-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HMBjqrW3x2/OPgbOcg3ZmIwjpbyVsPeU4uKNFflZBeFmBeUYgWmgNo1R//aUcpyu e5gvY3gSOyAyiCaTcBb5/g== 0000950144-97-011961.txt : 19971114 0000950144-97-011961.hdr.sgml : 19971114 ACCESSION NUMBER: 0000950144-97-011961 CONFORMED SUBMISSION TYPE: S-4 PUBLIC DOCUMENT COUNT: 15 FILED AS OF DATE: 19971112 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: REGAL CINEMAS INC CENTRAL INDEX KEY: 0000905035 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MOTION PICTURE THEATERS [7830] IRS NUMBER: 621412720 STATE OF INCORPORATION: TN FISCAL YEAR END: 0102 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-40019 FILM NUMBER: 97714757 BUSINESS ADDRESS: STREET 1: 7132 COMMERCIAL PARK DR CITY: KNOXVILLE STATE: TN ZIP: 37918 BUSINESS PHONE: 4239221123 MAIL ADDRESS: STREET 1: 7132 COMMERCIAL PARK DR CITY: KNOXVILLE STATE: TN ZIP: 37918 S-4 1 REGAL CINEMAS FORM S-4 1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 12, 1997 REGISTRATION NO. 333-[ ] ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------------- FORM S-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 --------------------- REGAL CINEMAS, INC. (Exact name of Registrant as specified in its charter) TENNESSEE 7830 62-1412720 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.)
7132 COMMERCIAL PARK DRIVE KNOXVILLE, TENNESSEE 37918 (423) 922-1123 (Address, including zip code, and telephone number, including area code, of Registrant's principal executive offices) --------------------- HERBERT S. SANGER, JR. WAGNER, MYERS & SANGER, P.C. 1801 FIRST TENNESSEE PLAZA KNOXVILLE, TENNESSEE 37901-1308 (423) 525-4600 (Address, including zip code, and telephone number, including area code, of agent for service of process) --------------------- Copies of all communications to: F. MITCHELL WALKER, JR. BASS, BERRY & SIMS PLC FIRST AMERICAN CENTER NASHVILLE, TENNESSEE 37238 (615) 742-6200 --------------------- APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after this Registration Statement becomes effective. If the securities being registered on this form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. [ ] CALCULATION OF REGISTRATION FEE
======================================================================================================= PROPOSED AMOUNT MAXIMUM AMOUNT OF TITLE OF EACH CLASS OF TO BE AGGREGATE REGISTRATION SECURITIES TO BE REGISTERED REGISTERED OFFERING PRICE FEE - ------------------------------------------------------------------------------------------------------- 8 1/2% Senior Subordinated Notes due October 1, 2007......................... $125,000,000 $125,000,000 $37,879 =======================================================================================================
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SUCH SECTION 8(A), MAY DETERMINE. ================================================================================ 2 INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE. SUBJECT TO COMPLETION, DATED NOVEMBER 12, 1997 PRELIMINARY PROSPECTUS OFFER TO EXCHANGE ALL OUTSTANDING 8 1/2% SENIOR SUBORDINATED NOTES DUE OCTOBER 1, 2007 $125,000,000 PRINCIPAL AMOUNT OUTSTANDING FOR 8 1/2% EXCHANGE SENIOR SUBORDINATED NOTES DUE OCTOBER 1, 2007 OF REGAL CINEMAS LOGO THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON , 1997 --------------------- Regal Cinemas, Inc., a Tennessee corporation (the "Company" or "Regal"), hereby offers, upon the terms and subject to the conditions set forth in this Prospectus and the accompanying letter of transmittal (the "Letter of Transmittal," and together with this Prospectus, the "Exchange Offer"), to exchange $1,000 principal amount of its 8 1/2% Exchange Senior Subordinated Notes due October 1, 2007 (the "Exchange Notes"), which have been registered under the Securities Act of 1933, as amended (the "Securities Act"), pursuant to a Registration Statement (as defined herein) of which this Prospectus constitutes a part, for each $1,000 principal amount of the outstanding 8 1/2% Senior Subordinated Notes due October 1, 2007 (the "Old Notes") of the Company, of which $125,000,000 principal amount is outstanding. The Exchange Notes and the Old Notes are collectively referred to herein as the "Notes." The Company will accept for exchange any and all Old Notes that are validly tendered on or prior to 5:00 p.m., New York City time, on the date the Exchange Offer expires, which will be , 1997 (the "Expiration Date"), unless the Exchange Offer is extended. Tenders of Old Notes may be withdrawn at any time prior to 5:00 p.m., New York City time, on the business day prior to the Expiration Date, unless previously accepted for payment. The Exchange Offer is not conditioned upon any minimum principal amount of Old Notes being tendered for exchange. However, the Exchange Offer is subject to certain conditions which may be waived by the Company and to the terms and provisions of the Registration Rights Agreement (as defined herein). See "The Exchange Offer." Old Notes may be tendered only in denominations of $1,000 and integral multiples thereof. The Exchange Notes will be obligations of the Company entitled to the benefits of the Indenture (as defined herein). The form and terms of the Exchange Notes are the same in all material respects as the form and terms of the Old Notes except that the Exchange Notes have been registered under the Securities Act and will not contain terms restricting the transfer thereof. Following the completion of the Exchange Offer, none of the Notes will be entitled to the benefits of the Registration Rights Agreement relating to contingent increases in the interest rate provided for pursuant thereto. See "The Exchange Offer." --------------------- INVESTMENT IN THE NOTES INVOLVES SIGNIFICANT RISKS DISCUSSED UNDER "RISK FACTORS" ON PAGE 8 WHICH SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS. --------------------- The Exchange Notes will bear interest from September 24, 1997. Holders of Old Notes whose Old Notes are accepted for exchange will be deemed to have waived the right to receive any payment in respect of interest on the Old Notes accrued from September 24, 1997 to the date of the issuance of the Exchange Notes. Interest on the Exchange Notes is payable semi-annually on April 1 and October 1 of each year, commencing April 1, 1998, accruing from September 24, 1997 at a rate of 8 1/2% per annum. The Notes are redeemable at the option of the Company in whole or in part, at any time on or after October 1, 2002, at the redemption prices set forth herein plus accrued interest to the date of redemption. Upon a Change of Control (as defined herein), each holder of the Notes will have the right to require the Company to repurchase such holder's Notes at a price equal to 101% of the principal amount of the Notes plus accrued and unpaid interest to the date of repurchase. (Continued on next page) --------------------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. --------------------- The date of this Prospectus is , 1997. 3 Old Notes initially sold to Qualified Institutional Buyers (as defined in Rule 144A under the Securities Act) and to certain offshore purchasers (as defined in Regulation S under the Securities Act) were represented by two global Notes in definitive fully registered form without coupons, registered in the name of a nominee of The Depository Trust Company ("DTC"), as depositary. The Exchange Notes exchanged for Old Notes represented by the global Note will be represented by a single, global Exchange Note in definitive fully registered form without coupons, registered in the name of the nominee of DTC, as depositary. See "Description of Exchange Notes -- Form and Denomination." The Old Notes are and the Exchange Notes will be general unsecured obligations of the Company, subordinated in right of payment to all existing and future senior indebtedness of the Company. In addition, the Notes will be effectively subordinated to all liabilities of the Company's subsidiaries, including any liabilities of such subsidiaries as guarantors of senior indebtedness or other obligations of the Company. As of October 2, 1997, the Company had $123.6 million of senior indebtedness outstanding, and the Company's subsidiaries had other liabilities of $10.1 million, consisting primarily of trade payables and accrued expenses. See "Use of Proceeds" and "Capitalization." Based on no-action letters issued by the staff of the Securities and Exchange Commission (the "Commission") to third parties, the Company believes the Exchange Notes issued pursuant to the Exchange Offer may be offered for resale, resold and otherwise transferred by holders thereof (other than any such holder that is an "affiliate" of the Company within the meaning of Rule 405 under the Securities Act) without compliance with the registration and prospectus delivery provisions of the Securities Act provided that such Exchange Notes are acquired in the ordinary course of such holders' business and such holders have no arrangements with any person to participate in the distribution of such Exchange Notes. Each broker-dealer that receives Exchange Notes for its own account pursuant to the Exchange Offer may be a statutory underwriter and must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Notes. The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. This Prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of Exchange Notes received in exchange for Old Notes where such Old Notes were acquired by such broker-dealer as a result of market-making activities or other trading activities. The Company has agreed that, for a period of 90 days after the Expiration Date, or such shorter period as will terminate when all Old Notes acquired by broker-dealers for their own accounts as a result of market-making activities or other trading activities have been exchanged for Exchange Notes and resold by such broker-dealers, it will make this Prospectus and any amendment or supplement to this Prospectus available to any broker-dealer for use in connection with any such resale. See "Plan of Distribution." The Company will not receive any proceeds from this offering, and no underwriter is being utilized in connection with the Exchange Offer. THE EXCHANGE OFFER IS NOT BEING MADE TO, NOR WILL THE COMPANY ACCEPT SURRENDERS FOR EXCHANGE FROM, HOLDERS OF OLD NOTES IN ANY JURISDICTION IN WHICH THE EXCHANGE OFFER OR THE ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE WITH THE SECURITIES OR BLUE SKY LAWS OF SUCH JURISDICTION. WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY. The Exchange Notes are a new issue of securities for which there is currently no trading market. If the Exchange Notes are traded after their initial issuance, they may trade at a discount from their principal amount, depending upon prevailing interest rates, the market for similar securities and other factors, including general economic conditions and the financial condition and performance of, and prospects for, the Company. Goldman, Sachs & Co. and Lehman Brothers Inc. ii 4 have advised the Company that they currently intend to make a market in the Notes. However, they are not obligated to do so, and any market-making activity with respect to the Old Notes or the Exchange Notes may be discontinued at any time without notice. Accordingly, there can be no assurance as to the development or liquidity of any market for the Notes. The Company does not intend to apply for listing of the Exchange Notes on any securities exchange or for quotation through the National Association of Securities Dealers Automated Quotation System. AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files reports, proxy statements and other information with the Commission. Such reports, proxy statements and other information filed by the Company may be inspected and copied at the public reference facilities of the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the following regional offices: Seven World Trade Center, 13th Floor, New York, New York 10048; and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661; and at the offices of The Nasdaq National Market's National Market System, 1735 K Street, N.W., Washington, D.C. 20006; and copies of such material can be obtained from the Public Reference Section of the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. In addition, such material can also be obtained from the Commission's Web site at http://www.sec.gov. This Prospectus constitutes a part of a registration statement (the "Registration Statement") filed by the Company with the Commission under the Securities Act. As permitted by the rules and regulations of the Commission, this Prospectus does not contain all of the information contained in the Registration Statement and the exhibits and schedules thereto and reference is hereby made to the Registration Statement and the exhibits and schedules thereto for further information with respect to the Company and the securities offered hereby. Statements contained herein concerning the provisions of any documents filed as an exhibit to the Registration Statement or otherwise filed with the Commission are not necessarily complete, and in each instance reference is made to the copy of such document so filed. Each such statement is qualified in its entirety by such reference. INCORPORATION BY REFERENCE The following documents filed by the Company with the Commission are incorporated in this Prospectus by reference and hereby made a part hereof: 1. The Company's Annual Report on Form 10-K for the fiscal year ended January 2, 1997. 2. The Company's Quarterly Reports on Form 10-Q for the fiscal quarters ended April 3, 1997, July 3, 1997 and October 2, 1997. 3. The Company's Current Report on Form 8-K, dated August 14, 1997, as amended by a Current Report on Form 8-K/A, dated September 10, 1997. 4. The Company's Current Report on Form 8-K, dated September 25, 1997. 5. The Company's Current Report on Form 8-K, dated October 2, 1997. Each document or report filed by the Corporation pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date hereof and prior to the termination of any offering of securities made by this Prospectus shall be deemed to be incorporated by reference into this Prospectus and to be a part of this Prospectus from the date of filing of such document. Any statement contained in a document incorporated by reference, or deemed to be incorporated by reference, herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is incorporated by reference, or deemed to be incorporated by reference, herein modifies or iii 5 supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS ARE AVAILABLE UPON REQUEST FROM LEWIS FRAZER III, EXECUTIVE VICE PRESIDENT, CHIEF FINANCIAL OFFICER, SECRETARY AND TREASURER, REGAL CINEMAS, INC., 7132 COMMERCIAL PARK DRIVE, KNOXVILLE, TENNESSEE 37918, (423) 922-1123. IN ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD BE MADE BY , 1997. