation" and "Withdrawal of Tenders; Revocation of
Consents; Absence of Appraisal Rights" (subject to Rule 14e-1(c) under the
Exchange Act, which requires that an offeror pay the consideration offered or
return the securities deposited by or on behalf of the Holders thereof promptly
after the termination or withdrawal of a tender offer).
If any tendered Notes are not accepted for purchase for any reason
pursuant to the terms and conditions of the Tender Offer, or if certificates are
submitted evidencing more Notes than those which are tendered, certificates
evidencing unpurchased Notes will be returned, without expense, to the tendering
Holder, unless otherwise requested by such Holder under "Special Delivery
Instructions" in the Letter of Transmittal (or, in the case of any Notes
tendered by book-entry transfer into the Depositary's account at the Book-Entry
Transfer Facility (as defined below) pursuant to the procedures set forth under
the caption "Procedures for Tendering Notes and Delivering Consents-Book-Entry
Transfer," such Notes will be credited to the account maintained at the
Book-Entry Transfer Facility from which such Notes were delivered), promptly
following the Expiration Date or the termination of the Tender Offer.
The Company reserves the right to transfer or assign, in whole or from
time to time in part, to one or more of its respective affiliates, the right to
purchase all or any portion of the Notes tendered pursuant to the Tender Offer,
but any such transfer or assignment will not relieve the Company of its
obligations under the Tender Offer or the Consent Solicitation and will in no
way prejudice the rights of tendering Holders to receive payment for their Notes
validly tendered and not validly withdrawn and accepted for payment pursuant to
the Tender Offer.
HOLDERS WHOSE NOTES ARE TENDERED AND ACCEPTED FOR PURCHASE PURSUANT TO
THE TENDER OFFER WILL BE ENTITLED TO ACCRUED AND UNPAID INTEREST ON THEIR NOTES
UP TO, BUT NOT INCLUDING, THE PAYMENT DATE. UNDER NO CIRCUMSTANCES WILL ANY
ADDITIONAL INTEREST BE PAYABLE BECAUSE OF ANY DELAY IN THE TRANSMISSION OF FUNDS
TO THE HOLDERS OF PURCHASED NOTES OR OTHERWISE.
Tendering Holders of Notes purchased in the Tender Offer will not be
obligated to pay brokerage commissions, fees or transfer taxes with respect to
the purchase of their Notes unless the box entitled "Special Payment
Instructions" or the box entitled "Special Delivery Instructions" on a Letter of
Transmittal has been completed, as described in the Instructions thereto. The
Company will pay all other charges and expenses in connection with the Tender
Offer. See "Dealer Manager; Solicitation Agent; Information Agent; Depositary"
and "Miscellaneous."
From time to time after the Expiration Date or termination of the
Tender Offer, the Company or its affiliates may acquire any Notes that are not
tendered pursuant to the Tender Offer through open market purchases, privately
negotiated transactions, tender offers, exchange offers, defeasance, redemption
or otherwise, upon such terms and at such prices as the Company may determine
(or as may be provided for in the Indenture), which may be more or less than the
price to be paid pursuant to the Tender Offer and the Consent Solicitation and
could be for cash or other consideration. There can be no assurance as to which,
if any, of these alternatives or combinations thereof the Company or its
affiliates will choose to pursue in the future.
PROCEDURES FOR TENDERING NOTES AND
DELIVERING CONSENTS
THE TENDER OF NOTES PURSUANT TO THE TENDER OFFER AND IN ACCORDANCE WITH
THE PROCEDURES DESCRIBED BELOW WILL BE DEEMED TO CONSTITUTE DELIVERY OF A
CONSENT WITH RESPECT TO THE NOTES TENDERED. HOLDERS WHO TENDER THEIR NOTES
PURSUANT TO THE TENDER OFFER ARE OBLIGATED TO DELIVER THEIR CONSENT TO THE
PROPOSED AMENDMENTS AND TO THE EXECUTION AND DELIVERY OF THE SUPPLEMENTAL
INDENTURE. HOLDERS MAY NOT DELIVER CONSENTS WITHOUT TENDERING THEIR NOTES
PURSUANT TO THE TENDER OFFER. A defective tender of Notes (which defect is not
waived by the Company) will not constitute valid delivery of a Consent to the
Proposed Amendments and will not be counted for purposes of determining whether
the Requisite Consents have been obtained therefor. Any beneficial owner whose
Notes are registered in the name of a Custodian or held through the Book-Entry
Transfer Facility and who wishes to tender its Notes and deliver a Consent
should contact such Holder promptly and instruct such Holder to tender its Notes
and/or deliver Consents on such beneficial owner's behalf. To validly tender
Notes, a Holder is obligated to deliver its Note to the Depositary.
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TENDER OF NOTES HELD THROUGH DTC AND DELIVERY OF CONSENTS
The Depositary and DTC have confirmed that the Tender Offer and the
Consent Solicitation are eligible for ATOP. Accordingly, DTC participants may
electronically transmit their acceptance of the Tender Offer by causing DTC to
transfer their Notes to the Depositary in accordance with DTC's ATOP procedures
for such a transfer. In addition, DTC participants may electronically deliver
their Consents pursuant to the Consent Solicitation as part of the electronic
transmission of their acceptance of the Tender Offer. DTC will then send an
Agent's Message to the Depositary.
The term "Agent's Message" means a message transmitted by DTC, received
by the Depositary and forming part of the Book-Entry Confirmation (as defined
below), which states that DTC has received an express acknowledgment from the
DTC participant tendering Notes that are the subject of such Book-Entry
Confirmation that such DTC participant (i) has received and agrees to be bound
by the terms of the Tender Offer and the Consent Solicitation as set forth in
this Offer to Purchase and the Letter of Transmittal and that the Company may
enforce such agreement against such participant and (ii) consents to the
Proposed Amendments and the execution and delivery of the Supplemental Indenture
as described in this Offer to Purchase. HOLDERS DESIRING TO TENDER THEIR NOTES
ON THE EARLY PARTICIPATION PAYMENT DATE OR THE EXPIRATION SHOULD NOTE THAT SUCH
HOLDERS MUST ALLOW SUFFICIENT TIME FOR COMPLETION OF THE ATOP PROCEDURES DURING
THE NORMAL BUSINESS HOURS OF DTC ON SUCH RESPECTIVE DATE.
TENDER OF NOTES HELD IN PHYSICAL FORM AND DELIVERY OF CONSENTS
THE METHOD OF DELIVERY OF NOTES, THE LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS TO THE DEPOSITARY IS AT THE ELECTION AND RISK OF THE
HOLDER TENDERING NOTES AND DELIVERING CONSENTS. DELIVERY OF SUCH DOCUMENTS WILL
BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF SUCH DELIVERY
IS BY MAIL, IT IS SUGGESTED THAT THE HOLDER USE PROPERLY INSURED, REGISTERED
MAIL WITH RETURN RECEIPT REQUESTED, AND THAT THE MAILING BE MADE SUFFICIENTLY IN
ADVANCE OF THE EARLY PARTICIPATION PAYMENT DATE OR THE EXPIRATION DATE, AS THE
CASE MAY BE, TO PERMIT DELIVERY TO THE DEPOSITARY PRIOR TO SUCH RESPECTIVE DATE.
NO ALTERNATIVE, CONDITIONAL OR CONTINGENT TENDERS OF NOTES OR DELIVERIES OF
CONSENTS WILL BE ACCEPTED.
SIGNATURE GUARANTEES
Signatures on the Letter of Transmittal must be guaranteed by a firm
that is a participant in the Security Transfer Agents Medallion Program or the
Stock Exchange Medallion Program (generally a member of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office in the United
States) (an "Eligible Institution"), unless (i) the Letter of Transmittal is
signed by the registered Holder of the Notes tendered therewith and payment of
the Purchase Price and the Early Participation Payment, if applicable, is to be
made, or if any Notes for principal amounts not tendered or not accepted for
purchase are to be issued, directly to such Holder and neither the "Special
Payment Instructions" box nor the "Special Delivery Instructions" box on the
Letter of Transmittal has been completed, or (ii) such Notes are tendered and
Consents delivered for the account of an Eligible Institution.
BOOK-ENTRY TRANSFER
The Depositary will seek to establish a new account or utilize an
existing account with respect to the Notes at DTC (the "Book Entry Transfer
Facility") promptly after the date of this Offer to Purchase (to the extent such
arrangements have not been made previously by the Depositary), and any financial
institution that is a participant in the Book-Entry Transfer Facility system and
whose name appears on a security position listing as the owner of the Notes may
make book-entry delivery of Notes by causing the Book-Entry Transfer Facility to
transfer such Notes into the Depositary's account in accordance with the
Book-Entry Transfer Facility's procedures for such transfer. The confirmation of
a book-entry transfer of Notes into the Depositary's account at the Book-Entry
Transfer Facility as described above is referred to herein as a "Book-Entry
Confirmation." Delivery of documents to the Book-Entry Transfer Facility in
accordance with such Book-Entry Transfer Facility procedures does not constitute
delivery to the Depositary.
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OTHER MATTERS
Notwithstanding any other provision hereof, payment for Notes accepted
for payment pursuant to the Tender Offer will in all cases be made only after
timely receipt by the Depositary of (i) certificates for, or a timely Book-Entry
Confirmation with respect to, such Notes, (ii) a properly completed and validly
executed Letter of Transmittal (or a facsimile thereof), with any required
signature guarantees, or, in the case of a book-entry transfer, an Agent's
Message and (iii) any other documents required by the Letter of Transmittal.
Under no circumstances will interest be paid on the Purchase Price or the Early
Participation Payment, regardless of any delay in making such payments.
Tenders of Notes and deliveries of Consents pursuant to any of the
procedures described above, and acceptance thereof by the Company for purchase,
will constitute a binding agreement between the Company and the tendering and
consenting Holder of such Notes, upon the terms and subject to the conditions of
the Tender Offer and the Consent Solicitation in effect on the date the Notes
are accepted for payment.
By executing a Letter of Transmittal as set forth above (or by
tendering Notes through book-entry transfer), and subject to and effective upon
acceptance for purchase of, and payment for, the Notes tendered therewith, a
tendering Holder (i) irrevocably sells, assigns and transfers to or upon the
order of the Company all right, title and interest in and to all the Notes
tendered thereby, (ii) waives any and all other rights with respect to the Notes
(including, without limitation, the tendering Holder's waiver of any existing or
past defaults and their consequences in respect of the Notes and the Indenture
under which the Notes were issued), (iii) releases and discharges the Company
from any and all claims such Holder may have now, or may have in the future,
arising out of, or related to, the Notes, including without limitation any
claims that such Holder is entitled to receive additional principal or interest
payments with respect to the Notes or to participate in any redemption or
defeasance of the Notes, (iv) delivers such Holder's consent to the Proposed
Amendments and (v) irrevocably constitutes and appoints the Depositary as the
true and lawful agent and attorney-in-fact of such Holder with respect to any
such tendered Notes, with full power of substitution and resubstitution (such
power of attorney being deemed to be an irrevocable power coupled with an
interest) to (a) deliver certificates representing such Notes, or transfer
ownership of such Notes on the account books maintained by DTC, together, in any
such case, with all accompanying evidences of transfer and authenticity, to the
Company, (b) present such Notes for transfer on the relevant security register,
(c) receive all benefits or otherwise exercise all rights of beneficial
ownership of such Notes (except that the Depositary will have no rights to, or
control over, funds from the Company, except as agent for the tendering Holders,
for the Purchase Price and/or the Early Participation Payment, as the case may
be, and accrued interest for any tendered Notes that are purchased by the
Company) and (d) deliver to the Company and the Depositary the Letter of
Transmittal as evidence of the Holder's Consent to the Proposed Amendments and
to the execution and delivery of the Supplemental Indenture and as certification
that consents to the Proposed Amendments duly executed by Holders have been
received, all in accordance with the terms of the Tender Offer and the Consent
Solicitation.
All questions as to the form of all documents and the validity
(including time of receipt) and acceptance of all tenders of Notes and
deliveries of Consents will be determined by the Company, in its sole
discretion, the determination of which shall be final and binding. Alternative,
conditional or contingent tenders of Notes or deliveries of Consents will not be
considered valid. The Company reserves the absolute right, in its sole
discretion, to reject any or all tenders of Notes and deliveries of Consents
that are not in proper form or the acceptance of which, in the Company's
opinion, would be unlawful. The Company also reserves the right to waive any
defects, irregularities or conditions of tender as to particular Notes or of
delivery as to accompanying Consents.
The Company's interpretation of the terms and conditions of the Tender
Offer and the Consent Solicitation (including the instructions in the Letter of
Transmittal) will be final and binding. Any defect or irregularity in connection
with tenders of Notes or deliveries of Consents must be cured within such time
as the Company determines, unless waived by the Company. Tenders of Notes and
deliveries of Consents shall not be deemed to have been made until all defects
and irregularities have been waived by the Company or cured. A defective tender
(which defect is not waived by the Company) will not constitute a valid Consent.
None of the Company, the Depositary, the Trustee, the Information Agent, the
Dealer Manager, the Solicitation Agent or any other person will be under any
duty to give notice of any defects or irregularities in tenders of Notes and
accompanying deliveries of Consents, or will incur any liability to Holders for
failure to give any such notice.
14
WITHDRAWAL OF TENDERS; REVOCATION OF CONSENTS;
ABSENCE OF APPRAISAL RIGHTS
Holders who tender their Notes in the Tender Offer are obligated to
deliver a Consent to the Proposed Amendments. Notes tendered on or prior to the
Early Participation Payment Date may be validly withdrawn at any time on or
prior to the Withdrawal Deadline (by following the procedures set forth below).
The Withdrawal Deadline is 5:00 p.m., New York City Time, on Tuesday, April 13,
2004, unless extended by the Company at its sole discretion. The Company
expressly reserves the right to extend the Withdrawal Deadline from time to time
or for such period or periods as it may determine in its sole discretion by
giving oral (to be confirmed in writing) or written notice of such extension to
the Depositary and by making a public announcement by press release to the Dow
Jones News Service at or prior to 9:00 a.m., New York City Time, on the next
business day following the previously scheduled Withdrawal Deadline. A valid
withdrawal of tendered Notes will be deemed a valid revocation of the related
Consent if properly revoked on or prior to the Withdrawal Deadline. A Consent
may be revoked at any time on or prior to the Withdrawal Deadline, but a valid
revocation of a Consent will render a tender of the related Notes, defective.
Consents may not be revoked after the Withdrawal Deadline, but if the Tender
Offer is terminated thereafter without any Notes having been purchased, the
Proposed Amendments will not become operative.
Holders who wish to exercise their right of withdrawal with respect to
the Tender Offer must give written notice of withdrawal by mail, hand delivery
or manually signed facsimile transmission, or a properly transmitted "Request
Message" through ATOP, which notice must be received by the Depositary at one of
its addresses set forth on the back cover of this Offer to Purchase (or, in the
case of Notes tendered by book-entry transfer, through ATOP) on or prior to the
Early Participation Payment Date or at such other permissible times as are
described herein. In order to be valid, a notice of withdrawal must specify the
name of the person who deposited the Notes to be withdrawn (the "Depositor"),
the name in which the Notes are registered (or, if tendered by book-entry
transfer, the name of the participant in the Book-Entry Transfer Facility whose
name appears on the security position listing as the owner of such Notes), if
different from that of the Depositor, and the principal amount of Notes to be
withdrawn. If certificates have been delivered or otherwise identified (through
confirmation of book-entry transfer of such Notes) to the Depositary, the name
of the Holder and the certificate number or numbers relating to such Notes
withdrawn must also be furnished to the Depositary as aforesaid prior to the
physical release of the certificates for the withdrawn Notes (or, in the case of
Notes transferred by book-entry transfer, the name and number of the account at
the Book-Entry Transfer Facility to be credited with withdrawn Notes). The
notice of withdrawal (other than a notice transmitted through ATOP) must be
signed by the Holder in the same manner as the Letter of Transmittal (including,
in any case, any required signature guarantees), or be accompanied by evidence
satisfactory to the Company that the person withdrawing the tender has the legal
authority to withdraw such tender on behalf of the Holder.
Holders may not rescind withdrawals of tendered Notes. However, validly
withdrawn Notes may be retendered by following the procedures therefor described
elsewhere in this Offer to Purchase at any time on or prior to the Expiration
Date.
Any Holder who has delivered a Consent, or who succeeds to ownership of
Notes in respect of which a Consent has previously been delivered, may validly
revoke such Consent on or prior to the Early Participation Payment Date by
delivering a written notice of revocation in accordance with the following
procedures or a properly transmitted "Request Message" through ATOP. All
properly completed and executed Letters of Transmittal and all Agent's Messages
consenting to the Proposed Amendments that are received by the Depositary will
be counted as Consents with respect to the Proposed Amendments, unless the
Depositary receives a written notice of revocation (or a properly transmitted
"Request Message" through ATOP) on or prior to the Early Participation Payment
Date. In order to be valid, a notice of revocation of Consent must contain the
name of the person who delivered the Consent and the description of the Notes to
which it relates, the certificate number or numbers of such Notes (unless such
Notes were tendered by book-entry transfer), and the aggregate principal amount
represented by such Notes. The revocation of Consent (other than a revocation
transmitted through ATOP) must be signed by the Holder thereof in the same
manner as the original signature on the Letter of Transmittal (including any
required signature guarantee(s)) or be accompanied by evidence satisfactory to
the Company and the Depositary that the person revoking the Consent has the
legal authority to withdraw such Consent on behalf of the Holder. To be
effective, a revocation of Consent must be received on or prior to the Early
Participation Payment Date by the Depositary, at one of its addresses set forth
on the back cover of this Offer to Purchase (or, in the case of Notes tendered
by book-
15
entry transfer, through ATOP). A purported notice of revocation that lacks any
of the required information or is dispatched to an improper address will not
validly revoke a Consent previously given.
ANY WITHDRAWAL OF PREVIOUSLY TENDERED NOTES OR REVOCATION OF CONSENT
OTHERWISE THAN IN ACCORDANCE WITH THE PROVISIONS DESCRIBED ABOVE WILL NOT
CONSTITUTE A VALID WITHDRAWAL OR REVOCATION.
A HOLDER MAY NOT VALIDLY REVOKE A CONSENT UNLESS SUCH HOLDER VALIDLY
WITHDRAWS SUCH HOLDER'S PREVIOUSLY TENDERED NOTES, AND THE VALID WITHDRAWAL OF A
HOLDER'S NOTES WILL CONSTITUTE THE CONCURRENT VALID REVOCATION OF SUCH HOLDER'S
CONSENT. AS A RESULT, A HOLDER WHO VALIDLY WITHDRAWS PREVIOUSLY TENDERED NOTES
WILL NOT RECEIVE THE PURCHASE PRICE OR, TO THE EXTENT OTHERWISE SO ENTITLED, THE
EARLY PARTICIPATION PAYMENT. ANY WITHDRAWAL OF PREVIOUSLY TENDERED NOTES OR
REVOCATION OF A CONSENT OTHERWISE THAN IN ACCORDANCE WITH THE PROVISIONS
DESCRIBED ABOVE WILL NOT CONSTITUTE A VALID REVOCATION OF SUCH HOLDER'S CONSENT.