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS AND THE ACCOMPANYING LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE EXCHANGE AGENT. NEITHER THE DELIVERY OF THIS PROSPECTUS OR THE ACCOMPANYING LETTER OF TRANSMITTAL, OR BOTH TOGETHER, NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF. NEITHER THIS PROSPECTUS NOR THE ACCOMPANYING LETTER OF TRANSMITTAL, OR BOTH TOGETHER, CONSTITUTES AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. iv 6 PROSPECTUS SUMMARY The following summary is qualified in its entirety by reference to the more detailed information and financial statements included elsewhere in this Prospectus. Unless the context otherwise requires, references in this Prospectus to the "Company" or "Regal" include the Company and its subsidiaries. Regal's results of operations for or as of the end of any year refer to its fiscal year ended or ending on the Thursday closest to December 31. Unless otherwise indicated, the financial information and other statistical information (including information regarding the number of theatres and/or screens operated or under development or construction by the Company) of the Company included elsewhere in this Prospectus have been restated to include the results of operations of Litchfield Theatres, Ltd. ("Litchfield"), Neighborhood Entertainment, Inc. ("Neighborhood"), Georgia State Theatres, Inc. ("Georgia State") and Cobb Theatres, L.L.C. ("Cobb Theatres"), which were acquired by the Company on June 15, 1994, April 17, 1995, May 30, 1996 and July 31, 1997, respectively, and which were accounted for under the pooling of interests method. THE COMPANY Regal is the third largest motion picture exhibitor in the United States based upon the number of screens in operation. At October 2, 1997, the Company operated 238 multiplex theatres with an aggregate of 2,111 screens in 22 states. Since its inception, Regal has increased its average screens per location from 4.8 to 8.9 screens, which management believes is among the highest in the industry, as compared to the average of approximately 5.7 screens for the five largest motion picture exhibitors at May 1, 1996. The Company develops, acquires and operates multiplex theatres in mid-size metropolitan markets and suburban growth areas of larger metropolitan markets. At October 2, 1997, Regal had 19 new theatres with 333 screens under construction and 17 screens under construction at four existing theatres. The Company seeks to locate theatres in markets that it believes are underscreened or that are served by older theatre facilities. The Company also seeks to locate each theatre where it will be the sole or dominant exhibitor within a particular geographic film licensing zone. Management believes that approximately 72% of the Company's theatres are located in film licensing zones in which Regal is the sole exhibitor. On July 31, 1997, the Company completed the acquisition of the business of Cobb Theatres, L.L.C. ("Cobb Theatres") through the mergers of three of the Company's wholly-owned subsidiaries with and into three subsidiaries of Cobb Theatres and the acquisition by the Company of all the partnership interests of Tricob Partnership, in accordance with the terms of an Agreement and Plan of Merger dated June 11, 1997 (the "Cobb Theatres Acquisition"). The Cobb Theatres Acquisition was accounted for as a pooling of interests. The aggregate consideration paid by the Company was 2,837,594 shares of the Company's Common Stock. The Company also assumed approximately $110 million of liabilities, including $85 million aggregate principal amount outstanding of 10 5/8% Senior Secured Notes (the "Cobb Notes"). Following the Cobb Theatres Acquisition, the Company completed a tender offer and consent solicitation for the Cobb Notes (the "Tender Offer"). All but $170,000 principal amount of the Cobb Notes were repurchased; and the restrictive covenants and security for the Cobb Notes were released. Regal initially financed the purchase price of the Cobb Notes under a short-term credit facility (the "Bank Tender Facility") and subsequently repaid amounts borrowed thereunder with proceeds from the offering of the Old Notes. The balance of the proceeds from the offering of the Old Notes was applied to reduce amounts outstanding under the Former Bank Revolving Credit Facility (as defined herein). On October 8, 1997, the Company entered into a new bank revolving credit facility (the "Bank Revolving Credit Facility") which permits borrowings of up to $250 million. The Company was incorporated under the laws of the State of Tennessee in November 1989. The Company's principal offices are located at 7132 Commercial Park Drive, Knoxville, Tennessee 37918, and its telephone number is (423) 922-1123. 1 7 SUMMARY OF THE TERMS OF THE EXCHANGE OFFER The Exchange Offer relates to the exchange of up to $125,000,000 aggregate principal amount of Old Notes for up to an equal aggregate principal amount of Exchange Notes. The Exchange Notes will be obligations of the Company entitled to the benefits of the Indenture. The form and terms of the Exchange Notes are the same as the form and terms of the Old Notes except that the Exchange Notes have been registered under the Securities Act and will not contain terms restricting the transfer thereof (and hence are not entitled to the benefits of the Registration Rights Agreement relating to the contingent increases in the interest rate provided for pursuant thereto). See "Description of Exchange Notes." THE EXCHANGE OFFER......... $1,000 principal amount of Exchange Notes will be issued in exchange for each $1,000 principal amount of Old Notes validly tendered pursuant to the Exchange Offer. As of the date hereof, $125,000,000 in aggregate principal amount of Old Notes are outstanding. The Company will issue the Exchange Notes to tendering holders of Old Notes promptly after the Expiration Date. RESALE..................... Based on an interpretation by the staff of the Commission, set forth in no-action letters to third parties, the Company believes that the Exchange Notes issued pursuant to the Exchange Offer generally will be freely transferable by the holders thereof without registration or any prospectus delivery requirement under the Securities Act, except that a "dealer" or any "affiliate" of the Company, as such terms are defined under the Securities Act, that exchanges Old Notes held for its own account (a "Restricted Holder") may be required to deliver copies of this Prospectus in connection with any resale of the Exchange Notes issued in exchange for such Old Notes. See "The Exchange Offer -- General" and "Plan of Distribution." EXPIRATION DATE............ 5:00 p.m., New York City time, on , 1997, unless the Exchange Offer is extended, in which case the term "Expiration Date" means the latest date and time to which the Exchange Offer is extended. See "The Exchange Offer -- Expiration Date; Extensions; Amendments." ACCRUED INTEREST ON THE EXCHANGE NOTES AND THE OLD NOTES................ The Exchange Notes will bear interest from September 24, 1997. Holders of Old Notes whose Old Notes are accepted for exchange will be deemed to have waived the right to receive any payment in respect of interest on such Old Notes accrued from September 24, 1997 to the date of the issuance of the Exchange Notes. Consequently, holders who exchange their Old Notes for Exchange Notes will receive the same interest payment on April 1, 1998 (the first interest payment date with respect to the Old Notes and the Exchange Notes) that they would have received had they not accepted the Exchange Offer. See "The Exchange Offer -- Interest on the Exchange Notes." CONDITIONS TO THE EXCHANGE OFFER.................... The Exchange Offer is subject to certain conditions, including the Company's reasonable determination that it is advisable to proceed or not to proceed with the Exchange Offer. See "The Exchange Offer -- Conditions." The Exchange Offer is not 2 8 conditioned upon any minimum principal amount of Old Notes being tendered for exchange. No federal or state regulatory requirements must be complied with or approvals obtained in connection with the Exchange Offer, other than applicable requirements under federal and state securities laws. FAILURE TO EXCHANGE OLD NOTES.................... Holders of the Old Notes who do not tender their Old Notes in the Exchange Offer will continue to hold such Old Notes and will be entitled to all the rights and subject to all limitations applicable thereto under the Indenture except for any such rights under the Registration Rights Agreement. To the extent that Old Notes are tendered and accepted in the Exchange Offer, the trading market, if any, for untendered Old Notes could be adversely affected. PROCEDURES FOR TENDERING OLD NOTES................ Each holder of Old Notes wishing to accept the Exchange Offer must complete, sign and date the accompanying Letter of Transmittal, or a facsimile thereof, in accordance with the instructions contained herein and therein, and mail or otherwise deliver such Letter of Transmittal, or such facsimile, together with the Old Notes to be exchanged and any other required documentation to IBJ Schroder Bank & Trust Company, as Exchange Agent, at the address set forth herein and therein or effect a tender of Old Notes pursuant to the procedures for book-entry transfer as provided for herein. See "The Exchange Offer -- Procedures for Tendering" and "-- Book-entry Transfer." SPECIAL PROCEDURES FOR BENEFICIAL HOLDERS....... Any beneficial holder whose Old Notes are registered in the name of his broker, dealer, commercial bank, trust company or other nominee and who wishes to tender in the Exchange Offer should contact such registered holder promptly and instruct such registered holder to tender on his behalf. If such beneficial holder wishes to tender on his own behalf, such beneficial holder must, prior to completing and executing the Letter of Transmittal and delivering his Old Notes, either make appropriate arrangements to register ownership of the Old Notes in such holder's name or obtain a properly completed bond power from the registered holder. The transfer of record ownership may take considerable time. Persons holding Old Notes through The Depository Trust Company ("DTC") and wishing to accept the Exchange Offer must do so pursuant to the DTC's Automated Tender Offer Program ("ATOP") System by which each tendering participant will agree to be bound by the Letter of Transmittal. See "The Exchange Offer -- Procedures for Tendering" and "-- Book-entry Transfer." GUARANTEED DELIVERY PROCEDURES............... Holders of Old Notes who wish to tender their Old Notes and whose Old Notes are not immediately available or who cannot deliver their Old Notes and a properly completed Letter of Transmittal or any other documents required by the Letter of 3 9 Transmittal to the Exchange Agent prior to the Expiration Date may tender their Old Notes according to the guaranteed delivery procedures set forth in "The Exchange Offer -- Guaranteed Delivery Procedures." WITHDRAWAL RIGHTS.......... Tenders of Old Notes may be withdrawn at any time prior to 5:00 p.m., New York City time, on the business day prior to the Expiration Date, unless previously accepted for exchange. Any such notice of withdrawal must (i) specify the name of the Person having deposited the Old Notes to be withdrawn (the "Depositor"), (ii) identify the Old Notes to be withdrawn (including the certificate number or numbers and principal amount of such Old Notes), (iii) be signed by the Depositor in the same manner as the original signature on the Letter of Transmittal by which such Old Notes were tendered (including any required signature guarantees) or be accompanied by documents of transfer sufficient to have the Trustee with respect to the Old Notes register the transfer of such Old Notes into the name of the Depositor withdrawing the tender and (iv) specify the name in which any such Old Notes are to be registered, if different from that of the Depositor. See "The Exchange Offer -- Withdrawal of Tenders." ACCEPTANCE OF OLD NOTES AND DELIVERY OF EXCHANGE NOTES.................... Subject to certain conditions (as summarized above in "Expiration Date" and as described more fully in "The Exchange Offer -- Expiration Date; Extensions; Amendments"), the Company will accept for exchange any and all Old Notes which are properly tendered in the Exchange Offer prior to 5:00 p.m., New York City time, on the Expiration Date. The Exchange Notes issued pursuant to the Exchange Offer will be delivered promptly following the Expiration Date. See "The Exchange Offer -- General." CERTAIN FEDERAL INCOME TAX CONSEQUENCES............. The exchange pursuant to the Exchange Offer will generally not be a taxable event for federal income tax purposes. See "Certain Federal Income Tax Consequences of the Exchange Offer." EXCHANGE AGENT............. IBJ Schroder Bank & Trust Company, the Trustee under the Indenture, is serving as exchange agent (the "Exchange Agent") in connection with the Exchange Offer. The mailing address of the Exchange Agent is One State Street Plaza, New York, New York 10004, Attention: Securities Processing, Floor SC-1. See "The Exchange Offer -- Exchange Agent." USE OF PROCEEDS............ There will be no cash proceeds payable to the Company from the issuance of the Exchange Notes pursuant to the Exchange Offer. Net proceeds received by the Company from the sale of the Old Notes were applied to reduce outstanding bank indebtedness under the Bank Tender Facility and the Company's Former Bank Revolving Credit Facility. 4 10 SUMMARY DESCRIPTION OF EXCHANGE NOTES NOTES OFFERED.............. $125,000,000 principal amount of 8 1/2% Exchange Senior Subordinated Notes due October 1, 2007 of the Company. ISSUER..................... Regal Cinemas, Inc. MATURITY DATE.............. October 1, 2007. INTEREST PAYMENT DATES..... April 1 and October 1 of each year, commencing April 1, 1998. OPTIONAL REDEMPTION........ The Notes are redeemable at the option of the Company, in whole or in part, at any time on or after October 1, 2002 at 104.250% of the principal amount thereof, declining ratably to 100% of the principal amount thereof on or after October 1, 2005, plus in each case interest accrued to the redemption date. CHANGE OF CONTROL.......... Upon a Change of Control (as defined herein), each holder of the Notes will have the right to require the Company to repurchase such holder's Notes at a price equal to 101% of the principal amount thereof plus accrued and unpaid interest to the date of repurchase. See "Description of Exchange Notes -- Change of Control." SINKING FUND............... None. RANKING.................... The Notes will be subordinated to all existing and future senior indebtedness of the Company. As of October 2, 1997, the Company had $123.6 million of senior indebtedness outstanding, and the Company's subsidiaries had $10.1 million of other liabilities (consisting primarily of trade payables and accrued expenses). CERTAIN COVENANTS.......... The Indenture contains certain covenants that, among other things, restrict the ability of the Company and its Subsidiaries (as defined herein) to: incur additional indebtedness; pay dividends or make distributions in respect of their capital stock; purchase or redeem capital stock; enter into transactions with stockholders or certain affiliates; or consolidate, merge or sell all or substantially all of the Company's assets, other than in certain transactions between the Company and one or more of its wholly-owned subsidiaries. If the Notes attain Investment Grade Status (as defined herein), all of such covenants will cease to apply, other than certain of the covenants relating to mergers and a sale of substantially all of the Company's assets. All of these limitations are subject to a number of important qualifications. In particular, there are no restrictions on the ability of the Company and its Subsidiaries to make advances to, or invest in, other entities (including unaffiliated entities). See "Risk Factors -- Limitations of Covenants" and "Description of Exchange Notes -- Certain Covenants" and "-- Merger and Sale of Assets." REGISTRATION RIGHTS AGREEMENT................ The Company is obligated to consummate the Exchange Offer or to cause resales of the Old Notes to be registered under the Securities Act and, in the event that (i) the Exchange Offer registration statement has not been filed on or prior to November 23, 1997, (ii) the Exchange Offer registration 5 11 statement is not declared effective on or prior to February 22, 1998; (iii) the Exchange Offer is not consummated or a shelf registration statement is not declared effective on or prior to March 24, 1998; or (iv) any registration statement required by the Registration Rights Agreement is filed and declared effective but shall thereafter cease to be effective without being succeeded immediately by an additional registration statement filed and declared effective the interest rate borne by the Old Notes shall be increased by 0.50% per annum. The aggregate amount of such increase from the original interest rate pursuant to these provisions will in no event exceed 1.00% per annum. Upon the effectiveness of the Exchange Offer registration statement or the consummation of the Exchange Offer or the effectiveness of a shelf registration statement, as the case may be, the interest rate borne by the Old Notes from that time will be reduced to the original interest rate set forth on the cover page of this Prospectus. See "Description of Exchange Notes -- Registration Rights". ABSENCE OF PUBLIC MARKET FOR THE EXCHANGE NOTES... The Exchange Notes will be a new issue of securities for which there is currently no trading market. Although Goldman, Sachs & Co. and Lehman Brothers Inc. have informed the Company that they currently intend to make a market in the Exchange Notes, they are not obligated to do so, and any such market making may be discontinued at any time without notice. Accordingly, there can be no assurance as to the development or liquidity of any market for the Exchange Notes. The Company does not intend to apply for listing of the Exchange Notes on any securities exchange or for quotation on the National Association of Securities Dealers Automated Quotation System ("NASDAQ"). 6 12 SUMMARY CONSOLIDATED FINANCIAL AND OPERATING DATA (DOLLARS IN THOUSANDS) The summary consolidated financial data set forth below as of and for each of the fiscal years ended December 31, 1992, December 30, 1993, December 29, 1994, December 28, 1995 and January 2, 1997 and as of and for each of the nine-month periods ended October 3, 1996 and October 2, 1997, are derived from the consolidated financial statements of Regal. This information should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the Supplemental Consolidated Financial Statements and Notes thereto incorporated by reference herein.