ANY NOTES VALIDLY TENDERED AND CONSENTS DELIVERED THAT ARE NOT VALIDLY WITHDRAWN
OR REVOKED ON OR PRIOR TO THE WITHDRAWAL DEADLINE MAY NOT BE WITHDRAWN OR
REVOKED THEREAFTER.
All questions as to the form and validity (including time of receipt)
of any delivery or revocation of a Consent will be determined by the Company, in
its sole discretion, which determination shall be final and binding. None of the
Company, the Trustee, the Depositary, the Information Agent, the Dealer Manager,
the Solicitation Agent or any other person will be under any duty to give
notification of any defect or irregularity in any delivery or revocation of a
Consent or incur any liability for failure to give any such notification.
If the Company is delayed in its acceptance for purchase of, or payment
for, validly tendered Notes or is unable to accept for purchase or pay for
validly tendered Notes pursuant to the Tender Offer for any reason, then,
without prejudice to the Company's rights hereunder, tendered Notes may be
retained by the Depositary on behalf of the Company (subject to Rule 14e-1 under
the Exchange Act, which requires that an offeror pay the consideration offered
or return the securities deposited by or on behalf of the Holders thereof
promptly after the termination or withdrawal of a tender offer).
APPRAISAL RIGHTS
The Notes are debt obligations of the Company and are governed by the
Indenture. There are no appraisal or other similar statutory rights available to
Holders in connection with the Tender Offer or the Consent Solicitation.
CONDITIONS OF THE TENDER OFFER
AND CONSENT SOLICITATION
Notwithstanding any other provision of the Tender Offer and the
Consent Solicitation, the Company will not be required to accept for purchase,
or to pay for, Notes validly tendered pursuant to the Tender Offer and the
Consent Solicitation and may terminate, extend or amend the Tender Offer and may
(subject to Rule 14e-1(c) under the Exchange Act, which requires that an offeror
pay the consideration offered or return the securities deposited by or on behalf
of the Holders thereof promptly after the termination or withdrawal of a tender
offer) postpone the acceptance for purchase of, and payment for, Notes so
tendered, if on or after the date of this Offer to Purchase and on or prior to
the Expiration Date (each, a "General Condition"):
(i) There shall have been instituted, threatened or be pending any
action or proceeding before or by any court, governmental, regulatory or
administrative agency or instrumentality, or by any other person, in connection
with the Tender Offer or the Consent Solicitation, that is, or is reasonably
likely to be, in the reasonable judgment of the Company, materially adverse to
the business, operations, properties, condition (financial or otherwise),
assets, liabilities or prospects of the Company, its subsidiaries or its
affiliates or which would or might, in the reasonable judgment of the Company,
prohibit, prevent, restrict or delay consummation of the Tender Offer or the
Consent Solicitation;
(ii) There shall have occurred any development which would, in the
reasonable judgment of the Company, materially adversely affect the business,
operations, properties, condition (financial or otherwise), assets, liabilities
or prospects of the Company, its subsidiaries or its affiliates;
16
(iii) An order, statute, rule, regulation, executive order, stay,
decree, judgment or injunction shall have been proposed, enacted, entered,
issued, promulgated, enforced or deemed applicable by any court or governmental,
regulatory or administrative agency or instrumentality (collectively, a "Legal
Event") that, in the reasonable judgment of the Company, would or might
prohibit, prevent, restrict or delay consummation of the Tender Offer or the
Consent Solicitation;
(iv) There shall have occurred or be likely to occur (a) any event
affecting the business, operations, properties, condition (financial or
otherwise), assets, liabilities or prospects of the Company, its subsidiaries or
its affiliates that, in the reasonable judgment of the Company, would or might
prohibit, prevent, restrict or delay consummation of the Tender Offer or the
Consent Solicitation, or (b) any Legal Event which in the reasonable judgment of
the Company is, or is reasonably likely to be, materially adverse to the
business, operations, properties, condition (financial or otherwise), assets,
liabilities or prospects of the Company, its subsidiaries or its affiliates;
(v) The Trustee under the Indenture shall have objected in any respect
to or taken any action that could, in the reasonable judgment of the Company,
adversely affect the consummation of the Tender Offer or the Consent
Solicitation or the Company's ability to effect any of the Proposed Amendments
or shall have taken any action that challenges the validity or effectiveness of
the procedures used by the Company in soliciting the Consents (including the
form thereof) or in the making of the Tender Offer or the Consent Solicitation
or the acceptance of, or payment for, the Notes or the Consents; or
(vi) There shall have occurred (a) any general suspension of, or
limitation on prices for, trading in the United States securities or financial
markets, (b) any significant change in the price of the Notes which is adverse
to the Company or any of its affiliates, (c) a material impairment in the
trading market for debt securities, (d) a declaration of a banking moratorium or
any suspension of payments in respect of banks in the United States, (e) any
limitation (whether or not mandatory) by any government or governmental,
administrative or regulatory authority or agency, domestic or foreign, or other
event that, in the reasonable judgment of the Company, might affect the
extension of credit by banks or other lending institutions, (f) there is (i) an
outbreak or escalation of hostilities or acts of terrorism involving the United
States or declaration of a national emergency or war by the United States or
(ii) any other calamity or crisis or any change in political, financial or
economic conditions, if the effect of any such event in (i) or (ii), in the
Company's sole judgment, makes it impracticable or inadvisable to proceed with
the Tender Offer or the Consent Solicitation, or (g) in the case of any of the
foregoing existing on the date hereof, a material acceleration or worsening
thereof.
The conditions to the Tender Offer and the Consent Solicitation are for
the sole benefit of the Company and may be asserted by the Company in its sole
discretion regardless of the circumstances giving rise to such conditions or may
be waived by the Company, in whole or in part, in its sole discretion, whether
or not any other condition of the Tender Offer and the Consent Solicitation also
is waived. The Company has not made a decision as to what circumstances would
lead it to waive any such condition, and any such waiver would depend on
circumstances prevailing at the time of such waiver. Any determination by the
Company concerning the events described in this section shall be final and
binding upon all Holders.
The Tender Offer is not conditioned on the receipt of the Requisite
Consents or on any minimum amount of Notes being tendered.
ALTHOUGH THE COMPANY HAS NO PRESENT PLANS OR ARRANGEMENTS TO DO SO, THE
COMPANY RESERVES THE RIGHT TO AMEND, AT ANY TIME, THE TERMS OF THE TENDER OFFER
OR THE CONSENT SOLICITATION. THE COMPANY WILL GIVE HOLDERS NOTICE OF SUCH
AMENDMENTS AS MAY BE REQUIRED BY APPLICABLE LAW.
17
MARKET AND TRADING INFORMATION
The Notes are not listed on any national or regional securities
exchange or reported on a national quotation system. To the extent that the
Notes are traded, prices of the Notes may fluctuate greatly depending on the
trading volume and the balance between buy and sell orders. Holders are urged to
obtain current information with respect to the market prices for the Notes.
MATERIAL UNITED STATES FEDERAL INCOME TAX
CONSIDERATIONS
The following is a general discussion of the material United States
federal income tax consequences of the Tender Offer and Consent Solicitation to
Holders. This discussion is a summary for general information purposes only and
does not consider all aspects of United States federal income taxation which may
be relevant to particular Holders in light of their individual investment
circumstances or to certain types of Holders subject to special tax rules (e.g.,
financial institutions, broker-dealers, insurance companies, tax-exempt
organizations, persons that hold Notes as part of a "straddle," a "hedge" or a
"conversion transaction," persons that acquire Notes in connection with
employment or other performance of services, persons that have a functional
currency other than the U.S. dollar, and investors in pass-through entities),
nor does it address state, local or foreign tax considerations. This summary
assumes that Holders have held their Notes as "capital assets" (generally, held
for investment) within the meaning of Section 1221 of the Internal Revenue Code
of 1986, as amended (the "Code"). This summary is based on the Code and
applicable Treasury regulations, rulings, administrative pronouncements and
decisions as of the date hereof, all of which are subject to change or differing
interpretations at any time with possible retroactive effect.
For purposes of this discussion, a "U.S. Holder" is a beneficial owner
of Notes that for United States federal income tax purposes is: (i) an
individual citizen or resident of the United States, including an alien
individual who is a lawful permanent resident of the United States or meets the
substantial presence residency test under the United States federal income tax
laws; (ii) a corporation, or other entity treated as a corporation for federal
income tax purposes, that is created or organized in or under the laws of the
United States, any state thereof or the District of Columbia, unless otherwise
provided by Treasury regulations; (iii) an estate the income of which is subject
to United States federal income taxation regardless of its source; or (iv) a
trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more United States
persons have the authority to control all substantial decisions of the trust, or
electing trusts in existence on August 20, 1996 to the extent provided in
Treasury regulations.
A "Non-U.S. Holder" is any beneficial owner of Notes that is not a U.S.
Holder or a partnership. If a partnership holds a Note, the United States
federal income tax treatment of a partner generally will depend upon the status
of the partner and the activities of the partnership. Holders that are partners
of partnerships holding the Notes are urged to consult their tax advisors.
ALL HOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS REGARDING THE SPECIFIC
UNITED STATES FEDERAL, STATE, LOCAL, AND FOREIGN INCOME AND OTHER TAX
CONSIDERATIONS OF THE TENDER OFFER AND THE CONSENT SOLICITATION.
CONSEQUENCES TO TENDERING AND CONSENTING U.S. HOLDERS
Sale of a Note. The receipt of cash by a U.S. Holder in exchange for a
Note will be a taxable transaction for United States federal income tax
purposes. Subject to the market discount rules and the treatment of Early
Participation Payments discussed below, a U.S. Holder will recognize capital
gain or loss in an amount equal to the difference between (i) the amount of cash
received (other than amounts attributable to accrued and unpaid interest, if
any, and the Early Participation Payment if it is not treated as proceeds from a
sale or exchange of a Note for United States federal income tax purposes) and
(ii) the U.S. Holder's adjusted tax basis in the Note (not including any basis
attributable to accrued and unpaid interest, if any). Such capital gain or loss
will be long-term capital gain or loss if the U.S. Holder held the Note for more
than one year at the time of such sale. Certain non-corporate taxpayers
(including individuals) are generally subject to reduced rates of United States
federal income taxation on net long-term capital gains. The deductibility of
capital losses is subject to certain limitations. The cash received attributable
18
to accrued and unpaid interest that has not yet been included in the U.S.
Holder's income will be taxable as ordinary income.
Market Discount. A Note has "market discount" generally if its stated
principal amount exceeds its tax basis in the hands of a U.S. Holder immediately
after its acquisition, unless a statutorily defined de minimis exception
applies. Gain recognized by a U.S. Holder with respect to a Note acquired with
market discount will generally be subject to tax as ordinary income to the
extent of the market discount accrued during the period the Note was held by
such U.S. Holder This rule will not apply to a U.S. Holder who previously had
elected to include market discount in income as it accrued for federal income
tax purposes.
Early Participation Payments. The tax treatment of the receipt of an
Early Participation Payment by a U.S. Holder whose Note is purchased pursuant to
the Tender Offer is subject to uncertainty, because there are no authorities
that directly address the treatment of such payments. If treated as additional
consideration for the Note, the Early Participation Payment would be treated as
part of the amount received, as provided in the discussion above under the
caption "Sale of a Note." It is also possible that the Early Participation
Payment may be treated as a separate fee that would be subject to tax as
ordinary income. In the absence of clear authority, the Company intends to treat
Early Participation Payments as additional consideration for the Notes.
CONSEQUENCES TO TENDERING AND CONSENTING NON-U.S. HOLDERS
Sale of a Note. With the possible exception of the portion attributable
to the an Early Participation Payment, the receipt of cash by a Non-U.S. Holder
in exchange for a Note, besides amounts attributable to accrued and unpaid
interest, will generally not be subject to United States federal income tax if
(i) the disposition is not effectively connected with such Non-U.S. Holder's
conduct of a United States trade or business and (ii) if such Non-U.S. Holder is
an individual, that individual is present in the United States for fewer than
183 days during the year of receipt and certain other conditions are met.
Amounts attributable to accrued and unpaid interest paid to a Non-U.S.
Holder will not be subject to U.S federal income tax or withholding tax if (i)
the interest is not effectively connected with such Non-U.S. Holder's conduct of
a United States trade or business; and (ii) the Non-U.S. Holder (A) does not
actually or constructively own a 10% or greater interest in the Company, (B) is
not a "controlled foreign corporation" with respect to which the Company is
related within the meaning of Section 864(d)(4) of the Code; (C) is not a bank
receiving interest described in Section 881(c)(3)(A) of the Code; and (D)
provides the appropriate certification as to its non-U.S. status. A Non-U.S.
Holder can generally meet this certification requirement by providing a properly
executed IRS Form W-8BEN or substantially similar form signed by the Non-U.S.
Holder under penalties of perjury certifying that such person is a Non-U.S.
Holder and providing a name and address. If a Non-U.S. Holder holds a Note
through a securities clearing organization or other qualified financial
institution, the organization or institution may provide a signed statement to
the Withholding Agent. However, unless special rules applicable to qualified
intermediaries apply, the signed statement must generally be accompanied by a
statement containing the relevant information from the executed IRS Form W-8BEN
or substantially similar form such Non-U.S. Holder provided to such organization
or institution.
Except in the case of income or gain in respect of the disposition of a
Note that is effectively connected with the conduct of a United States trade or
business, discussed below, and with the possible exception of gain attributable
to the Early Participation Payment, gain recognized by a Non-U.S. Holder which
does not qualify for exemption from taxation as described above will be subject
to United States federal income tax and withholding at a rate of 30% unless
reduced or eliminated by an applicable tax treaty.
Early Participation Payment. The tax treatment of the receipt of an
Early Participation Payment by a Non-U.S. Holder whose Note is purchased
pursuant to the Tender Offer is subject to uncertainty as it is for U.S.
Holders, as discussed above under "Consequences to Tendering and Consenting U.S.
Holders - Early Participation Payment." If it constitutes additional
consideration for the Note, the consequences should be as discussed above under
"Consequences to Tendering and Consenting Non-U.S. Holders-Sale of a Note." If
the Early Participation Payment is treated as a separate fee, the United States
federal income tax consequences to a Non-U.S. Holder are unclear. The
Withholding Agent with respect to a Non-U.S. Holder might withhold United States
federal income tax on the Early Participation Payment as discussed above for
payments to Non-U.S. Holders that do not otherwise qualify for
19
exemption from taxation. In the event of such withholding, a Non-U.S. Holder may
choose to file a claim with the IRS for a refund of such withheld amounts.
Effectively Connected Income or Gain. Income or gain on the sale of a
Note held by a Non-U.S. Holder that is effectively connected with the conduct of
a United States trade or business is not subject to United States federal
withholding tax, provided that the Non-U.S. Holder furnishes a properly excluded
IRS Form W-8ECI to the Company, but such Non-U.S. Holder is subject to regular
United States federal income tax on that income or gain in the same manner as a
U.S. Holder, and general United States federal income tax return filing
requirements will apply. In addition, if the Non-U.S. Holder is a corporation,
it may also be subject to a branch profits tax equal to 30% of its effectively
connected adjusted earnings and profits for the taxable year of the sale, unless
it qualifies for a lower rate under an applicable income tax treaty.
CONSEQUENCES TO NON-TENDERING HOLDERS
Generally, the modification of a debt instrument will be treated, for
federal income tax purposes, as a "deemed" exchange of an old debt instrument
for a new debt instrument if such modification is "significant" as specially
determined for federal income tax purposes. While Treasury Regulations provide
that a modification that adds, deletes or alters customary accounting and
financial covenants is not a significant modification, the proposed amendments
(including the deletion of certain defaults) may be viewed as extending beyond
such modifications. In the case of the adoption of the Proposed Amendments,
although the issue is not free from doubt, the Company intends to take the
position that the adoption of such amendments does not constitute a "significant
modification" of the terms of the Notes for United States federal income tax
purposes. In such case, a Holder who does not tender its Notes pursuant to the
Tender Offer would not recognize any gain or loss for United States federal
income tax purposes as a result of the adoption of the Proposed Amendments, and
such Holder would continue to have the same tax basis and holding period with
respect to the Notes as it had before the adoption.
If the adoption of the Proposed Amendments were treated as a
significant modification of the terms of the Notes, however, a non-tendering
Holder would be treated as having exchanged its "old" Notes for "new" Notes for
United States federal income tax purposes. Were both the "old" Notes and the
"new" Notes to be treated as "securities" within the meaning of Section 354 of
the Code, such exchange could be treated as a tax-free recapitalization, in
which case such non-tendering Holder would not recognize any gain or loss.
Because the "new "Notes would not be deemed to have a remaining term to maturity
of less than 5 years, the "new" Notes would likely be "securities," but this
conclusion is not certain. If the "old" Notes or "new" Notes were not treated as
"securities" for federal income tax purposes, a non-tendering U.S. Holder or
Non-U.S. Holder would recognize interest income, market discount, gain, or loss
to the extent and subject to the conditions discussed above under "Consequences
to Tendering and Consenting U.S. Holders" or "Consequences to Tendering and
Consenting Non-U.S. Holders," as applicable, with respect to the sale of a Note,
treating the issue price (as described below) of the "new" Notes as the amount
received. In such case, the non-tendering Holder's holding period in the "new"
Notes would begin the day after the effective date of the Proposed Amendments
and such non-tendering Holder's basis in the "new" Notes would equal the issue
price thereof.
In the case of a deemed exchange, if neither the "old" Notes nor the
"new" Notes deemed exchanged therefor are traded on an established securities
market (for purposes of the original issue discount provisions of the Code), the
issue price of such "new" Notes should equal their stated principal amount. If
either the "old" Notes or the "new" Notes are so traded, the issue price of the
"new" Notes would equal the fair market value of the publicly traded Notes (of
the "new" Notes, if both the "new" Notes and the old Notes are publicly traded)
as of the date the "new" Notes are deemed to be issued. In any such case, the
"new" Notes may be issued with original issue discount if their stated
redemption price at maturity exceeds their issue price, or, alternatively, may
be issued with bond premium (which may be amortizable to the extent provided in
Section 171 of the Code) if the adjusted tax basis of the "new" Notes exceeds
the amount payable at maturity. Except where it falls under a statutory de
minimis rule, any original issue discount would be required to be included in
the income of the Holders of the "new" Notes on a constant yield basis over the
term of the "new" Notes and in advance of cash payments attributable to such
income.