FISCAL YEAR ENDED NINE MONTHS ENDED ---------------------------------------------------------------------- ----------------------- DECEMBER 31, DECEMBER 30, DECEMBER 29, DECEMBER 28, JANUARY 2, OCTOBER 3, OCTOBER 2, 1992 1993 1994 1995 1997 1996 1997(1) ------------ ------------ ------------ ------------ ---------- ---------- ---------- STATEMENT OF INCOME DATA: Revenues.................... $167,588 $214,359 $265,005 $309,022 $389,193 $287,188 $348,508 Operating income............ 12,849 22,147 28,412 41,110 58,196 44,108 45,051 Income before extraordinary item...................... 6,107 8,716 12,702 17,953 25,817 18,644 23,777 Extraordinary item net of tax: Gain (loss) on extinguishment of debt.................... -- 190 (1,752) (448) (751) (751) (10,020) Net income.................. 6,107 8,906 10,950 17,505 25,066 17,893 13,757 Ratio of earnings to fixed charges(2)................ 1.79x 2.91x 3.52x 3.37x 3.97x 3.76x 4.07x OPERATING DATA(3): Theatre locations........... 130 160 195 206 223 222 238 Screens..................... 924 1,110 1,397 1,616 1,899 1,803 2,111 Average screens per location.................. 7.11 6.94 7.16 7.84 8.52 8.12 8.87
AS OF OCTOBER 2, 1997 --------------------- BALANCE SHEET DATA: Total assets.............................................. $583,655 Total long-term debt, including current maturities........ 248,641 Total shareholders' equity................................ 294,650
- --------------- (1) For the third quarter and first nine months of 1997, Regal had several nonrecurring items that were primarily related to the Cobb Theatres Acquisition, which was consummated during the third quarter. For both periods, these nonrecurring items were: (i) an extraordinary loss on debt extinguishment of $10,020,000 net of tax; (ii) merger expenses of $7,789,000 ($5,429,000, after tax); (iii) an impairment loss of long-lived assets under Statement of Financial Accounting Standards No. 121 of $4,960,000 ($3,075,000, after tax); and (iv) a deferred tax asset valuation allowance adjustment that reduced income taxes by $2,309,000. For the first nine months of 1996, Regal had the following nonrecurring items: (i) an extraordinary loss on debt extinguishment of $751,000 net of tax; and (ii) after tax expenses related to mergers and dividends of $1,429,000. (2) The ratio of earnings to fixed charges is computed by dividing earnings by fixed charges. For this purpose, "earnings" include pretax income from continuing operations plus fixed charges (adjusted for interest capitalized during the period). "Fixed charges" include interest, whether expensed or capitalized, amortization of debt expenses and the portion of rental expense that is representative of the interest factor in these rentals. (3) Theatre locations and screens are stated at the end of the respective periods. 7 13 RISK FACTORS The following risk factors, in addition to the other information contained in this Prospectus, should be carefully considered in evaluating an investment in the Notes offered hereby. DEPENDENCE ON MOTION PICTURE PRODUCTION AND PERFORMANCE; RELATIONSHIP WITH FILM DISTRIBUTORS The ability of Regal to operate successfully depends upon a number of factors, the most important of which is the availability and popularity of motion pictures and the performance of such motion pictures in the Company's markets. The Company predominantly licenses "first-run" motion pictures. Poor performance of, or disruption in the production of or access to, motion pictures by the major studios and/or independent producers could adversely affect the Company's business and results of operations. Since film distributors have historically released those films which they anticipate will be the most successful during the summer and holiday seasons, poor performance of such films or disruption in the release of films during such periods could adversely affect the Company's quarterly results for those particular periods. In addition, because the Company's business depends to a significant degree on maintaining good relations with the major film distributors, a deterioration in the Company's relationship with one or more of the major film distributors could adversely affect the Company's access to commercially successful films and have a material adverse effect on the Company's business and results of operations. EXPANSION PLANS The Company's growth strategy involves the development of new theatres. The Company intends to develop approximately 140 to 160 screens during the balance of 1997 and approximately 500 to 600 screens during 1998. The Company expects that the capital expenditures in connection with its expansion plan will aggregate approximately $40 million to $50 million for the fourth quarter of 1997 and $200 million to $225 million during 1998. The Company's ability to open theatres on a timely and profitable basis is subject to various contingencies, some of which are beyond the Company's control. There is significant competition in the United States for site locations from both theatre companies and other businesses. There can be no assurance that the Company will be able to obtain attractive theatre sites, negotiate acceptable lease terms, build theatres on a timely and cost-effective basis, hire, train and retain skilled managers and personnel and obtain adequate capital resources. There can be no assurance that the Company will achieve its planned expansion or that new theatres will achieve levels of profitability comparable to the Company's existing theatres. ACQUISITION RISKS The Company's growth strategy also may involve the acquisition of additional theatres and/or theatre companies. There can be no assurance that the Company will be able to successfully acquire suitable acquisition candidates or integrate acquired operations into its existing operations. There can also be no assurance that future acquisitions will not have an adverse effect upon the Company's operating results, particularly in the quarters immediately following the completion of an acquisition while the operations of an acquired business are being integrated. Once integrated, acquired theatres may not achieve (or may not be expected to achieve) levels of revenue or profitability comparable with those achieved by the Company's existing theatres, or otherwise perform as expected. There is substantial competition for attractive acquisition candidates. COMPETITION The motion picture exhibition industry is highly competitive, particularly in licensing aspects of films, attracting patrons and finding new theatre sites. Theatres operated by national and regional circuits and by smaller independent exhibitors compete with the Company's theatres. Many of the Company's competitors have been in existence significantly longer than Regal and may be better 8 14 established in certain of the markets where the Company's theatres are located. Many of the Company's competitors have sought to increase the number of theatres and screens in operation. Such increases may cause certain local markets or portions thereof to become over screened, resulting in a negative impact on the earnings of the theatres involved and thus on the Company's theatres in those markets. Regal believes that the principal competitive factors in the motion picture exhibition industry include licensing terms, the seating capacity, location and reputation of an exhibitor's theatres, the quality of projection and sound equipment at the theatres and the exhibitor's ability and willingness to promote the films. Competition for patrons is dependent upon factors such as the availability of popular films, the location of theatres, the comfort and quality of theatres and ticket prices. Failure to compete favorably with respect to any of these factors could have a material adverse effect on the Company's business and results of operations. Alternative motion picture exhibition delivery systems, including cable television, video cassettes and pay per view, exist for the exhibition of filmed entertainment. An expansion of such delivery systems could have a material adverse effect upon Regal's business and results of operations. DEPENDENCE ON SENIOR MANAGEMENT Regal's success depends upon the continued contributions of its senior management, including Michael L. Campbell, Chairman, President and Chief Executive Officer of the Company. The loss of the services of one or more of Regal's senior management could have a material adverse effect upon its business and development. Regal's loan agreement provides that Mr. Campbell or a successor reasonably acceptable to Regal's lenders must be employed as Chief Executive Officer. Regal has an employment agreement with Mr. Campbell. FLUCTUATIONS IN QUARTERLY RESULTS OF OPERATIONS Regal's revenues have been seasonal, coinciding with the timing of releases of motion pictures by the major distributors. Generally, the most marketable motion pictures have been released during the summer and the Thanksgiving through year-end holiday season. The unexpected emergence of a hit film during other periods can alter the traditional trend. The timing of such releases can have a significant effect on Regal's results of operations, and the results of one quarter are not necessarily indicative of results for the next quarter. The seasonality of motion picture exhibition, however, has become less pronounced in recent years as studios have begun to release major motion pictures somewhat more evenly throughout the year. SUBSTANTIAL INDEBTEDNESS As of October 2, 1997, the Company had $123.6 million of senior indebtedness outstanding. The degree to which the Company is leveraged will have important consequences to holders of Notes, including: (i) the ability of the Company to obtain additional financing in the future, whether for working capital, capital expenditures, acquisitions or other purposes, may be impaired; (ii) a substantial portion of the Company's cash flow from operations will be dedicated to the payment of interest on the Notes and under the Bank Revolving Credit Facility and, under certain circumstances, principal amounts of indebtedness outstanding under the Bank Revolving Credit Facility, thereby reducing the funds available to the Company for its operations and any future business opportunities and (iii) the Company may be more vulnerable in the event of a downturn in its business. The Company's ability to make scheduled payments or to refinance its indebtedness depends on its financial and operating performance, which, in turn, is subject to prevailing economic conditions and to financial, business, competitive and other factors beyond its control. Although the Company's cash flow from operations has historically been sufficient to meet its debt service obligations, there can be no assurance that the Company's operating results will continue to be sufficient for payment of the Company's indebtedness, including indebtedness under the Notes. See "Capitalization." 9 15 SUBORDINATION OF NOTES The Old Notes are and the Exchange Notes will be general unsecured obligations of the Company subordinated in right of payment to all existing and future senior indebtedness of the Company, including indebtedness under the Bank Revolving Credit Facility. As of October 2, 1997, the Company had $123.6 million of senior indebtedness outstanding, and the Company's subsidiaries had other liabilities of $10.1 million (consisting primarily of trade payables and accrued expenses). In addition, the Notes will be effectively subordinated to all indebtedness and other liabilities (including trade payables) of the Company's subsidiaries. Subject to certain limitations, the Indenture will permit the Company and its subsidiaries to incur additional indebtedness, including senior indebtedness. See "Description of Exchange Notes -- Certain Covenants." The Company may not pay principal of, premium, if any, or interest on the Notes or purchase, redeem or otherwise retire the Notes, if any principal, premium, if any, or interest on any senior indebtedness is not paid when due (whether at final maturity, upon scheduled installment, acceleration or otherwise) unless such payment default has been cured or waived or such senior indebtedness has been repaid in full. In addition, under certain circumstances, if any non-payment default exists with respect to senior indebtedness (including under the Bank Revolving Credit Facility), the Company may not make any payments on the Notes for a specified period of time, unless such default is cured or waived or such senior indebtedness has been repaid in full. If the Company fails to make any payment on the Notes when due or within any applicable grace period, whether or not on account of the payment blockage provisions referred to above, such failure would constitute an event of default under the Indenture and would generally entitle the holders of the Notes to accelerate the maturity thereof. See "Description of Exchange Notes -- Subordination." As a result of the subordination provisions contained in the Indenture, in the event of a liquidation or insolvency of the Company, the assets of the Company will be available to pay obligations on the Notes only after all senior indebtedness and indebtedness and other liabilities of the Company's existing subsidiaries (or any future subsidiary) have been paid in full, and therefore there may not be sufficient assets remaining to pay amounts due on any or all of the Notes then outstanding. The outstanding capital stock of the Company's subsidiaries has been pledged to secure senior indebtedness under the Bank Revolving Credit Facility. In addition, the assets of the Company may be pledged to secure senior indebtedness, including indebtedness under the Bank Revolving Credit Facility. See "Description of Exchange Notes" and "Description of Bank Revolving Credit Facility." LIMITATIONS OF COVENANTS Although the Indenture limits the incurrence of indebtedness by the Company and its subsidiaries, such limitation is subject to a number of significant qualifications. Moreover, the Indenture does not impose any limitation on the incurrence by the Company and its subsidiaries of liabilities that are not considered "Indebtedness" under the Indenture, such as those that would be incurred under the Sale/Leaseback Transaction, if consummated; nor does the Indenture impose any limitation on the amount of liabilities incurred by subsidiaries, if any, that might be designated as Unrestricted Subsidiaries (as defined herein). See " -- Substantial Indebtedness"; and "Description of Exchange Notes -- Certain Covenants -- Limitation on Consolidated Indebtedness" and " -- Limitation on Restricted Payments." Furthermore, there are no restrictions on the ability of the Company and its subsidiaries to make advances to, or invest in, other entities (including unaffiliated entities) and no restrictions on the ability of the Company's subsidiaries to enter into agreements restricting their ability to pay dividends or otherwise transfer funds to the Company. If the Notes attain Investment Grade Status, the covenants in the Indenture limiting the Company's and its subsidiaries' ability to incur indebtedness, pay dividends or make other distributions or engage in transactions with affiliates will cease to apply. See "Description of Exchange Notes -- Fall-away Event" and " -- Certain Covenants." 10 16 REPURCHASE OF THE NOTES UPON CHANGE OF CONTROL Upon the occurrence of a Change of Control (as defined herein), the Company will be required to make an offer to repurchase the Notes at a price equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of repurchase. Certain events involving a Change of Control will result in an event of default under the Bank Revolving Credit Facility and may result in an event of default under other indebtedness of the Company that may be incurred in the future. An event of default under the Bank Revolving Credit Facility or other future senior indebtedness could result in an acceleration of such indebtedness, in which case the subordination provisions of the Notes would require payment in full of such senior indebtedness before repurchase of the Notes. See "Description of Exchange Notes -- Subordination," "-- Certain Covenants," -- Change of Control" and "Description of Bank Revolving Credit Facility." There can be no assurance that the Company would have sufficient resources to repurchase the Notes or pay its obligations if the indebtedness under the Bank Revolving Credit Facility or other future senior indebtedness were accelerated upon the occurrence of a Change of Control. The inability of the Company to repurchase all of the tendered Notes would constitute an Event of Default under the Indenture. These provisions may be deemed to have anti-takeover effects and may delay, defer or prevent a merger, tender offer or other takeover attempt. No assurance can be given that the terms of any future indebtedness will not contain cross default provisions based upon Change of Control or other defaults under such debt instruments. RESTRICTIONS UNDER BANK REVOLVING CREDIT FACILITY The Bank Revolving Credit Facility contains certain financial and other covenants, including covenants requiring the Company to maintain certain financial ratios and restricting the ability of the Company to incur indebtedness or to create or suffer to exist certain liens. The Bank Revolving Credit Facility also requires that certain amounts of indebtedness thereunder be repaid by specified dates. The ability of the Company to comply with such provisions may be affected by events beyond its control. See "Description of Bank Revolving Credit Facility." A failure to make any required payment under the Bank Revolving Credit Facility or to comply with any of the financial and operating covenants included in the Bank Revolving Credit Facility would result in an event of default thereunder, permitting the lenders to vote to accelerate the maturity of the indebtedness under the Bank Revolving Credit Facility. In addition, pursuant to the subordination provisions of the Notes, a default under the Bank Revolving Credit Facility may result in the blockage of payments under the Notes. See "Description of Exchange Notes -- Subordination." If the lenders under the Bank Revolving Credit Facility accelerate the maturity of the indebtedness thereunder, there can be no assurance that the Company will have sufficient assets to satisfy its obligations under the Bank Revolving Credit Facility or the Notes. ABSENCE OF PUBLIC MARKET FOR THE NOTES The Notes are a new issuance of securities for which there is currently no trading market. The Notes will not be listed on any securities exchange. If the Exchange Notes are traded after their initial issuance, they may trade at a discount from their principal amount depending upon prevailing interest rates, the market for similar securities and other factors, including general economic conditions and the financial condition and performance of, and prospects for, the Company. Goldman, Sachs & Co. and Lehman Brothers Inc. have advised the Company that they currently intend to make a market in the Old Notes and Exchange Notes. However, they are not obligated to do so, and any market-making activity with respect to the Old Notes and the Exchange Notes may be discontinued at any time without notice. 