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BACKUP WITHHOLDING
U.S. Holders. A U.S. Holder may be subject to backup withholding with
respect to the receipt of cash in exchange for a Note unless the U.S. Holder
provides the Company a correct Taxpayer Identification Number ("TIN") and
certifies that the U.S. Holder is a United States person, the TIN is correct (or
that the U.S. Holder is awaiting a TIN) and the U.S. Holder either (a) is exempt
from backup withholding, (b) has not been informed by the IRS that backup
withholding is required due to underreporting of interest and dividends from
payments made to the U.S. Holder or (c) has been informed by the IRS that backup
withholding is no longer required, which information may be provided on IRS Form
W-9. U.S. Holders should consult their tax advisors as to their qualification
for exemption from backup withholding and the procedure for obtaining such
exemption. Any amount paid as backup withholding would be creditable against the
U.S. Holder's United States federal income tax liability, provided that the
requisite information is provided to the IRS.
Non-U.S. Holders. The amount of the interest, Early Participation
Payment, and proceeds paid to a Non-U.S. Holder in exchange for a Note may be
subject to backup withholding, unless status as a Non- U.S. Holder is certified
on an IRS Form W-8BEN or substantially similar form in the manner described
above under "Consequences to Tendering and Consenting Non-U.S. Holders." Even
without having executed an IRS Form W-8BEN or substantially similar form,
however, in some cases backup withholding may not apply to proceeds received
upon the sale of a Note if the proceeds are received through a broker's foreign
office.
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION PURPOSES ONLY. ALL HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS TO
DETERMINE THE UNITED STATES FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES
OF THE TENDER OF NOTES PURSUANT TO THE TENDER OFFER, THE CONSENT SOLICITATION
AND THE ADOPTION OF THE PROPOSED AMENDMENTS.
DEALER MANAGER; SOLICITATION AGENT;
INFORMATION AGENT; DEPOSITARY
The Company has retained Banc of America Securities LLC to act as the
Dealer Manager and Solicitation Agent for the Tender Offer and Consent
Solicitation. In its capacity as Dealer Manager and Solicitation Agent, Banc of
America Securities LLC may contact Holders regarding the Tender Offer and
Consent Solicitation and may request Custodians to forward this Offer to
Purchase and related materials to beneficial owners of Notes.
The Dealer Manager and Solicitation Agent is providing services to the
Company with respect to the Tender Offer and Consent Solicitation, and
affiliates of the Dealer Manager and Solicitation Agent are lenders under
certain loan agreements with, and the issuer of certain letters of credit
entered into in favor of, certain of the Company's affiliates. In addition, the
Dealer Manager and Solicitation Agent has provided, and may provide in the
future, financial, advisory, investment banking and general banking services to
the Company and its affiliates, for which it has received and would receive
customary fees and commissions, in addition to being reimbursed by the Company
for its out-of-pocket expenses in connection with the Tender Offer and Consent
Solicitation.
At any given time, the Dealer Manager and Solicitation Agent may trade
the Notes or other securities of the Company for its own account, or for the
accounts of its customers, and accordingly, may hold a long or short position in
the Notes or those securities. The Dealer Manager and Solicitation Agent is not
obligated to make a market in the Notes.
The Company has also agreed to indemnify Banc of America Securities LLC
and its affiliates against certain liabilities, including certain liabilities
under federal or state law or otherwise caused by, relating to or arising out of
the Tender Offer and Consent Solicitation.
Global Bondholder Services Corporation has been appointed the
Information Agent with respect to the Tender Offer and Consent Solicitation. The
Company will pay the Information Agent customary fees for its services and
reimburse the Information Agent for its reasonable out-of-pocket expenses in
connection therewith. The Company has also agreed to indemnify the Information
Agent for certain liabilities. Requests for additional copies of the
21
documentation may be directed to the Information Agent at the address and
telephone numbers set forth on the back cover of this Offer to Purchase.
Global Bondholder Services Corporation has been appointed the
Depositary for the Tender Offer and the Consent Solicitation. All deliveries and
correspondence sent to the Depositary should be directed to one of the addresses
set forth on the back cover of this Offer to Purchase. The Company will pay the
Depositary customary fees for its services and reimburse the Depositary for its
reasonable out-of-pocket expenses in connection therewith. The Company has also
agreed to indemnify the Depositary for certain liabilities.
In connection with the Tender Offer and the Consent Solicitation,
directors and officers of the Company and its respective affiliates may solicit
tenders and Consents by use of the mails, personally or by telephone, facsimile,
telegram, electronic communication or other similar methods. Directors and
officers of the Company will not be specifically compensated for these services.
The Company will pay brokerage houses and other custodians, nominees and
fiduciaries the reasonable out-of-pocket expenses incurred by them in forwarding
copies of this Offer to Purchase and related documents to the beneficial owners
of the Notes and in handling or forwarding tenders of Notes and deliveries of
accompanying Consents by their customers.
MISCELLANEOUS
The Tender Offer and the Consent Solicitation are not being made to
(nor will tenders of Notes or deliveries of Consents be accepted from or on
behalf of) Holders of Notes in any jurisdiction in which the making or
acceptance of the Tender Offer and the Consent Solicitation would not be in
compliance with the laws of such jurisdiction. However, the Company, in its sole
discretion, may take such action as it may deem necessary to make or extend the
Tender Offer and the Consent Solicitation in any such jurisdiction.
No person has been authorized to give any information or make any
representation on behalf of the Company that is not contained in this Offer to
Purchase or in the Letter of Transmittal and, if given or made, such information
or representation should not be relied upon.
RFS Partnership, L.P.
RFS 2002 Financing, Inc.
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ANNEX A
THE PROPOSED AMENDMENTS
The following is a description of the Proposed Amendments to certain
restrictive covenants and certain of the event of default provisions of the
Indenture.
If the Proposed Amendments become operative, the provisions set forth
in the form of italicized clauses below will be deleted from the Indenture. The
Proposed Amendments may also delete those definitions from the Indenture that
are used only in provisions that would be eliminated as a result of the
elimination of the following provisions and cross-references to provisions in
the Indenture that have been deleted as a result of the Proposed Amendments will
be revised to reflect such deletions.
The provisions of the Indenture reprinted below are qualified in their
entirety by reference to the Indenture. Capitalized terms used in this Annex A
without definition have the same meanings as set forth in the Indenture.
IF THE REQUISITE CONSENTS ARE RECEIVED FROM THE HOLDERS OF AT LEAST A
MAJORITY OF THE HOLDERS OF THE OUTSTANDING AMOUNT, THE FOLLOWING SECTIONS OF THE
INDENTURE WILL BE ELIMINATED:
SECTION 4.3 SEC REPORTS AND REPORTS TO HOLDERS
Whether or not the Company and the Parent are subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, the Company and the
Parent shall deliver or make available to the Trustee (and if the Company and
the Parent are not subject to such reporting requirements, to each Holder of
Notes), within five days after the Company and the Parent are or would have been
(if the Company and the Parent were subject to such reporting obligations)
required to file such statements with the SEC, annual and quarterly financial
statements substantially equivalent to financial statements that would have been
included in reports filed with the SEC, if the Company and the Parent were
subject to the requirements of Section 13 or 15(d) of the Exchange Act,
including, with respect to annual information only, a report thereon by the
Company's certified independent public accountants as such would be required in
such reports to the Commission, and, in each case, together with a management's
discussion and analysis of financial condition and results of operations which
would be so required and, unless the Commission shall not accept such reports,
file with the Commission the annual, quarterly and other reports which it is or
would have been required to file with the Commission. In addition, the Issuers
and the Guarantors agree that, prior to consummation of the Exchange Offer, they
shall make available to the holders and to securities analysts and prospective
investors, upon their request, the information required to be delivered pursuant
to Rule 144A(d)(4) under the Securities Act.
SECTION 4.4 COMPLIANCE CERTIFICATE
(a) The Issuers shall deliver to the Trustee, within 120 days
after the end of each fiscal year, an Officers' Certificate stating that a
review of the activities of the Issuers, the Parent and their respective
Subsidiaries during the preceding fiscal year has been made under the
supervision of the signing Officers with a view to determining whether the
Issuers, the Parent and their respective Subsidiaries have kept, observed,
performed and fulfilled their obligations under this Indenture, and further
stating, as to each such Officer signing such certificate, that to his or her
knowledge the Issuers, the Parent and their respective Subsidiaries are not in
default in the performance or observance of any of the terms, provisions and
conditions of this Indenture (or, if a Default or Event of Default shall have
occurred and be continuing, describing all such Defaults or Events of Default of
which he or she may have knowledge and what action the Issuers are taking or
proposes to take with respect thereto) and that to his or her knowledge no event
has occurred and remains in existence by reason of which payments on account of
the principal of or interest, if any, on the Notes is prohibited or if such
event has occurred, a description of the event and what action the Issuers are
taking or proposes to take with respect thereto. The Issuers shall provide the
Trustee with timely written notice of any change in its fiscal year end, which
is currently December 31.
(b) The Issuers shall, so long as any of the Notes are
outstanding, deliver to the Trustee, within five Business Days of any Officer
becoming aware of any Default or Event of Default, an Officers' Certificate
A-1
specifying such Default or Event of Default and what action the Issuers are
taking or proposes to take with respect thereto.
SECTION 4.5 TAXES
The Company shall pay, and shall cause each of its Subsidiaries to pay,
prior to delinquency, all material taxes, assessments, and governmental levies
except such as are contested in good faith and by appropriate proceedings or
where the failure to effect such payment would not have a material adverse
effect on the ability of the Company and the Guarantors to satisfy their
obligations under the Notes, the Guarantees and this Indenture.