11 17 DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS This Prospectus includes "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. All statements other than statements of historical facts included in this Prospectus may constitute forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Important factors that could cause actual results to differ materially from the Company's expectations are disclosed in the foregoing risk factors (the "Cautionary Statements"). All forward-looking statements are expressly qualified in their entirety by the Cautionary Statements. THE COMPANY Regal is the third largest motion picture exhibitor in the United States based upon the number of screens in operation. At October 2, 1997, the Company operated 238 multiplex theatres with an aggregate of 2,111 screens in 22 states. Since its inception, Regal has increased its average screens per location from 4.8 to 8.9 screens, which management believes is among the highest in the industry, as compared to the average of approximately 5.7 screens for the five largest motion picture exhibitors at May 1, 1996. The Company develops, acquires and operates multiplex theatres in mid-size metropolitan markets and suburban growth areas of larger metropolitan markets. At October 2, 1997, Regal had 19 new theatres with 333 screens under construction and 17 screens under construction at four existing theatres. The Company seeks to locate theatres in markets that it believes are underscreened or that are served by older theatre facilities. The Company also seeks to locate each theatre where it will be the sole or dominant exhibitor within a particular geographic film licensing zone. Management believes that approximately 72% of the Company's theatres are located in film licensing zones in which Regal is the sole exhibitor. The Company's growth has come through the acquisition of existing theatres and the development of new theatres. Regal has followed a conservative approach to capitalizing the Company and, accordingly, has historically financed a significant portion of its growth through the issuance of Common Stock, both in acquisitions and in equity offerings. Since its inception, Regal has acquired a net of 187 theatres with 1,432 screens, developed 51 theatres with 597 screens and added 82 screens to existing theatres, all of which have served to establish and enhance the Company's presence in selected geographic markets. Regal anticipates that its future growth will result largely from the development of new theatres, as well as the addition of screens to existing theatres, strategic acquisitions of theatre circuits and the development of entertainment concepts that complement the Company's theatres. Regal emphasizes patron satisfaction by providing convenient locations, comfortable seating, spacious neon-enhanced lobby and concession areas and a wide variety of film selections. Regal's theatre complexes feature clean, modern auditoriums with high quality projection and digital stereo surround-sound systems. Regal's theatres typically contain auditoriums ranging from 100 to 500 seats, allowing the Company to exhibit films on a more cost effective basis for longer periods by shifting films from larger to smaller auditoriums within the same complex to accommodate changing attendance levels. In addition, the Company promotes patron loyalty through specialized marketing programs for its theatres and feature films. To complement the Company's theatre development, the Company has developed its FunScape(TM) comprehensive entertainment complexes designed to increase both the drawing radius for patrons and patron spending by offering a wider array of entertainment options at a single destination. Regal opened its first FunScape(TM) in Chesapeake, Virginia in August 1995 and additional FunScapes(TM) in Rochester, New York, Syracuse, New York and Brandywine, Delaware. Each complex includes a 13 to 16 screen theatre and a 50,000 to 70,000 square foot comprehensive 12 18 family entertainment center. The Company currently has four additional FunScape(TM) complexes under construction and may seek to develop additional FunScape(TM) complexes at strategic locations. The Company also signed an agreement to include IMAX 3-D theatres in ten new multiplex theatre projects over the next five years. BUSINESS STRATEGY OPERATING STRATEGY. Management believes that the following characteristics are the key elements of its operating strategy: - MULTIPLEX THEATRES. Management believes that the Company's multiplex theatres, substantially all of which show first run movies, promote increased attendance and maximize operating efficiencies through reduced labor costs and improved utilization of theatre capacity. The Company's multiplex theatres enable it to offer a diverse selection of films; stagger movie starting times; increase management's flexibility in determining the number of weeks that a film will run and the size of the auditorium in which it is shown; and serve patrons from common support facilities. - COST CONTROL. The Company's tight cost control drives its operating margins, which management believes are the highest in the movie exhibition industry. Management's focus on cost control extends from theatre development through operation of the Company's theatres. Management believes that it is able to reduce construction and operating costs by designing prototype theatres adaptable to a variety of locations and by actively supervising all aspects of construction. In addition, through the use of detailed daily management reports, the Company closely monitors theatre level costs. A significant component of theatre level management's compensation is based on controlling operating expenses at the theatre level. - PATRON SATISFACTION/QUALITY CONTROL. Regal emphasizes conveniently located, modern, high quality facilities that offer a wide variety of films. To maintain quality and consistency within the Company's theatres, Regal conducts regular inspections of each theatre and operates a "mystery shopper" program. To enhance the movie going experience, the Company invests in high quality projection and stereo sound equipment, including the latest digital surround-sound systems. As of October 2, 1997, the Company had 74% of its theatres equipped with digital surround-sound systems. - CENTRALIZED CORPORATE DECISION MAKING/DECENTRALIZED OPERATIONS. Functions centralized through the Company's corporate office include film licensing and concession purchasing, as well as decisions on theatre construction and configuration. Cost controls at the theatre level include close monitoring of concession, advertising and payroll expenses. Regal devotes significant resources to training its theatre managers, who are responsible for most aspects of its theatres' day-to-day operations. - MARKETING. Regal actively markets its theatres through grand opening promotions, including "VIP" preopening parties, direct mail campaigns, television commercials in certain markets and promotional activities, such as live music, spotlights and skydivers, which frequently generate media coverage. Regal also utilizes special marketing programs for specific films and concession items. Regal develops patron loyalty through a number of marketing programs such as a summer children's film series in which children's films are shown at reduced rates during the morning hours. - PERFORMANCE-BASED COMPENSATION PACKAGES. The Company maintains an incentive program for its corporate personnel, district managers and theatre managers which rewards employees for incremental improvements in profitability. The Company believes that its incentive program, which consists of cash bonuses and stock options, aligns the employees' interests with those of the Company's shareholders. 13 19 GROWTH STRATEGY. Management believes that the following characteristics are the key elements of its growth strategy: - DEVELOP NEW THEATRES IN EXISTING AND TARGET MARKETS. Regal seeks to develop multiplex theatres with at least ten screens in both its existing markets and in other mid-sized metropolitan markets and suburban growth areas of larger metropolitan markets in the United States. Management also seeks to locate theatres in areas that are underscreened or that are served by aging theatre facilities. - ADD SCREENS TO EXISTING THEATRES. To enhance profitability and maintain competitiveness at existing theatres, the Company will continue to add additional screens where appropriate. The Company currently has nine screens under construction at existing theatre facilities and anticipates the addition of 60 to 80 screens to certain of its theatres over the next 12 to 24 months. The addition of screens to existing theatres is designed not to disrupt operations at the theatres. - ACQUIRE THEATRES. While management believes that a significant portion of its future growth will come through the development of new theatres, Regal will continue to consider strategic acquisitions of complementary theatres or theatre circuits at which Regal believes it can improve profitability and increase screen counts. - DEVELOP COMPLEMENTARY THEATRE CONCEPTS. To complement the Company's theatre development, Regal has opened four FunScapes(TM) and currently has four additional FunScapes(TM) under construction. The Company may seek to develop additional FunScape(TM) complexes at strategic locations. The Company also signed an agreement to include IMAX 3-D theatres in ten new multiplex theatre projects over the next five years. Management believes that theatres with IMAX 3-D will draw higher traffic levels than theatres without them. 14 20 THE EXCHANGE OFFER GENERAL In connection with the sale of the Old Notes, the purchasers thereof became entitled to the benefits of certain registration rights (the "Registration Rights"). Pursuant to the agreement governing the Exchange and Registration Rights (the "Registration Rights Agreement"), the Company agreed to use its best efforts, at its cost, to file and cause to become effective a registration statement with respect to the Exchange Offer to exchange the Old Notes for the Exchange Notes (the "Exchange Offer Registration Statement"). Upon such Exchange Offer Registration Statement being declared effective, the Company has agreed to offer the Exchange Notes in return for surrender of the Old Notes. For each Old Note surrendered to the Company under the Exchange Offer and not withdrawn by the holder thereof, the Holder will receive an Exchange Note of equal principal amount. Interest on each Exchange Note will accrue from September 24, 1997. In the event that applicable interpretations of the staff of the Commission do not permit the Company to effect the Exchange Offer or under certain other circumstances, the Company has agreed, at its cost, to use its best efforts to cause to become effective a shelf registration statement (the "Shelf Registration Statement") with respect to resales of the Old Notes and to keep such registration statement effective for a period of two years, or in certain circumstances, one year. The Company shall, in the event of such a shelf registration, provide to each holder copies of the prospectus, notify each holder when the Shelf Registration Statement for the Old Notes has become effective and take certain other actions as are required to permit unrestricted resales of the Old Notes. In the event the Exchange Offer Registration Statement is not filed with the Commission on or prior to November 23, 1997 or is not declared effective on or prior to February 22, 1998, then the annual interest rate borne by the Notes shall be increased by 0.50% per annum following such dates. If such Exchange Offer is not consummated or a Shelf Registration Statement is not declared effective by March 24, 1998, then the annual interest rate borne by the Notes shall be increased by an additional 0.50% per annum after March 24, 1998. Upon the effectiveness of the Exchange Offer Registration Statement after February 22, 1998 or the consummation of such Exchange Offer or the effectiveness of such Shelf Registration Statement, as the case may be, after March 24, 1998 the interest rate borne by the Notes from effectiveness or consummation, as the case may be, will revert to 8 1/2%. In the event the Exchange Offer is consummated, the Company, subject to certain incidental registration rights, will not be required under the Registration Rights Agreement to file the Shelf Registration Statement to register any outstanding Notes, and the interest rate on such Notes will remain at its initial level of 8 1/2%. The Exchange Offer shall be deemed to have been consummated when the Company has exchanged, pursuant to the Exchange Offer, Exchange Notes for all Old Notes that have been tendered and not withdrawn prior to the Expiration Date. In such event, holders of the Old Notes seeking liquidity in their investment would have to rely on exemptions to registration requirements under the securities laws, including the Securities Act. See "Description of Exchange Notes -- Registration Rights" and "Risk Factors." Upon the terms and subject to the conditions set forth in this Prospectus and in the accompanying Letter of Transmittal, the Company will accept all Old Notes properly tendered prior to 5:00 p.m., New York City time, on the Expiration Date. The Company will issue $1,000 principal amount of Exchange Notes in exchange for each $1,000 principal amount of outstanding Old Notes accepted in the Exchange Offer. Holders may tender some or all of their Old Notes pursuant to the Exchange Offer in denominations of $1,000 and integral multiples thereof. Based on no-action letters issued by the staff of the Commission to third parties, the Company believes that the Exchange Notes issued pursuant to the Exchange Offer in exchange for the Old Notes may be offered for resale, resold and otherwise transferred by holders thereof (other than any such holder that is an "affiliate" of the Company within the meaning of Rule 405 under the 15 21 Securities Act) without further compliance with the registration and prospectus delivery requirements of the Securities Act, provided that such Exchange Notes are acquired in the ordinary course of such holders' business and such holders have no arrangement or understandings with any person to participate in the distribution of such Exchange Notes. Any holder of the Old Notes who tenders in the Exchange Offer for the purpose of participating in a distribution of the Exchange Notes could not rely on such interpretation by the staff of the Commission and must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction. Each broker-dealer that receives Exchange Notes for its own account in exchange for the Old Notes, where such Old Notes were acquired by such broker-dealer as a result of market-making activities or other trading activities, may be a statutory underwriter and must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Notes. See "Plan of Distribution." As of the date of this Prospectus, $125,000,000 aggregate principal amount of the Old Notes is outstanding. In connection with the issuance of the Old Notes, the Company arranged for the Old Notes to be eligible for trading in the Private Offering, Resale and Trading through Automated Linkages (PORTAL) Market, the National Association of Securities Dealers' screen based, automated market trading of securities eligible for resale under Rule 144A under the Securities Act. This Prospectus, together with the accompanying Letter of Transmittal (the "Letter of Transmittal"), is being sent to all registered holders as of , 1997 (the "Record Date"). The Company shall be deemed to have accepted validly tendered Old Notes when, as and if the Company has given oral or written notice thereof to IBJ Schroder Bank & Trust Company (the "Exchange Agent"). See "-- Exchange Agent." The Exchange Agent will act as agent for the tendering holders of the Old Notes for the purpose of receiving Exchange Notes from the Company and delivering Exchange Notes to such holders. If any tendered Old Notes are not accepted for exchange because of an invalid tender or the occurrence of certain other events set forth herein, certificates for any such unaccepted Old Notes will be returned, without expense, to the tendering holder thereof as promptly as practicable after the Expiration Date. Holders of the Notes who tender in the Exchange Offer will not be required to pay brokerage commissions or fees or, subject to the instructions in the Letter of Transmittal, transfer taxes with respect to the exchange of the Old Notes pursuant to the Exchange Offer. The Company will pay all charges and expenses, other than certain applicable taxes, in connection with the Exchange Offer. See " -- Fees and Expenses." EXPIRATION DATE; EXTENSIONS; AMENDMENTS The term "Expiration Date" shall mean , 1997, unless the Company, in its sole discretion, extends the Exchange Offer, in which case the term "Expiration Date" shall mean the latest date to which the Exchange Offer is extended. In order to extend the Expiration Date, the Company will notify the Exchange Agent of any extension by oral or written notice and will mail to the record holders of the Old Notes an announcement thereof, prior to 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date. Such announcement may state that the Company is extending the Exchange Offer for a specified period of time. The Company reserves the right (i) to delay acceptance of any Old Notes, to extend the Exchange Offer or to terminate the Exchange Offer and to refuse to accept the Old Notes not previously accepted, if any of the conditions set forth herein under "-- Conditions" shall have occurred and shall not have been waived by the Company (if permitted to be waived by the Company), by giving oral or written notice of such delay, extension or termination to the Exchange Agent, and (ii) to amend the terms of the Exchange Offer in any manner deemed by it to be 16 22 advantageous to the holders of the Old Notes. Any such delay in acceptance, extension, termination or amendment will be followed as promptly as practicable by oral or written notice thereof. If the Exchange Offer is amended in a manner determined by the Company to constitute a material change, the Company will promptly disclose such amendment in a manner reasonably calculated to inform the holders of the Old Notes of such amendment. Without limiting the manner in which the Company may choose to make public announcements of any delay in acceptance, extension, termination or amendment of the Exchange Offer, the Company shall have no obligation to publish, advertise, or otherwise communicate any such public announcement, other than by making a timely release to the Dow Jones News Service. INTEREST ON THE EXCHANGE NOTES The Exchange Notes will bear interest from September 24, 1997, payable semiannually on April 1 and October 1, of each year commencing on April 1, 1998, at the rate of 8 1/2% per annum. Holders of the Old Notes whose Old Notes are accepted for exchange will be deemed to have waived the right to receive any payment in respect of interest on the Old Notes accrued from September 24, 1997 until the date of the issuance of the Exchange Notes. Consequently, holders who exchange their Old Notes for Exchange Notes will receive the same interest payment on April 1, 1998 (the first interest payment date with respect to the Old Notes and the Exchange Notes) that they would have received had they not accepted the Exchange Offer. PROCEDURES FOR TENDERING To tender in the Exchange Offer, a holder must complete, sign and date the Letter of Transmittal, or a facsimile thereof, have the signatures thereon guaranteed if required by the Letter of Transmittal, and mail or otherwise deliver such Letter of Transmittal or such facsimile, together with the Old Notes (unless such tender is being effected pursuant to the procedure described under "-- Book-entry Transfer" below) and any other required documents, to the Exchange Agent prior to 5:00 p.m., New York City time, on the Expiration Date. The tender by a holder of the Old Notes will constitute an agreement between such holder and the Company in accordance with the terms and subject to the conditions set forth herein and in the Letter of Transmittal. Delivery of all documents must be made to the Exchange Agent at its address set forth herein. Holders may also request that their respective brokers, dealers, commercial banks, trust companies or nominees effect such tender for such holders. The method of delivery of the Old Notes and the Letter of Transmittal and all other required documents to the Exchange Agent, including through DTC's ATOP system as described below, is at the election and risk of the holders. Instead of delivery by mail, it is recommended that holders use an overnight or hand delivery service. In all cases, sufficient time should be allowed to assure timely delivery. No Letter of Transmittal or Notes should be sent to the Company. Only a holder of Old Notes may tender such Old Notes in the Exchange Offer. The term "holder" with respect to the Exchange Offer means any person in whose name the Old Notes are registered on the books of the Company or any other person who has obtained a properly completed bond power from the registered holder, or any person whose Old Notes are held of record by DTC who desires to deliver through DTC's ATOP system. Any beneficial holder whose Old Notes are registered in the name of his broker, dealer, commercial bank, trust company or other nominee and who wishes to tender should contact such registered holder promptly and instruct such registered holder to tender on his behalf. If such beneficial holder wishes to tender on his own behalf, such beneficial holder must, prior to completing and executing the Letter of Transmittal and delivering his Old Notes, either make appropriate arrangements to register ownership of the Old Notes in such holder's name or obtain a 17 23 properly completed bond power from the registered holder. The transfer of record ownership may take considerable time. Signatures on a Letter of Transmittal or a notice of withdrawal, as the case may be, must be guaranteed by a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc., a commercial bank or trust company having an office or correspondent in the United States or an "eligible guarantor institution" within the meaning of Rule 17Ad-15 under the Exchange Act (an "Eligible Institution") unless the Old Notes tendered pursuant thereto are tendered (i) by a registered holder who has not completed the box entitled "Special Issuance Instructions" or "Special Delivery Instructions" on the Letter of Transmittal or (ii) for the account of an Eligible Institution. If the Letter of Transmittal is signed by a person other than the registered holder of any Old Notes listed therein, such Old Notes must be endorsed or accompanied by appropriate bond powers which authorize such person to tender the Old Notes on behalf of the registered holder, in either case signed as the name of the registered holder or holders appears on the Old Notes. If the Letter of Transmittal or any Old Notes or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and unless waived by the Company, evidence satisfactory to the Company of their authority to so act must be submitted with the Letter of Transmittal. All questions as to the validity, form, eligibility (including time of receipt), acceptance and withdrawal of the tendered Old Notes will be determined by the Company in its sole discretion, which determination will be final and binding. The Company reserves the absolute right to reject any and all Old Notes not properly tendered or any Old Notes the Company's acceptance of which would, in the opinion of counsel for the Company, be unlawful. The Company also reserves the absolute right to waive any irregularities or conditions of tender as to particular Old Notes. The Company's interpretation of the terms and conditions of the Exchange Offer (including the instructions in the Letter of Transmittal) will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of the Old Notes must be cured within such time as the Company shall determine. Neither the Company, the Exchange Agent nor any other person shall be under any duty to give notification of defects or irregularities with respect to tenders of the Old Notes nor shall any of them incur any liability for failure to give such notification. Tenders of the Old Notes will not be deemed to have been made until such irregularities have been cured or waived. Any Old Notes received by the Exchange Agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned without cost by the Exchange Agent to the tendering holder of such Old Notes unless otherwise provided in the Letter of Transmittal, as soon as practicable following the Expiration Date. In addition, the Company reserves the right in its sole discretion to (a) purchase or make offers for any Old Notes that remain outstanding subsequent to the Expiration Date, or, as set forth under "-- Conditions," to terminate the Exchange Offer and (b) to the extent permitted by applicable law, purchase the Old Notes in the open market, in privately negotiated transactions or otherwise. The terms of any such purchases or offers may differ from the terms of the Exchange Offer. BOOK-ENTRY TRANSFER DTC's ATOP system is the only method of processing exchange offers through DTC. To accept the Exchange Offer through ATOP, participants in DTC must send electronic instruction to DTC through DTC's communication system in lieu of sending a signed, hard copy Letter of Transmittal. DTC is obligated to communicate those electronic instructions to the Exchange Agent. To tender the Old Notes through ATOP, the electronic instructions sent to DTC and transmitted by DTC to the Exchange Agent must contain the character by which the participant acknowledges its receipt of, and agrees to be bound by the terms of, the Letter of Transmittal ("Electronic Agreement"). 18 24 The exchange of Exchange Notes for the Old Notes will only be made after timely confirmation of the transfer of the Old Notes to the Exchange Agent and receipt by the Exchange Agent of an Electronic Agreement. The method of delivery of the Old Notes is at the option and risk of the tendering holder and, except as otherwise provided in the Letter of Transmittal, the delivery will be deemed to be made only when actually received by the Exchange Agent. GUARANTEED DELIVERY PROCEDURES Holders who wish to tender their Old Notes and (i) whose Old Notes are not immediately available, or (ii) who cannot deliver their Old Notes, the Letter of Transmittal or any other required documents to the Exchange Agent prior to the Expiration Date, may effect a tender if: (a) The tender is made through an Eligible Institution; (b) Prior to the Expiration Date, the Exchange Agent receives from such Eligible Institution a properly completed and duly executed Notice of Guaranteed Delivery (by facsimile transmission, mail or hand delivery) setting forth the name and address of the holder of the Old Notes, the certificate number or numbers of such Old Notes and the principal amount of the Old Notes tendered, stating that the tender is being made thereby, and guaranteeing that, within five business days after the Expiration Date, the Letter of Transmittal (or facsimile thereof), together with the certificate(s) representing the Old Notes to be tendered in proper form for transfer and any other documents required by the Letter of Transmittal, will be deposited by the Eligible Institution with the Exchange Agent; and (c) Such properly completed and executed Letter of Transmittal (or facsimile or electronic transmission thereof), together with the certificate(s) representing all tendered Old Notes in proper form for transfer (or electronic transmission thereof) and all other documents required by the Letter of Transmittal are received by the Exchange Agent within five business days after the Expiration Date. WITHDRAWAL OF TENDERS Except as otherwise provided herein, tenders of the Old Notes may be withdrawn at any time prior to 5:00 p.m., New York City time, on the business day prior to the Expiration Date, unless previously accepted for exchange. To withdraw a tender of the Old Notes in the Exchange Offer, a written or facsimile transmission or, where applicable electronic transmission, notice of withdrawal must be received by the Exchange Agent at its address set forth herein prior to 5:00 p.m., New York City time, on the business day prior to the Expiration Date and prior to acceptance for exchange thereof by the Company. Any such notice of withdrawal must (i) specify the name of the person having deposited the Old Notes to be withdrawn (the "Depositor"), (ii) identify the Old Notes to be withdrawn (including the certificate number or numbers and principal amount of such Old Notes), (iii) be signed by the Depositor in the same manner as the original signature on the Letter of Transmittal by which such Old Notes were tendered (including any required signature guarantees) or be accompanied by documents of transfer sufficient to permit the Trustee with respect to the Old Notes to register the transfer of such Old Notes into the name of the Depositor withdrawing the tender and (iv) specify the name in which any such Old Notes are to be registered, if different from that of the Depositor or, in the case of Holders tendering through the ATOP system, otherwise comply with the requirements of DTC. All questions as to the validity, form and eligibility (including time of receipt) of such withdrawal notices will be determined by the Company, whose determination shall be final and binding on all parties. Any Old Notes so withdrawn will be deemed not to have been validly tendered for purposes of the Exchange Offer and no Exchange Notes will be issued with respect thereto unless the Old Notes so withdrawn are validly retendered. Any Old Notes which have been tendered but which are not 19 25 accepted for exchange will be returned to the holder thereof without cost to such holder as soon as practicable after withdrawal, rejection of tender or termination of the Exchange Offer. Properly withdrawn Old Notes may be retendered by following one of the procedures described above under " -- Procedures for Tendering" at any time prior to the Expiration Date. CONDITIONS Notwithstanding any other provision of the Exchange Offer, or any extension of the Exchange Offer, the Company will not be required to issue Exchange Notes in exchange for any properly tendered Old Notes not theretofore accepted and may terminate the Exchange Offer, or, at its option, modify or otherwise amend the Exchange Offer, if any of the following occurs or is true: (i) the Exchange Offer, or the making of any exchange by a Holder, violates applicable law or any applicable interpretation of the Commission or its staff, (ii) any action or proceeding shall have been instituted or threatened in any court or by or before any governmental agency with respect to the Exchange Offer which, in the Company's judgment, would reasonably be expected to impair the ability of the Company to proceed with the Exchange Offer, (iii) there shall have been adopted or enacted any law, statute, rule or regulation which, in the Company's judgment, would reasonably be expected to impair the ability of the Company to proceed with the Exchange Offer, (iv) there shall have been declared by U.S. federal, New York State or Canadian federal authorities a banking moratorium which, in the Company's judgment, would reasonably be expected to impair the ability of the Company to proceed with the Exchange Offer, (v) trading generally on the New York Stock Exchange, the American Stock Exchange or NASDAQ shall have been suspended by order of the Commission or any other governmental authority which, in the Company's judgment, would reasonably be expected to impair the ability of the Company to proceed with the Exchange Offer or (vi) the Company reasonably deems it advisable to terminate the Exchange Offer. If the Company determines that any condition set forth above exists, the Company may (i) refuse to accept any Old Notes and return any Old Notes that have been tendered to the holders thereof, (ii) extend the Exchange Offer and retain all Old Notes tendered prior to the Expiration of the Exchange Offer, subject to the rights of such holders of tendered Old Notes to withdraw their tendered Old Notes, or (iii) waive such termination event with respect to the Exchange Offer and accept all properly tendered Old Notes that have not been withdrawn. If such waiver constitutes a material change in the Exchange Offer, the Company will disclose such change by means of a supplement to this Prospectus that will be distributed to each registered holder of the Old Notes, and the Company will extend the Exchange Offer for a period of five to ten business days, depending upon the significance of the waiver and the manner of disclosure to the registered holders of the Old Notes, if the Exchange Offer would otherwise expire during such period. See "Description of Exchange Notes -- Registration Rights." EXCHANGE AGENT IBJ Schroder Bank & Trust Company, the Trustee under the Indenture, has been appointed as Exchange Agent for the Exchange Offer. Questions and requests for assistance and requests for additional copies of this Prospectus or of the Letter of Transmittal should be directed to the Exchange Agent addressed as follows:
By Mail, Hand or Overnight Courier: One State Street Plaza New York, New York 10004 Attention: Securities Processing, Floor SC-1 Facsimile Transmission: 212-858-2611 Confirm by Telephone: 212-858-2103
20 26 FEES AND EXPENSES The expenses of soliciting tenders pursuant to the Exchange Offer will be borne by the Company. The principal solicitation for tenders pursuant to the Exchange Offer is being made by mail. Additional solicitations may be made by officers and employees of the Company and its affiliates in person, by telecopy or telephone. The Company will not make any payments to brokers, dealers or other persons soliciting acceptances of the Exchange Offer. The Company, however, will pay the Exchange Agent reasonable and customary fees for its services and will reimburse the Exchange Agent for its reasonable out-of-pocket expenses in connection therewith. The Company may also pay brokerage houses and other custodians, nominees and fiduciaries the reasonable out-of-pocket expenses incurred by them in forwarding copies of this Prospectus, Letters of Transmittal and related documents to the beneficial owners of the Old Notes and in handling or forwarding tenders for exchange. USE OF PROCEEDS The Company will not receive any cash proceeds from the issuance of the Exchange Notes offered hereby. In consideration for issuing Exchange Notes as contemplated in this Prospectus, the Company will receive Old Notes in exchange, in like principal amount, the terms of which are the same in all material respects as the form and terms of the Exchange Notes except that the Exchange Notes have been registered under the Securities Act and will not contain terms restricting the transfer thereof. The Old Notes surrendered in exchange for the Exchange Notes will be retired and canceled and cannot be reissued. Accordingly, issuance of the Exchange Notes will not result in any increase in the indebtedness of the Company. The net proceeds to the Company from the sale of the Old Notes was $121 million, after deducting discounts and estimated expenses of the offering. The Company applied a portion of the net proceeds of the offering of Old Notes to repay all of the indebtedness outstanding under the Bank Tender Facility. Borrowings under the Bank Tender Facility were incurred to finance the aggregate purchase price of the Cobb Notes tendered for repurchase in the Tender Offer and aggregated $93.6 million (excluding accrued interest on the Cobb Notes through the date of purchase). The balance of the net proceeds was used to repay a portion of the indebtedness outstanding under the Company's former revolving credit facility (the "Former Bank Revolving Credit Facility"). On October 8, 1997, the Company entered into a loan agreement with its bank, establishing a new revolving credit facility which permits borrowings of up to $250 million (the "Bank Revolving Credit Facility"). As of October 8, 1997, the Company had $122 million of indebtedness outstanding under the Bank Revolving Credit Facility, which indebtedness bore interest at a weighted average interest rate of 6.22% per annum as of such date. Amounts under the Bank Revolving Credit Facility may be used by the Company for general corporate purposes, including the opening of new theatres and possible acquisitions. See "Description of Bank Revolving Credit Facility." 21 27 CAPITALIZATION The following table sets forth, as of October 2, 1997, the consolidated short-term debt and capitalization of the Company. This table should be read in conjunction with "Use of Proceeds," "Selected Consolidated Financial Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations," and the Supplemental Consolidated Financial Statements and the Notes thereto appearing elsewhere or incorporated by reference in this Prospectus.