SECTION 4.7 LIMITATION ON INCURRENCE OF ADDITIONAL INDEBTEDNESS AND DISQUALIFIED
CAPITAL STOCK
(a) Except as set forth in this Section 4.7, the Company and
the Parent shall not, and neither the Company nor the Parent shall permit any of
their respective Subsidiaries to, directly or indirectly, issue, assume,
guaranty, incur, become directly or indirectly liable with respect to (including
as a result of an Acquisition), or otherwise become responsible for,
contingently or otherwise (individually and collectively, to "incur" or, as
appropriate, an "incurrence"), any Indebtedness (including Disqualified Capital
Stock and Acquired Indebtedness), other than Permitted Indebtedness.
Notwithstanding the foregoing if, on the date of such incurrence (the
"Incurrence Date"), (x) no Default or Event of Default shall have occurred and
be continuing at the time of, or would exist after giving effect on a pro forma
basis to, such incurrence of Indebtedness, and (y) the Consolidated Coverage
Ratio of the Parent for the Reference Period immediately preceding the
Incurrence Date, after giving effect on a pro forma basis to such incurrence of
such Indebtedness and, to the extent set forth in the definition of Consolidated
Coverage Ratio, the use of proceeds thereof, would be at least 2.00 to 1.00 (the
"Debt Incurrence Ratio"), then:
(1) the Company and the Parent and their respective
Subsidiaries may incur Indebtedness (other than Secured Indebtedness and
Subsidiary Indebtedness), (including Disqualified Capital Stock) if, after
giving effect to, on a pro forma basis, such incurrence and the receipt and
application of proceeds therefrom, the aggregate amount of all outstanding
Indebtedness and Disqualified Capital Stock of the Parent and its Subsidiaries,
including the Company and its Subsidiaries, determined on a consolidated basis,
without duplication, is less than or equal to 65% of the Adjusted Total Assets
of the Parent and its Subsidiaries, including the Company and its Subsidiaries;
and
(2) the Company and the Parent and their respective
Subsidiaries may incur Secured Indebtedness and the Parent's Subsidiaries,
excluding the Company but including the Company's Subsidiaries, may incur
Subsidiary Indebtedness (including Disqualified Capital Stock), if, after giving
effect, on a pro forma basis, to such incurrence of Indebtedness and the receipt
and application of proceeds therefrom, the aggregate amount of all outstanding
Secured Indebtedness and Subsidiary Indebtedness (including Disqualified Capital
Stock), of the Parent and its Subsidiaries (including outstanding amounts of
Refinancing Indebtedness in respect of Secured Indebtedness and Subsidiary
Indebtedness and Disqualified Capital Stock), including for purposes of Secured
Indebtedness only, the Secured Indebtedness of the Company, determined on a
consolidated basis, without duplication, is less than or equal to 45% of the
Adjusted Total Assets of the Parent and its Subsidiaries, including the Company
and its Subsidiaries.
(b) The foregoing limitations of this Section 4.7 shall not
prohibit the Company's incurrence or the incurrence by any Guarantor of
Indebtedness pursuant to the Credit Agreement in an aggregate amount incurred
and outstanding at any time pursuant to this clause (b) (plus any Refinancing
Indebtedness incurred to retire, defease, refinance, replace or refund such
Indebtedness) of up to $175 million, minus the amount of any such Indebtedness
(1) retired with the Net Cash Proceeds from any Asset Sale applied to
permanently reduce the outstanding amounts or the commitments with respect to
such Indebtedness pursuant to Section 4.13 herein or (2) assumed by a transferee
in an Asset Sale so long as neither the Company, any of Guarantors nor any the
Parent's or the Company's Subsidiaries continues to be an obligor under such
Indebtedness.
A-2
(c) Indebtedness (including Disqualified Capital Stock) of any
Person that is outstanding at the time such Person becomes a Subsidiary
(including upon designation of any subsidiary or other Person as a Subsidiary)
of either or both of the Company or the Parent or is merged with or into or
consolidated with either or both of the Company or the Parent or a Subsidiary of
either or both of the Company and the Parent shall be deemed to have been
incurred at the time such Person becomes or is designated a Subsidiary of either
or both of the Company and the Parent or is merged with or into or consolidated
with either or both of the Company and the Parent or a Subsidiary, as
applicable.
(d) Notwithstanding any other provision of this Section 4.7,
but only to avoid duplication, subject to clause (a)(2) of this Section 4.7, a
guarantee of Indebtedness of either or both of the Company or the Parent or of
the Indebtedness of another Guarantor incurred in accordance with the terms of
this Indenture issued at the time such Indebtedness was incurred or, if later,
at the time the guarantor thereof became a Subsidiary of the Company or the
Parent shall not constitute a separate incurrence, or amount outstanding, of
Indebtedness for purposes of the foregoing provisions (other than clause (a)(2)
of this Section 4.7). Upon each incurrence of Indebtedness, the Company may
designate pursuant to which provision of this Section 4.7 such Indebtedness is
being incurred and the Company may subdivide an amount of Indebtedness and
designate more than one provision pursuant to which such amount of Indebtedness
is being incurred and such Indebtedness shall not be deemed to have been
incurred or outstanding under any other provision of this Section 4.7, except as
stated otherwise in the foregoing provisions.
SECTION 4.8 LIMITATION ON LIENS
(a) The Company and the Parent shall not, and shall not permit
any of their respective Subsidiaries to, create, incur, assume or suffer to
exist any Lien of any kind upon any of their respective assets now owned or
acquired on or after the Issue Date or upon any income or profits therefrom
securing any Indebtedness, unless the Company and the Parent provide, and cause
their respective Subsidiaries to provide, concurrently therewith, that the Notes
and the applicable Guarantees are equally and ratably so secured.
(b) Notwithstanding the foregoing, the Company and the Parent
may, and may permit their respective Subsidiaries to incur, assume or suffer to
exist Liens of any kind upon any of their respective assets now owned or
acquired on or after the Issue Date or upon any income or profits therefrom
securing Indebtedness in an aggregate amount outstanding at any time (including
outstanding amounts of Refinancing Indebtedness), without duplication, less than
or equal to 45% of Adjusted Total Assets of the Parent and its Subsidiaries,
including the Company and its Subsidiaries, determined on a consolidated basis.
SECTION 4.9 LIMITATION ON RESTRICTED PAYMENTS
(a) The Company and the Parent shall not, and shall not permit
any of their respective Subsidiaries to, directly or indirectly, make any
Restricted Payment if, after giving effect to such Restricted Payment on a pro
forma basis:
(1) a Default or an Event of Default shall have
occurred and be continuing,
(2) the Company is not permitted to incur at least
$1.00 of additional Indebtedness pursuant to the Debt Incurrence Ratio and
clauses (a)(1) or (a)(2) of Section 4.7 hereof, or
(3) the aggregate amount of all Restricted Payments
made by the Company and the Parent and their respective Subsidiaries, including
after giving effect to such proposed Restricted Payment, on and after the Issue
Date, would exceed, without duplication, the sum of:
(A) 95% of the aggregate Funds From
Operations (determined by excluding income resulting from transfers of assets by
the Company or the Parent or any of their respective Subsidiaries to an
Unrestricted Subsidiary) accrued on a cumulative basis during the period (taken
as one accounting period), commencing on the first day of the fiscal quarter in
which the Issue Date occurs, to and including the last day of the fiscal quarter
ended immediately prior to the date of each such calculation for which the
Company's and the
A-3
Parent's consolidated financial statements are required to be delivered to the
Trustee or, if sooner, filed with the SEC (or, in the event Funds From
Operations for such period is a deficit, then minus 100% of such deficit), plus
(B) the aggregate Net Cash Proceeds received
by the Company or the Parent from the sale of Qualified Capital Stock (other
than (i) to a Subsidiary of either or both of the Company or the Parent and (ii)
to the extent applied in connection with a Qualified Exchange or a Permitted
Investment or, to avoid duplication, otherwise given credit for in any provision
of clauses (b) or (c) hereof), after the Issue Date, plus
(C) except in each case, in order to avoid
duplication, to the extent any such payment or proceeds have been included in
the calculation of Funds From Operations, an amount equal to the net reduction
in Investments (other than returns of or from Permitted Investments) in any
Person resulting from cash distributions on or cash repayments of any
Investments, including payments of interest on Indebtedness, dividends,
repayments of loans or advances, or other distributions or other transfers of
assets, in each case to the Company or the Parent or any of their respective
Subsidiaries or from the Net Cash Proceeds from the sale of any such Investment
or from redesignations of Unrestricted Subsidiaries as Subsidiaries (valued in
each case as provided in the definition of "Investments"), not to exceed, in
each case, the amount of Investments previously made by the Company or the
Parent or any of their Subsidiaries in such Person, including, if applicable,
such Unrestricted Subsidiary, less the cost of disposition, plus
(D) the purchase price of noncash tangible
assets acquired in exchange for an issuance of Qualified Capital Stock of either
of the Company or the Parent on or after the Issue Date (other than, in order to
avoid duplication, acquisitions that constitute Permitted Investments and other
than from the Parent, the Company or any of their respective Subsidiaries).
(b) Notwithstanding clause (a) of this Section 4.9, so long as
the Parent is otherwise maintaining its status as a REIT under the Internal
Revenue Code of 1986, as amended (the "Code"), the Company or the Parent may
declare or pay any dividend or make any distribution that is necessary to
maintain the Parent's status as a REIT under the Code if at the time of such
declaration (or, if there is no declaration, at the time of payment):
(1) the aggregate principal amount of all outstanding
Indebtedness of the Parent and its Subsidiaries, including the Company and its
Subsidiaries, on a consolidated basis at such time is less than 65% of Adjusted
Total Assets; and
(2) no Default or Event of Default shall have
occurred and be continuing.