AS OF OCTOBER 2, 1997 ---------------------- (DOLLARS IN THOUSANDS) Current maturities of long-term debt........................ $ 275 -------- $ 275 ======== Former Bank Revolving Credit Facility....................... $122,000 8 1/2% Senior Subordinated Notes due 2007................... 125,000 Other long-term obligations................................. 1,366 -------- Total long-term debt.............................. 248,366 Shareholders' Equity: Preferred Stock, no par value; 1,000,000 shares authorized, none outstanding........................... -- Common Stock, no par value, 100,000,000 shares authorized; 36,026,853 shares issued and outstanding; 36,026,853 shares issued and outstanding, as adjusted............. 223,204 Retained earnings......................................... 71,446 -------- Total shareholders' equity........................ 294,650 -------- Total capitalization............................ $543,016 ========
22 28 SELECTED CONSOLIDATED FINANCIAL DATA The following table sets forth selected consolidated financial data for the Company as of and for each of its most recent five fiscal years and the nine month periods ended October 3, 1996 and October 2, 1997. The consolidated financial data for the most recent five fiscal years have been derived from the Company's audited consolidated financial statements for such periods. The consolidated financial data for the nine month periods ended October 3, 1996 and October 2, 1997 have been derived from the Company's unaudited consolidated financial statements. In management's opinion, such unaudited consolidated financial statements include all adjustments (consisting of only normal recurring adjustments) necessary for a fair presentation of the information set forth therein. Results of operations for the nine month period ended October 2, 1997 are not necessarily indicative of the results that may be expected for the entire fiscal year ending January 1, 1998. This information should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the Company's Supplemental Consolidated Financial Statements and Notes thereto and Condensed Consolidated Financial Statements and Notes thereto incorporated by reference herein.
FOR THE NINE MONTHS FOR THE FISCAL YEAR ENDED AND AT FISCAL YEAR END AND AT PERIOD END ---------------------------------------------------------------------- ----------------------- DECEMBER 31, DECEMBER 30, DECEMBER 29, DECEMBER 28, JANUARY 2, OCTOBER 3, OCTOBER 2, 1992(1) 1993 1994 1995 1997 1996 1997 ------------ ------------ ------------ ------------ ---------- ---------- ---------- (IN THOUSANDS, EXCEPT PER SHARE DATA) STATEMENT OF INCOME DATA: Revenues..................... $167,588 $214,359 $265,005 $309,022 $389,193 $287,188 $348,508 Operating income............. 12,849 22,147 28,412 41,110 58,196 44,108 45,051 Income before extraordinary items...................... 6,107 8,716 12,702 17,953 25,817 18,644 23,777 Extraordinary items: Gain (loss) on extinguishment of debt... -- 190 (1,752) (448) (751) (751) (10,020) -------- -------- -------- -------- -------- -------- -------- Net income................... $ 6,107 $ 8,906 $ 10,950 $ 17,505 $ 25,066 $ 17,893 $ 13,757 Dividends (Neighborhood and Georgia State)............. (710) (739) (380) (433) (229) (229) -- -------- -------- -------- -------- -------- -------- -------- Net income applicable to common stock...... $ 5,397 $ 8,167 $ 10,570 $ 17,072 $ 24,837 $ 17,664 $ 13,757 ======== ======== ======== ======== ======== ======== ======== Earnings per common share before effects of extraordinary item: Primary.................... $ 0.39 $ 0.38 $ 0.43 $ 0.57 $ 0.74 $ 0.54 $ 0.64 Fully diluted.............. 0.29 0.34 0.43 0.57 0.74 0.54 0.64 Earnings per common share: Primary.................... 0.34 0.36 0.36 0.55 0.71 0.52 0.37 Fully diluted.............. 0.25 0.32 0.36 0.54 0.71 0.52 0.37 Weighted average shares and equivalents outstanding: Primary.................... 15,833 22,728 29,496 31,311 34,800 33,882 37,211 Fully diluted.............. 21,282 25,728 29,669 31,482 34,892 33,882 37,211 BALANCE SHEET DATA (AT END OF PERIOD): Total assets................. $137,424 $162,098 $252,630 $349,031 $488,825 $327,984 $583,655 Long-term obligations, including current maturities, and redeemable preferred stock............ 87,869 73,523 117,471 188,456 144,626 27,673 248,641 Total shareholders' equity............... 25,160 26,649 88,089 109,020 279,302 268,708 294,650
- --------------- (1) 1992 results of operations do not include the results of Georgia State. 23 29 DESCRIPTION OF BANK REVOLVING CREDIT FACILITY The Company's Bank Revolving Credit Facility permits borrowings of up to $250 million and bears interest, at the election of the Company, at the bank's prime lending rate or a rate determined on a spread over LIBOR (with the spread being based on the Company's financial performance and amount of outstanding borrowings). As of October 8, 1997, the Company had $122 million of indebtedness outstanding under the Bank Revolving Credit Facility, which indebtedness bore interest at a weighted average interest rate of 6.22% per annum as of such date. Such indebtedness was incurred primarily to finance acquisitions and to construct theatres. The Bank Revolving Credit Facility expires on October 7, 2002. The Bank Revolving Credit Facility contains several financial covenants. The Company must maintain, as at the end of each fiscal quarter, and at each funding or transaction date, a ratio of consolidated total indebtedness (as defined in the Bank Revolving Credit Facility) to theatre level cash flow (as defined in the Bank Revolving Credit Facility) at a maximum of 3.0 to 1.0. The Company must also maintain (i) a fixed charge coverage ratio (as defined in the Bank Revolving Credit Facility) of 1.75 to 1.0 as to any fiscal quarter end and (ii) minimum consolidated net worth of (A) not less than 90% of the Company's consolidated net worth on October 8, 1997, and (B) with respect to each fiscal quarter beginning after October 2, 1997, a minimum net worth equal to the immediately preceding fiscal quarter plus the sum of (x) 50% of net income (but not including any net losses) for the fiscal quarter then ended, (y) 100% of all proceeds realized by the Company from any private placement or public offering of its stock during the fiscal quarter then ended, and (z) 100% of all additions to stockholders' equity resulting from the issuance by the Company of its capital stock to pay for any theatres acquired during the fiscal quarter then ended. The Bank Revolving Credit Facility also contains covenants prohibiting, among other things, the Company's incurring additional debt, creating additional liens, making certain investments, becoming a party to a merger, unless the Company is the surviving corporation in the merger, selling all or substantially all of its assets or paying material cash dividends on its Common Stock. The Company's subsidiaries guarantee amounts outstanding under the Bank Revolving Credit Facility. 24 30 DESCRIPTION OF EXCHANGE NOTES The Old Notes were and the Exchange Notes will be issued under an indenture dated as of September 24, 1997 (the "Indenture"), between Regal Cinemas, Inc., as issuer (the "Company") and IBJ Schroder Bank & Trust Company, as trustee (the "Trustee"). The Exchange Notes are subject to all of the terms of the Indenture, and Holders of Exchange Notes are referred to the Indenture, a copy of which has been filed as an exhibit to the Registration Statement of which this Prospectus is a part. The form of the Exchange Notes and the Old Notes will be identical in all material respects except that the Exchange Notes have been registered under the Securities Act and, therefore will not bear restrictive legends restricting their transfer. The Exchange Notes will not represent new indebtedness of the Company and will rank pari passu with the Old Notes. Any provision of the Indenture which requires action by or approval of a specified percentage of the Holders of the Outstanding Notes shall require the approval of the Holders of such percentage of Outstanding Old Notes and Exchange Notes, in the aggregate. Upon the effectiveness of an Exchange Offer Registration Statement or Shelf Registration Statement, as the case may be, filed under the Securities Act with respect to the Notes, the Indenture will be subject to and governed by the Trust Indenture Act of 1939, as amended. The following summaries of certain material provisions of the Indenture do not purport to be complete, and where reference is made to particular provisions of the Indenture, such provisions, including the definitions of certain terms, are incorporated by reference as a part of such summaries or terms, which are qualified in their entirety by such reference. The definitions of certain capitalized terms used in the following summary are set forth below under "-- Certain Definitions." GENERAL The Notes will mature on October 1, 2007 and will be limited to $125 million aggregate principal amount. Each Note will bear interest at the rate set forth on the cover page hereof from September 24,1997 or from the most recent interest payment date to which interest has been paid, payable semiannually on April 1 and October 1 of each year, commencing April 1, 1998, to the person in whose name the Note (or any predecessor Note) is registered at the close of business on the March 15 or September 15 next preceding such interest payment date. Interest will be computed on the basis of a 360-day year of twelve, 30-day months. Principal of and premium, if any, and interest on the Notes will be payable, and the Notes will be exchangeable and transferable, at the office or agency of the Company in The City of New York (which initially will be the corporate trust office of the Trustee, One State Street, New York, New York 10004); provided, however, that payment of interest may be made at the option of the Company by check mailed to the person entitled thereto as shown on the Note Register. No service charge will be made for any registration of transfer or exchange or redemption of Notes, except for certain taxes or other governmental charges that may be imposed in connection with any registration of transfer or exchange. The Notes will not be entitled to the benefit of any sinking fund. FALL-AWAY EVENT In the event that the Notes achieve Investment Grade Status and no Event of Default or Default shall have occurred and be continuing (the occurrence of the foregoing events, being collectively referred to as the "Fall-away Event"), upon the request of the Company the covenants described under "-- Certain Covenants" will no longer be applicable to the Company and its Subsidiaries. See "-- Certain Covenants." As a result, upon the occurrence of the Fall-away Event the Notes will be entitled to substantially no covenant protection. 25 31 SUBORDINATION The Notes will be unsecured senior subordinated indebtedness of the Company ranking pari passu with all other existing and future senior subordinated indebtedness of the Company. The payment of all Obligations in respect of the Notes will be subordinated, as set forth in the Indenture, in right of payment to the prior payment in full in cash or Cash Equivalents of all Senior Indebtedness. In the event of any insolvency or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or other similar case or proceeding in connection therewith, relating to the Company or to its assets, or any liquidation, dissolution or other winding-up of the Company, whether voluntary or involuntary, or any assignment for the benefit of creditors or other marshalling of assets or liabilities of the Company, the holders of Senior Indebtedness will first be entitled to receive payment in full in cash or Cash Equivalents of all Senior Indebtedness, or provision shall be made for such payment in full in cash or Cash Equivalents to the satisfaction of the holders of Senior Indebtedness, before the Holders will be entitled to receive any payment or distribution of any kind or character from any source (other than any payment or distribution in the form of equity securities or subordinated securities of the Company or any successor obligor provided for by a plan of reorganization or readjustment that, in the case of any such subordinated securities, are subordinated in right of payment to all Senior Indebtedness that may at the time be outstanding to at least the same extent as the Notes are so subordinated as provided in the Indenture) (such equity securities or subordinated securities hereinafter being "Permitted Junior Securities") on account of all Obligations in respect of the Notes or on account of the purchase, deposit for defeasance or redemption or other acquisition of Notes. No payment (other than any payments made pursuant to the provisions described under "-- Defeasance and Covenant Defeasance of the Indenture" from monies or U.S. Government Obligations previously deposited with the Trustee) or distribution of any assets of the Company of any kind or character from any source, whether in cash, property or securities (other than Permitted Junior Securities) may be made by the Company on account of all Obligations in respect of the Notes or on account of the purchase, redemption, deposit for defeasance or other acquisition of Notes upon the occurrence of any default in payment (whether at stated maturity, upon scheduled installment, by acceleration or otherwise) of principal of, premium, if any, or interest in respect of any Senior Indebtedness beyond any applicable grace periods (a "Payment Default") until such Payment Default shall have been cured or waived or have ceased to exist or such Senior Indebtedness shall have been discharged or paid in full in cash or Cash Equivalents. No payment (other than any payments made pursuant to the provisions described under "-- Defeasance and Covenant Defeasance of the Indenture" from monies or U.S. Government Obligations previously deposited with the Trustee) or distribution of any assets of the Company of any kind or character from any source, whether in cash, property or securities (other than Permitted Junior Securities), may be made by the Company on account of all Obligations in respect of the Notes or on account of the purchase, redemption, deposit for defeasance or other acquisition of Notes for the period specified below ("Payment Blockage Period") upon the occurrence of any default with respect to any Designated Senior Indebtedness not covered by the immediately preceding paragraph pursuant to which the maturity thereof may be accelerated (a "Non-payment Default") and receipt by the Trustee of written notice thereof from the representatives of the holders of any Designated Senior Indebtedness. The Payment Blockage Period will commence upon the date of receipt by the Trustee of written notice from such representative and shall end on the earliest of (i) 179 days thereafter (provided any Designated Senior Indebtedness as to which notice was given shall not theretofore have been accelerated, in which case the provisions of the second preceding paragraph shall apply), (ii) the date on which such Non-payment Default is cured, waived or ceases to exist or such Designated Senior Indebtedness is discharged or paid in full in cash or Cash Equivalents, (iii) such Designated 26 32 Senior Indebtedness has been discharged or paid in full in cash or Cash Equivalents or (iv) such Payment Blockage Period shall have been terminated by written notice to the Trustee from the representative initiating such Payment Blockage Period, after which the Company will resume making any and all required payments in respect of the Notes, including any missed payments. In any event, not more than one Payment Blockage Period may be commenced during any period of 365 consecutive days. No event of default that existed or was continuing on the date of the commencement of any Payment Blockage Period will be, or can be, made the basis for the commencement of a subsequent Payment Blockage Period, unless such default has been cured or waived for a period of not less than 90 consecutive days. In the event that, notwithstanding the foregoing, the Trustee or any holder of the Notes shall have received any payment prohibited by the foregoing, then such payment shall be paid over to the representatives of such Designated Senior Indebtedness initiating the Payment Blockage Period, to be held in trust for distribution to the holders of Senior Indebtedness or, to the extent amounts are not then due in respect of Senior Indebtedness, prompt return to the Company, or otherwise as a court of competent jurisdiction shall direct. Failure by the Company to make any required payment in respect of the Notes when due or within any applicable grace period, whether or not occurring during a Payment Blockage Period, will result in an Event of Default and, thereafter, Holders will have the right to require repayment of the Notes in full. See "-- Events of Default". By reason of such subordination, in the event of liquidation, receivership, reorganization or insolvency of the Company, creditors of the Company who are holders of Senior Indebtedness may recover more, ratably, than the Holders, and assets which would otherwise be available to pay obligations in respect of the Notes will be available only after all Senior Indebtedness has been paid in full in cash or Cash Equivalents, and there may not be sufficient assets remaining to pay amounts due on any or all of the Notes. "Senior Indebtedness" means (i) all obligations of the Company, now or hereafter existing, under or in respect of any Working Capital Agreement, whether for principal, premium, if any, interest (including interest accruing after the filing of, or which would have accrued but for the filing of, a petition by or against the Company under the Bankruptcy Laws, whether or not such interest is allowed as a claim after such filing in any proceeding under such law), fees, expenses, indemnities, gross-ups or other payments thereunder and (ii) the principal of, premium, if any, and interest on all other Indebtedness of the Company (other than the Notes), whether outstanding on the date of the Indenture or thereafter Incurred, unless, in the case of any particular Indebtedness, the instrument creating or evidencing the same or pursuant to which the same is outstanding expressly provides that such Indebtedness shall not be senior in right of payment to the Notes. Notwithstanding the foregoing, "Senior Indebtedness" shall not include (i) Indebtedness evidenced by the Notes, (ii) Indebtedness of the Company that is expressly subordinated in right of payment to any Senior Indebtedness of the Company or the Notes, (iii) Indebtedness of the Company that by operation of law is subordinate to any general unsecured obligations of the Company, (iv) Indebtedness of the Company to the extent Incurred in violation of any covenant of the Indenture, (v) any liability for federal, state or local taxes or other taxes, owed or owing by the Company, (vi) trade account payables owed or owing by the Company, (vii) amounts owed by the Company for compensation to any employee, officer or director for services rendered to the Company, (viii) Indebtedness of the Company to any Subsidiary or any other Affiliate of the Company and (ix) Indebtedness which when Incurred and without respect to any election under Section 1111(b) of Title 11 of the United States Code is without recourse to the Company or any Subsidiary. "Designated Senior Indebtedness" means (i) all Senior Indebtedness under any Working Capital Agreement and (ii) any other Senior Indebtedness (a) which at the time of determination exceeds $25 million in aggregate principal amount, (b) which is specifically designated in the 27 33 instrument evidencing such Senior Indebtedness as "Designated Senior Indebtedness" by the Company and (c) as to which the Trustee has been given written notice of such designation. OPTIONAL REDEMPTION The Notes are redeemable, at the option of the Company, as a whole or in part, at any time on or after October 1, 2002, at the Redemption Prices (expressed as percentages of the principal amount thereof) set forth below together with accrued and unpaid interest to the Redemption Date, if redeemed during the 12-month period beginning on October 1 of the years indicated:
REDEMPTION YEAR PRICE - ---- ---------- 2002........................................................ 104.250% 2003........................................................ 102.833% 2004........................................................ 101.417% 2005 and thereafter......................................... 100.000%
If less than all of the Notes are to be redeemed at any time, selection of Notes for redemption will be made by the Trustee not more than 60 days prior to the Redemption Date by such method as the Trustee shall deem fair and appropriate; provided, however, that Notes will not be redeemed in amounts less than the minimum authorized denomination of $1,000. Notice of redemption shall be mailed by first class mail not less than 30 nor more than 60 days prior to the Redemption Date to each Holder of Notes to be redeemed at its registered address. If any Note is to be redeemed in part only, the notice of redemption that relates to such Note shall state the portion of the principal amount thereof to be redeemed. A new Note in a principal amount equal to the unredeemed portion thereof will be issued in the name of the Holder thereof upon cancellation of the original Note. On and after the Redemption Date, interest will cease to accrue on Notes or portions thereof called for redemption. CERTAIN COVENANTS The Indenture will provide that all of the following restrictive covenants will be applicable to the Company unless and until the Fall-away Event occurs. In such event, the Company will be released from its obligations to comply with the restrictive covenants described below as well as certain other obligations. The covenants that will be released upon the Fall-away Event are "Limitation on Consolidated Indebtedness," "Limitation on Restricted Payments," "Limitation on Transactions with Affiliates," "Limitation on Senior Subordinated Indebtedness" and clause (c) under the "Merger and Sale of Assets" covenant. LIMITATION ON CONSOLIDATED INDEBTEDNESS. The Company shall not, and shall not permit any of its Subsidiaries to, create, incur, assume or guarantee, or in any other manner become directly or indirectly liable for the payment of, any Indebtedness (excluding Permitted Indebtedness) unless at the time of such event and after giving effect thereto on a pro forma basis the Company's Consolidated EBITDA Ratio for the four (4) full fiscal quarters immediately preceding such event, taken as one period calculated on the assumption that such Indebtedness had been incurred on the first day of such four-quarter period, is greater than or equal to 2.0:1. LIMITATION ON RESTRICTED PAYMENTS. The Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly: (a) declare or pay any dividend on, or make any distribution in respect of, any shares of the Capital Stock of the Company or any of its Subsidiaries (excluding dividends or distributions payable in shares of its Capital Stock or in options, warrants or other rights to purchase such Capital Stock, but including dividends or distributions payable in Redeemable Capital Stock or in options, warrants or other rights to purchase Redeemable Capital Stock (other than dividends on such Redeemable Capital Stock payable in shares of such 28 34 Redeemable Capital Stock)) held by any Person other than the Company or any of its Wholly Owned Subsidiaries; or (b) purchase, redeem or acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than any Wholly Owned Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock. (such payments or any other actions described in clauses (a), and (b) above are collectively referred to as "Restricted Payments") unless at the time of and after giving effect to the proposed Restricted Payment (the amount of any such Restricted Payment, if other than cash, as determined by the Board of Directors, whose determination shall be conclusive and evidenced by a Board Resolution), (1) no Default or Event of Default shall have occurred and be continuing, (2) the Company could incur $1.00 of additional Indebtedness (other than Permitted Indebtedness) under the provisions of "Limitation on Consolidated Indebtedness" and (3) the aggregate amount of all Restricted Payments declared or made after the Closing Date (including the proposed Restricted Payment) does not exceed the sum of: (i) (A) Consolidated EBITDA for the Restricted Payments Computation Period minus (B) 2 times Consolidated Interest Expense for the Restricted Payments Computation Period; (ii) the aggregate net proceeds, including the Fair Market Value of property other than cash (as determined by the Board of Directors, whose determination shall be conclusive, except that for any property whose Fair Market Value exceeds $10 million such Fair Market Value shall be confirmed by an independent appraisal obtained by the Company), received after the Closing Date by the Company from the issuance or sale (other than to any of its Subsidiaries) of shares of Capital Stock of the Company (other than Redeemable Capital Stock) or warrants, options or rights to purchase such shares of Capital Stock; (iii) the aggregate net proceeds, including the Fair Market Value of property other than cash (as determined by the Board of Directors, whose determination shall be conclusive, except that for any property whose Fair Market Value exceeds $10 million such Fair Market Value shall be confirmed by an independent appraisal obtained by the Company), received after the Closing Date by the Company from debt securities that have been converted into or exchanged for Capital Stock of the Company (other than Redeemable Capital Stock) to the extent such debt securities were originally sold for such net proceeds plus the aggregate cash received by the Company at the time of such conversion; and (iv) $100 million. Notwithstanding the foregoing limitation, (a) the Company may (i) pay dividends on its Capital Stock within sixty days of the declaration thereof if, on the declaration date, such dividends could have been paid in compliance with the foregoing limitation or (ii) acquire, redeem or retire Capital Stock in exchange for, or in connection with a substantially concurrent issuance of Capital Stock of the Company (other than Redeemable Capital Stock) and (b) the term "Restricted Payments" shall not include any dividend on, or distribution in respect of, any shares of the Capital Stock of a Person that is acquired by the Company in a business combination accounted for as a pooling of interests in accordance with Accounting Principles Board Opinions No. 16 (or any successor thereto) ("APB 16") provided such dividend or distribution is declared and paid prior to the date of such acquisition and was not in contemplation of such acquisition within the requirements and interpretations of APB 16. LIMITATION ON TRANSACTIONS WITH AFFILIATES. The Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly enter into or suffer to exist any transaction or series of related transactions (including, without limitation, the sale, purchase, exchange or lease of assets, property or services) with any Affiliate of the Company (other than a Wholly Owned Subsidiary of the Company) involving aggregate consideration in excess of $5.0 million unless (a) such transaction or series of transactions is on terms that are no less favorable to the Company or such 29 35 Subsidiary, as the case may be, than would be available at the time of such transaction or series of transactions in a comparable arm's-length transaction with a Person that is not an Affiliate of the Company, (b) such transaction or series of transactions is in the best interests of the Company and (c) with respect to a transaction or series of transactions involving aggregate consideration in excess of $50.0 million, a majority of disinterested members of the Board of Directors determines that such transaction or series of transactions complies with clauses (a) and (b) above, as evidenced by a Board Resolution. Notwithstanding the foregoing limitation, the Company and its Subsidiaries may enter into or suffer to exist the following: (i) any transaction pursuant to any contract in existence on the Closing Date; (ii) any Restricted Payment permitted to be made pursuant to the provisions of "Limitation on Restricted Payments" above; (iii) any transaction or series of transactions between the Company and one or more of its Subsidiaries or between two or more of its Subsidiaries (provided that no more than 5% of the Capital Stock in any such Subsidiary is owned, directly or indirectly (other than by direct or indirect ownership of Capital Stock in the Company), by any Affiliate of the Company other than a Subsidiary) and (iv) the payment of compensation (including amounts paid pursuant to employee benefit plans) for the personal services of officers, directors and employees of the Company or any of its Subsidiaries. LIMITATION ON SENIOR SUBORDINATED INDEBTEDNESS. The Company will not incur, create, issue, assume, guarantee or otherwise become liable for any Indebtedness that is subordinate or junior in right of payment to any Senior Indebtedness and senior in right of payment to the Notes. MERGER AND SALE OF ASSETS The Company shall not, in a single transaction or through a series of related transactions, (i) consolidate with or merge with or into any other Person or permit any other Person to consolidate with or merge into the Company or (ii) directly or indirectly, sell, assign, transfer, lease or otherwise dispose of all or substantially all of its properties and assets to any Person unless (a) either the Company shall be the continuing Person or the Person (if other than the Company) formed by such consolidation or into which the Company is merged or the Person that acquired such properties and assets of the Company by assignment, transfer, lease or other disposition (the "Surviving Entity") shall be a corporation duly organized and validly existing under the laws of the United States of America, any state thereof or the District of Columbia and shall, in either case, expressly assume by a supplemental indenture, all the obligations of the Company under the Notes and the Indenture, (b) immediately before and after giving effect to such transaction on a pro forma basis, no Default or Event of Default shall have occurred and be continuing, (c) immediately after giving effect to such transaction on a pro forma basis, the Surviving Entity could incur $1.00 of additional Indebtedness (other than Permitted Indebtedness) pursuant to the Consolidated EBITDA Ratio test described under the "Limitation on Consolidated Indebtedness" above, and (d) the Company shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel as specified in the Indenture. CHANGE OF CONTROL Upon the occurrence of a Change of Control, the Company will be required to make an offer (a "Change of Control Offer") to purchase all Outstanding Notes at a purchase price (the "Change of Control Purchase Price") equal to 101% of their principal amount plus accrued and unpaid interest, if any, to the date of purchase. Within 30 days following the date upon which the Change of Control occurred, the Company must send, by first class mall, a notice to each Holder, with a copy to the Trustee, which notice shall govern the terms of the Change of Control Offer. Such notice will state, among other things, the purchase date, which must be no earlier than 30 days nor later than 60 days from the date such notice is mailed, other than as may be required by law (the "Change of Control Payment Date"). 30 36 The Change of Control Offer is required to remain open for at least 20 Business Days and until the close of business on the Change of Control Payment Date. The Change of Control provision of the Notes may in certain circumstances make it more difficult or discourage a takeover of the Company and, as a result, may make removal of incumbent management more difficult. The Change of Control provision, however, is not the result of the Company's knowledge of any specific effort to accumulate the Company's stock or to obtain control of the Company by means of a merger, tender offer, solicitation or otherwise, or part of a plan by management to adopt a series of anti-takeover provisions. Instead, the Change of Control provision is a result of negotiations between the Company and the Initial Purchasers. The Company is not presently in discussions or negotiations with respect to any pending offers which, if accepted, would result in a transaction involving a Change of Control, although it is possible that the Company would decide to do so in the future. The Company's Bank Revolving Credit Facility provides that certain change of control events with respect to the Company would constitute a default thereunder. In such circumstances, the subordination provisions in the Indenture could restrict payments to the Holders of the Notes. Finally, the Company's ability to pay cash to the Holders of the Notes in connection with a Change of Control may be limited to the Company's then existing financial resources. There can be no assurance that sufficient funds will be available when necessary to make any required purchases. The provisions of the Indenture would not necessarily afford Holders of the Notes protection in the event of a highly leveraged transaction, reorganization, restructuring, merger or similar transaction involving the Company that may adversely affect the Holders. If an offer is made to repurchase the Notes pursuant to a Change of Control Offer, the Company will comply with all tender offer rules under state and Federal securities laws, including, but not limited to, Section 14(e) under the Exchange Act and Rule 14(e) thereunder, to the extent applicable to such offer. ADDITIONAL INFORMATION Anyone who receives this Prospectus may obtain a copy of the Indenture and the Registration Rights Agreement without charge by writing to Regal Cinemas, Inc., Attention: Lewis Frazer III, Chief Financial Officer, 7132 Commercial Park Drive, Knoxville, Tennessee 37918 (telephone: (423) 922-1123). CERTAIN DEFINITIONS Set forth below are certain defined terms used in the Indenture. Reference is made to the Indenture for the definition of any other capitalized term used herein for which no definition is provided. "Acquired Indebtedness" of any particular Person shall mean Indebtedness of any other Person existing at the time such other Person merged with or into or became a Subsidiary of such particular Person or assumed by such particular Person in connection with the acquisition of assets from any other Person, and not incurred by such other Person in connection with, or in contemplation of, such other Person merging with or into such particular Person or becoming a Subsidiary of such particular Person