The full amount of all Restricted Payments made pursuant to clause (b)
of this Section 4.9, however, shall be counted as Restricted Payments for
purposes of the calculation of the aggregate amount of Restricted Payments
available to be made referred to in clause (a)(3) of this Section 4.9.
(c) Clause (a) under this section 4.9 shall not prohibit:
(1) a Qualified Exchange, or
(2) the payment of any dividend on Qualified Capital
Stock within 60 days after the date of its declaration if such dividend could
have been made on the date of such declaration in compliance with the foregoing
provisions.
Clauses (a)(2) and (a)(3) of this Section 4.9 shall not prohibit:
(3) repurchases of Capital Stock from the Company's
or the Parent's employees or directors (or their heirs or estates) or from
employees or directors (or their heirs or estates) of Company's or the Parent's
Subsidiaries upon the death, disability or termination of employment in an
aggregate amount to all
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employees and directors (or their heirs and estates) not to exceed $500,000 per
year or $3 million in the aggregate on and after the Issue Date, or
(4) any dividend, distribution or other payments by
any Subsidiary of the Company or the Parent (other than the Company) on its
Equity Interests that is paid pro rata to all holders of such Equity Interests.
The provisions of clause (a) under this Section 4.9 shall not prohibit:
(5) Restricted Payments pursuant to this clause
(c)(5) in an aggregate amount not to exceed $25 million.
(d) The full amount of any Restricted Payment made pursuant to
the foregoing clauses (c)(2), (c)(3), (c)(4) and (c)(5) (but not pursuant to
clause (c)(1)), however, shall be counted as Restricted Payments for purposes of
the calculation of the aggregate amount of Restricted Payments available to be
made referred to in clause (a)(3) of this Section 4.9.
(e) For purposes of this Section 4.9, the amount of any
Restricted Payment made or returned, if other than in cash, shall be the fair
market value thereof, as determined in the good faith reasonable judgment of the
Board of Directors, unless stated otherwise, at the time made or returned, as
applicable. Not later than (1) 45 days following the end of any calendar quarter
in which any Restricted Payment is made, and (2) 10 days after the making of any
Restricted Payment which, when added to the sum of all Restricted Payments made
in a calendar quarter, would cause the aggregate of all Restricted Payments made
in such quarter to exceed $5 million (other than payments of quarterly dividends
on Capital Stock of the Company or the Parent in the ordinary course of
business), the Parent and the Company shall deliver an Officers' Certificate to
the Trustee describing in reasonable detail the nature of such Restricted
Payments, stating the amount of such Restricted Payments, stating in reasonable
detail the provisions of this Indenture pursuant to which such Restricted
Payments were made and certifying that such Restricted Payments were made in
compliance with the terms of this Indenture.
SECTION 4.10 LIMITATION ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS AFFECTING
SUBSIDIARIES
The Company and the Parent shall not, and shall not permit any of their
respective Subsidiaries to, directly or indirectly, create, assume or suffer to
exist any consensual restriction on the ability of any of their respective
Subsidiaries to pay dividends or make other distributions to or on behalf of, or
to pay any obligation to or on behalf of, or otherwise to transfer assets or
property to or on behalf of, or make or pay loans or advances to or on behalf of
the Company or the Parent or any of their respective Subsidiaries, except:
(1) restrictions imposed by the Notes or this
Indenture or by other Indebtedness ranking pari passu with the Notes or the
Guarantees, as applicable; provided, that such restrictions are not more
restrictive, taken as a whole, than those imposed by this Indenture and the
Notes;
(2) restrictions imposed by applicable law;
(3) existing restrictions under Existing
Indebtedness;
(4) restrictions under any Acquired Indebtedness not
incurred in violation of this Indenture or any agreement (including any Equity
Interest) relating to any property, asset, or business acquired by the Company
or the Parent or any of their respective Subsidiaries, which restrictions in
each case existed at the time of acquisition, were not put in place in
connection with or in anticipation of such acquisition and are not applicable to
any Person, other than the Person acquired, or to any property, asset or
business, other than the property, assets and business so acquired;
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(5) restrictions imposed by Indebtedness incurred
under the Credit Agreement permitted to be incurred pursuant to Section 4.7;
provided, that such restrictions or requirement are no more restrictive in any
material respect than that imposed by the Credit Agreement as of the Issue Date,
(6) restrictions with respect solely to any
Subsidiary of either or both of the Company or the Parent imposed pursuant to a
binding agreement which has been entered into for the sale or disposition of all
of the Equity Interests or assets of such Subsidiary; provided, that such
restrictions apply solely to the Equity Interests or assets of such Subsidiary
which are being sold;
(7) in connection with and pursuant to permitted
Refinancings, replacements of restrictions imposed pursuant to clauses (1), (3)
or (4) or this clause (7) of this Section 4.10 that are not more restrictive in
any material respect than those being replaced and do not apply to any other
Person or assets than those that would have been covered by the restrictions in
the Indebtedness so refinanced;
(8) customary provisions restricting subletting or
assignment of any lease entered into in the ordinary course of business,
consistent with industry practice;
(9) any asset subject to a Lien which is not
prohibited to exist with respect to such asset pursuant to the terms of this
Indenture may be subject to customary restrictions on the transfer or
disposition thereof pursuant to such Lien; and
(10) restrictions imposed by Indebtedness incurred
under clause (a)(2) of Section 4.7 hereof (whether such restrictions are
contained in the terms of such Indebtedness or are required by the terms of
agreements governing such Indebtedness to be contained in the organizational
documents governing the Subsidiary which incurred such Indebtedness).
SECTION 4.11 LIMITATION ON LINES OF BUSINESS
Neither the Company, the Parent, nor any of their respective
Subsidiaries or Unrestricted Subsidiaries shall directly or indirectly engage to
any substantial extent in any line or lines of business activity other than that
which, in the reasonable good faith judgment of the Board of Directors, is a
Related Business.
SECTION 4.12 LIMITATION ON TRANSACTIONS WITH AFFILIATES
Neither the Company, the Parent nor any of their respective
Subsidiaries shall be permitted on or after the Issue Date to enter into or
suffer to exist any contract, agreement, arrangement or transaction with any
Affiliate (an "Affiliate Transaction"), or any series of related Affiliate
Transactions, (other than Exempted Affiliate Transactions), (1) unless it is
determined that the terms of such Affiliate Transaction are fair and reasonable
to the Company or the Parent, as the case may be, and no less favorable to the
Company or the Parent than could have been obtained in an arm's length
transaction with a non-Affiliate, and (2) if involving consideration to either
party in excess of $2 million, unless such Affiliate Transaction(s) is evidenced
by an Officers' Certificate addressed and delivered to the Trustee certifying
that such Affiliate Transaction (or Transactions) has been approved by a
majority of the members of the Parent's Board of Directors that are
disinterested in such transaction, if there are any directors who are so
disinterested, and (3) if involving consideration to either party in excess of
$10 million, unless in addition the Company or the Parent, prior to the
consummation thereof, obtains a written favorable opinion as to the fairness of
such transaction to the Company or the Parent from a financial point of view
from an independent investment banking firm of national reputation in the United
States or, if pertaining to a matter for which such investment banking firms do
not customarily render such opinions, an appraisal or valuation firm of national
reputation in the United States.
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SECTION 4.15 LIMITATION ON ISSUANCES OF GUARANTEES BY SUBSIDIARIES
The Company shall not permit any of its Subsidiaries and the Parent
shall not permit any of its Subsidiaries, directly or indirectly, to guarantee
any Indebtedness of either or both of the Company or the Parent or of any
Guarantor, including any Indebtedness under the Credit Agreement that ranks
equally with or subordinate in right of payment to the Notes ("Guaranteed
Indebtedness"), unless:
(1) such Subsidiary simultaneously executes and
delivers a supplemental indenture to this Indenture providing for a guarantee of
the Notes by such Subsidiary, and
(2) such Subsidiary waives and agrees not to, in any
manner whatsoever, claim or take the benefit or advantage of, any rights of
reimbursement, indemnity or subrogation or any other rights against the Company,
the Parent or any other Subsidiary as a result of any payment by such Subsidiary
under its Guarantee;
provided, that this provision shall not be applicable to any guarantee of any
Subsidiary that existed at the time such Person became a Subsidiary and which
was not incurred in connection with, or in contemplation of, such Person
becoming a Subsidiary. If the Guaranteed Indebtedness ranks equally in right of
payment with the Notes, then the guarantee of such Guaranteed Indebtedness shall
rank equally in right of payment with, or subordinate in right of payment to,
the Guarantee. If the Guaranteed Indebtedness is subordinate in right of payment
to the Notes, then the guarantee of such Guaranteed Indebtedness shall be
subordinated in right of payment to the Guarantee at least to the extent that
the Guaranteed Indebtedness is subordinated in right of payment to the Notes.
SECTION 4.16 LIMITATION ON LAYERING INDEBTEDNESS
The Company or the Parent shall not and shall not permit any of their
respective Subsidiaries to incur any Indebtedness that is contractually
subordinated in right of payment to any of either or both of the Company's or
the Parent's Indebtedness or the Indebtedness of any Guarantor unless such
Indebtedness is as contractually subordinated in right of payment to the Notes
or such Guarantor's Guarantee, as applicable, at least to the same extent as it
is to such other Indebtedness.
SECTION 4.17 RESTRICTION ON ACTIVITIES OF FINANCE
Notwithstanding anything in this Indenture to the contrary, Finance
shall not (a) own any material assets, (b) become liable for any obligations or
Indebtedness other than the Notes (including any additional Notes incurred
pursuant to Section 4.7 hereof) pursuant to the terms of this Indenture, or (c)
engage in any business activities other than the co-issuance of the Notes
(including any additional Notes incurred pursuant to Section 4.7 hereof).
SECTION 4.18 LIMITATION ON STATUS AS INVESTMENT COMPANY
The Company and the Parent and their respective Subsidiaries shall be
prohibited from being required to register as an "investment company" (as that
term is defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act")), or from otherwise becoming subject to regulation
under the Investment Company Act.
SECTION 4.19 MAINTENANCE OF PROPERTIES AND INSURANCE
The Company and the Guarantors shall cause all material properties used
or useful to the conduct of their business and the business of each of their
Subsidiaries to be maintained and kept in good condition, repair and working
order (reasonable wear and tear excepted) and supplied with all necessary
equipment and shall cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in their reasonable
judgment may be necessary, so that the business carried on in connection
therewith may be properly conducted at all times; provided, however, that
nothing in this Section 4.20 shall prevent the Company or any Guarantor from
discontinuing any operation or maintenance of any of such properties, or
disposing of any of them,
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if such discontinuance or disposal is (a) (i) in the judgment of the Board of
Directors of the Company, desirable in the conduct of the business of such
entity and (ii) would not have a material adverse effect on the ability of the
Company and the Guarantors to satisfy their obligations under the Notes, the
Guarantees and this Indenture, and, to the extent applicable, (b) as otherwise
permitted under Section 4.13 hereof.
The Company and Guarantors shall provide, or cause to be provided, for
themselves and each of their Subsidiaries, insurance (including appropriate
self-insurance) against loss or damage of the kinds that, in the reasonable,
good faith opinion of the Board of Directors of the Company is adequate and
appropriate for the conduct of the business of the Company, the Guarantors and
such Subsidiaries.
SECTION 4.20 CORPORATE EXISTENCE
Subject to Section 4.14 and Article V hereof, the Company and the
Parent shall do or cause to be done all things necessary to preserve and keep in
full force and effect (i) its corporate existence, and the corporate,
partnership or other existence of each of their respective Subsidiaries, in
accordance with the respective organizational documents (as the same may be
amended from time to time) of the Company, the Parent or any such Subsidiary and
(ii) the rights (charter and statutory), licenses and franchises of the Company,
the Parent and their respective Subsidiaries; provided, however, that the
Company and the Parent shall not be required to preserve any such right, license
or franchise, or the corporate, partnership or other existence of any of their
respective Subsidiaries, if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company, the Parent and their respective Subsidiaries, taken as a whole, and
that the loss thereof would not have a material adverse effect on the ability of
the Company and the Guarantors to satisfy their obligations under the Notes, the
Guarantees and this Indenture.
SECTION 5.1 MERGER, CONSOLIDATION OR SALE OF ASSETS
Neither the Company nor the Parent shall consolidate with or merge with
or into another Person or, directly or indirectly, sell, lease, convey or
transfer all or substantially all of their assets (such amounts to be computed
on a consolidated basis), whether in a single transaction or a series of related
transactions, to another Person or group of affiliated Persons, unless:
(a) either (1) the Company or the Parent, as applicable, is
the continuing entity or (2) the resulting, surviving or transferee entity, as
applicable, is an entity organized under the laws of the United States, any
state thereof or the District of Columbia and expressly assumes by supplemental
indenture all of the Company's or the Parent's, as applicable, obligations in
connection with the Notes or the Guarantee, as applicable;
(b) no Default or Event of Default shall exist or shall occur
immediately after giving effect on a pro forma basis to such transaction;
(c) unless such transaction is solely the merger of the
Company or the Parent and one of a Wholly Owned Subsidiaries which is also a
Guarantor for the purpose of reorganization into another jurisdiction and which
transaction is not for the purpose of evading this provision and not in
connection with any other transaction, immediately after giving effect to such
transaction on a pro forma basis, the consolidated resulting, surviving or
transferee entity would immediately thereafter be permitted to incur at least
$1.00 of additional Indebtedness pursuant to the Debt Incurrence Ratio and
clauses (a)(1) or (a)(2) of Section 4.7 hereof; and
(d) each Guarantor shall have, if necessary, confirmed in
writing that its Guarantee shall apply to the obligations of the Company, or the
surviving entity in accordance with the Notes and this Indenture.
SECTION 5.2 SUCCESSOR CORPORATION SUBSTITUTED
Upon any consolidation or merger, the successor entity formed by such
consolidation or into which the Company or the Parent is merged shall succeed to
and (except in the case of a lease or any transfer of all or
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substantially all of the Company's or the Parent's assets) be substituted for,
and may exercise every right and power of, the Company or the Parent, as
applicable, under this Indenture with the same effect as if such successor
entity had been named therein as the Company or the Parent, as applicable, and
(except in the case of a lease or any transfer of all or substantially all of
the Company's or the Parent's assets) the Company or the Parent, as applicable,
shall be released from the obligations under this Indenture, the Notes and the
Guarantee, as applicable, except with respect to any obligations that arise
from, or are related to, such transaction.
For purposes of the foregoing, the transfer (by lease, assignment, sale
or otherwise) of all or substantially all of the properties and assets of one or
more Subsidiaries, the Company's or the Parent's interest in which constitutes
all or substantially all of the Company's or the Parent's properties and assets,
shall be deemed to be the transfer of all or substantially all of the Company's
or the Parent's properties and assets.
SECTION 6.1.2 EVENTS OF DEFAULT
An "Event of Default," wherever used herein, means any one of the
following events:
(3) the Company's failure or the failure by the
Parent or any of their respective Subsidiaries to observe or perform any other
covenant or agreement contained in the Notes or this Indenture and, except for
the provisions under Section 4.13, 4.14 and 5.1, the continuance of such failure
for a period of 30 days;
(4) a court having jurisdiction in the premises
enters a decree or order for (a) relief in respect of the Company, the Parent or
any of their respective Significant Subsidiaries in an involuntary case under
any applicable Bankruptcy Law now or hereafter in effect, (b) appointment of a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official of the Company, the Parent or any of their respective Significant
Subsidiaries or for all or substantially all of the property and assets of the
Company, the Parent or any of their respective Significant Subsidiaries or (c)
the winding up or liquidation of the affairs of the Company, the Parent or any
Significant Subsidiary and, in each case, such decree or order shall remain
unstayed and in effect for a period of 60 consecutive days; or,
(5) the Company, the Parent or any of their
respective Significant Subsidiaries (a) commences a voluntary case under any
applicable Bankruptcy Law now or hereafter in effect, or consents to the entry
of an order for relief in an involuntary case under any such law, (b) consents
to the appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Company, the Parent
or any of their respective Significant Subsidiaries or for all or substantially
all of the property and assets of the Company, the Parent or any of their
respective Significant Subsidiaries or (c) effects any general assignment for
the benefit of creditors;
(6) a default occurs (after giving effect to any
waivers, amendments, applicable grace periods or any extension of any maturity
date) in any of the Company's or the Parent's Indebtedness or the Indebtedness
of any of their respective Subsidiaries with an aggregate amount outstanding in
excess of $7.5 million (or if such Indebtedness is Non-Recourse Indebtedness,
$20 million) (a) resulting from the obligor's failure to pay principal of or
interest on such Indebtedness, or (b) as a result of such default, the maturity
of such Indebtedness has been accelerated prior to its stated maturity;
(7) final unsatisfied judgments not covered by
insurance aggregating in excess of $7.5 million, at any one time rendered
against the Company or the Parent or any of their respective Subsidiaries and
not stayed, bonded or discharged within 60 days; and
(8) any Guarantee of a Guarantor ceases to be in full
force and effect or becomes unenforceable or invalid or is declared null and
void (other than in accordance with the terms of the Guarantee and this
Indenture) or any Guarantor denies or disaffirms its Obligations under its
Guarantee.
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The Depositary for the Tender Offer and the Consent Solicitation is:
GLOBAL BONDHOLDER SERVICES CORPORATION
By Facsimile:
(For Eligible Institutions Only):
(212) 430-3775
Confirm by Telephone:
(212) 430-3774
By Mail, Hand or Overnight Courier:
65 Broadway - Suite 704
New York, NY 10006
Any questions or requests for assistance may be directed to
Banc of America Securities LLC at the address and telephone number set forth
below. Requests for additional copies of this Offer to Purchase or the Letter of
Transmittal may be directed to the Information Agent. Requests for copies of the
Indenture and the form of the Supplemental Indenture may also be directed to the
Information Agent. Beneficial owners may also contact their Custodian for
assistance concerning the Tender Offer and the Consent Solicitation.
The Information Agent for the Tender Offer and the Consent Solicitation is:
GLOBAL BONDHOLDER SERVICES CORPORATION
65 Broadway - Suite 704
New York, NY 10006
Attn: Corporate Actions
Banks and Brokers call: (212) 430-3774
Toll free: (866) 873-6300
The Dealer Manager and the Solicitation Agent for the Tender Offer
and the Consent Solicitation is:
BANC OF AMERICA SECURITIES LLC
214 N. Tryon Street, 17th Floor
Charlotte, NC 28255
Attention: High Yield Special Products
(888) 292-0070 (U.S. Toll Free)
(704) 388-4813 (Collect)