or such acquisition. "Affiliate" shall mean, with respect to any specified Person, (i) any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person or (ii) any other Person that owns, directly or indirectly, 10% or more of such Person's outstanding Capital Stock or any officer or director of any such Person or other Person or with respect to any natural Person, any person having a relationship with such Person by blood, marriage or adoption not more remote than first cousin. For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies 31 37 of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Asset Disposition" by any Person means any transfer, conveyance, sale, lease or other disposition by such Person or any of its Subsidiaries (including any issuance or sale by a Subsidiary of Capital Stock of such Subsidiary, and including a consolidation or merger or other sale of any such Subsidiary with, into or to another Person in a transaction in which such Subsidiary ceases to be a Subsidiary, but excluding a disposition by a Subsidiary of such Person to such Person or a Wholly Owned Subsidiary of such Person or by such Person to a Wholly Owned Subsidiary of such Person) of (i) any shares of Capital Stock (other than directors' qualifying shares) or other ownership interests of a Subsidiary of such Person, (ii) substantially all of the assets of such Person or any of its Subsidiaries representing a division or line of business or (iii) other assets or rights of such Person or any of its Subsidiaries outside of the ordinary course of business. Notwithstanding the foregoing, the term "Asset Disposition" shall not include a disposition by a Subsidiary of the Company to the Company or a Wholly Owned Subsidiary or by the Company or a Subsidiary to a Wholly Owned Subsidiary. "Board of Directors" shall mean the Board of Directors of the Company or any committee of such Board of Directors duly authorized to act under the Indenture. "Board Resolution" shall mean a copy of a resolution, certified by the Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee. "Business Day" shall mean any day other than a Saturday or Sunday or other day on which banks in New York, New York, Knoxville, Tennessee or the city in which the Trustee's Office is located are authorized or required to be closed, or, if no Note is outstanding, the city in which the principal corporate trust office of the Trustee is located. "Capital Lease Obligation" of any Person shall mean any obligations of such Person and its Subsidiaries on a consolidated basis under any capital lease of real or personal property which, in accordance with GAAP, has been recorded as a capitalized lease obligation. "Capital Stock" of any Person shall mean any and all shares, interests, participations or other equivalents (however designated) of such Person's capital stock, any rights (other than debt securities convertible into capital stock), warrants or options to acquire such capital stock, whether now outstanding or issued after the date of the Indenture. "Cash Equivalents" means (i) United States dollars, (ii) securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality, (iii) certificates of deposit and eurodollar time deposits with maturities of six months or less from the date of acquisition, bankers' acceptances with maturities not exceeding six months and overnight bank deposits, in each case with any United States domestic commercial bank having capital and surplus in excess of $500 million and a Keefe Bank Watch Rating of "B" or better, (iv) repurchase obligations with a term of not more than seven days for underlying securities of the types described in clauses (ii) and (iii) entered into with any financial institution meeting the qualifications specified in clause (iii) above, (v) commercial paper having one of the two highest rating categories obtainable from Moody's or S&P in each case maturing within six months after the date of acquisition and (vi) readily marketable direct obligations issued by any State of the United States of America or any political subdivision thereof having one of the two highest rating categories obtainable from Moody's or S&P. "Change of Control" shall mean the occurrence of, after the date of the Indenture, either of the following events: (a) any Person or any Persons acting together that would constitute a group (for purposes of Section 13(d) of the Exchange Act, or any successor provision thereto) (a "Group"), together with any Affiliates thereof, shall beneficially own (within the meaning of Rule 13d-3 under 32 38 the Exchange Act, or any successor provision thereto), directly or indirectly, at least 50% of the aggregate voting power of all classes of Voting Stock of the Company (for the purposes of this clause (a) a Person shall be deemed to beneficially own the Voting Stock of a corporation that is beneficially owned (as defined above) by another corporation (a "parent corporation") if such person beneficially owns (as defined above) at least 50% of the aggregate voting power of all classes of Voting Stock of such parent corporation) or (b) any Person or Group, together with any Affiliates thereof, shall succeed in having a sufficient number of its nominees elected to the Board of Directors of the Company such that such nominees when added to any existing director remaining on the Board of Directors of the Company after such election who is an Affiliate of such Group, will constitute a majority of the Board of Directors of the Company. "Closing Date" shall mean the date on which the Notes are originally issued under the Indenture. "Consolidated EBITDA" of any Person means for any period, on a consolidated basis in accordance with GAAP for such Person and its consolidated Subsidiaries, without duplication, the sum of the amounts for such period of (i) Consolidated Net Income, (ii) Consolidated Interest Expense, (iii) Consolidated Income Tax Expense (other than income taxes attributable to extraordinary, unusual or non-recurring gains or losses), (iv) depreciation and amortization expense, (v) other non-cash charges, (vi) other non-operating expenses that have been deducted in the determination of Consolidated Net Income and (vii) non-recurring expenses and charges incurred by such Person in connection with or as a result of the acquisition of another Person in a business combination accounted for as a pooling of interests in accordance with Accounting Principles Board Opinions No. 16 (or any successor thereto); provided, however that for each such consolidated Subsidiary the items (i) through (vii) shall be included in such sum only to the extent and in the same proportion that the Consolidated Net Income of such consolidated Subsidiary was included in calculating the Consolidated Net Income of such Person. "Consolidated EBITDA Ratio" of any Person means for any period the ratio of (i) Consolidated EBITDA of such Person for such period to (ii) the sum of (A) Consolidated Interest Expense of such Person for such period, plus (B) the annual interest expense with respect to any Indebtedness Incurred or proposed to be incurred by such person or its consolidated Subsidiaries since the beginning of such period to the extent not included within clause (ii) (A), minus (C) Consolidated Interest Expense of such Person with respect to any Indebtedness that is no longer outstanding or that will no longer be outstanding as a result of the transaction with respect to which the Consolidated EBITDA Ratio is being calculated, to the extent included within clause (ii) (A); provided, however that in making such computation, the Consolidated Interest Expense of such Person attributable to interest on any Indebtedness bearing a floating interest rate shall be computed on a pro forma basis as if the rate in effect on the date of computation had been the applicable rate for the entire period; and provided, further, that, in the event such Person or any of its consolidated Subsidiaries has made Asset Dispositions or acquisitions of assets not in the ordinary course of business (including by merger, consolidation or purchase of Capital Stock) during or after such period, the computation of the Consolidated EBITDA Ratio (and for the purpose of such computation, the calculation of Consolidated Net Income, Consolidated Interest Expense and Consolidated EBITDA) shall be made on a pro forma basis as if the Asset Dispositions or acquisitions had taken place on the first day of such period. "Consolidated Income Tax Expense" of any Person means for any period the consolidated provision for income taxes of such Person and its consolidated Subsidiaries for such period determined in accordance with generally accepted accounting principles. "Consolidated Interest Expense" of any Person shall mean, on a consolidated basis for such Person and its consolidated Subsidiaries, without duplication, for any period, as applied to any Person, (i) the sum of (a) the aggregate of the interest expense on Indebtedness of such Person and its consolidated Subsidiaries for such period, on a consolidated basis, including, without 33 39 limitation, (1) amortization of debt discount, (2) the net cost under Interest Rate Protection Agreements (including amortization of discounts), (3) the interest portion of any deferred payment obligation and (4) accrued interest, plus (b) the interest component of the Capital Lease Obligations paid, accrued and/or scheduled to be paid or accrued by such Person and its consolidated Subsidiaries during such period minus (ii) the cash interest income (exclusive of deferred financing fees) of such Person and its consolidated Subsidiaries during such period, in each case as determined in accordance with GAAP consistently applied. "Consolidated Net Income" of any Person means for any period the consolidated net income (or loss) of such Person and its consolidated Subsidiaries for such period determined in accordance with GAAP; provided that there shall be excluded therefrom, (a) the net income (or loss) of any Person that is not a consolidated Subsidiary of such Person except to the extent of the amount of dividends or other distributions actually paid to such Person by such other Person during such period, (b) extraordinary gains and losses (and any unusual gains and losses arising outside the ordinary course of business not included in extraordinary gains and losses), (c) net gains and losses in respect of Asset Dispositions and (d) the cumulative effect of changes in accounting principles and (e) the tax effect of any of the items described in clauses (a) through (d) above. "Currency Hedging Obligations" shall mean the obligations of any Person pursuant to an arrangement designed to protect such Person against fluctuations in currency exchange rates. "Debt Rating" shall mean the rating assigned to the Notes by Moody's or S&P as the case may be. "Default" means any event which is, or after notice or the passage of time or both, would be an Event of Default. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. "Fair Market Value" shall mean, with respect to any asset or property, the sale value that would be obtained in an arm's length transaction between an informed and willing seller under no compulsion to sell and an informed and willing buyer under no compulsion to buy. "Generally Accepted Accounting Principles" or "GAAP" shall mean generally accepted accounting principles in the United States, consistently applied. "Guarantee" shall mean, with respect to any Person, any obligation, contingent or otherwise, of such Person directly or indirectly guaranteeing any Indebtedness or other obligation of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of such Person (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation of such other Person (whether arising by virtue of partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement conditions or otherwise) or (ii) entered into for purposes of assuring in any other manner the obligee of such Indebtedness or other obligation of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part); provided that the term "Guarantee" shall not include endorsements for collection or deposit in the ordinary course of business. The term "Guarantee" used as a verb has a corresponding meaning. "Guaranteed Indebtedness" of any Person shall mean, without duplication, all Indebtedness of any other Person referred to in the definition of Indebtedness and all dividends of other Persons for the payment of which, in either case, such Person is directly or Indirectly responsible or liable as obligor, guarantor or otherwise. "Incur" means, with respect to any Indebtedness or other obligation of any Person, to create, issue, incur (by conversion, exchange or otherwise), assume, Guarantee or otherwise become liable in respect of such Indebtedness or other obligation or the recording, as required pursuant to GAAP or otherwise, of any such Indebtedness or other obligation on the balance sheet of such 34 40 Person (and "Incurrence," "Incurred," "Incurrable" and "Incurring" shall have meanings correlative to the foregoing); provided, however, that a change in GAAP that results in an obligation of such Person that exists at such time becoming Indebtedness shall not be deemed an Incurrence of such Indebtedness. "Indebtedness" shall mean, with respect to any Person, without duplication, (i) all indebtedness of such Person for borrowed money or for the deferred purchase price of property or services, excluding any trade payables and other accrued current liabilities incurred in the ordinary course of business, but including, without limitation, all obligations of such Person in connection with any letters of credit and acceptances issued under letter of credit facilities, acceptance facilities or other similar facilities, now or hereafter outstanding, (ii) all obligations of such Person evidenced by bonds, notes, debentures or other similar instruments, (iii) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even if the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), but excluding trade accounts payable arising in the ordinary course of business, (iv) every obligation of such Person issued or contracted for as payment in consideration of the purchase by such Person or a Subsidiary of such Person of the Capital Stock or substantially all of the assets of another Person or in consideration for the merger or consolidation with respect to which such Person or Subsidiary of such Person was a party, (v) all Indebtedness referred to in clauses (i) through (iv) above of other Persons and all dividends of other Persons, the payment of which is secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon or in property (including, without limitation, accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such Indebtedness, (vi) all Guaranteed Indebtedness of such Person, (vii) all obligations under Interest Rate Protection Agreements of such Person, (viii) all Currency Hedging Obligations of such Person and (ix) any amendment, supplement, modification, deferral, renewal, extension or refunding of any liability of the types referred to in clauses (i) through (viii) above. "Interest Rate Protection Agreement" shall mean any interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedge agreement, option or future contract or other similar agreement or arrangement designed to protect the Company or any of its Subsidiaries against fluctuations in interest rates. "Investment Grade Status" exists as of a date and thereafter if at such date either (i) the Debt Rating of Moody's is at least Baa3 (or the equivalent) or higher or (ii) the Debt Rating of S&P is at least BBB- (or the equivalent) or higher. "Lien" shall mean any mortgage, lien (statutory or other), pledge, security interest, encumbrance, claim, hypothecation, assignment for security, deposit arrangement or preference or other security agreement of any kind or nature whatsoever. A Person shall be deemed to own subject to a Lien any property which it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement relating to Indebtedness of such Person. The right of a distributor to the return of its film held by a Person under a film licensing agreement is not a Lien as used herein. Reservation of title under an operating lease by the lessor and the interest of the lessee therein are not Liens as used herein. "Maturity" means, with respect to any Note, the date on which the principal of such Note becomes due and payable as provided in such Note or the Indenture, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise. "Moody's" shall mean Moody's Investor Service, Inc. or any successor to the rating agency business thereof. 35 41 "Non-Recourse Indebtedness" shall mean Indebtedness as to which (i) none of the Company or any of its Subsidiaries (a) provides credit support (including any undertaking, agreement or instrument which could constitute Indebtedness) or (b) is directly or indirectly liable and (ii) no default with respect to such Indebtedness (including any rights which the holders thereof may have to take enforcement action against the relevant Unrestricted Subsidiary or its assets) would permit (upon notice, lapse of time or both) any holder of any other Indebtedness of the Company or its Subsidiaries (other than Non-Recourse Indebtedness) to declare a default on such other Indebtedness or cause the payment thereof to be accelerated or payable prior to its stated maturity. "Obligations" means any principal (including reimbursement obligations and guarantees), premium, if any, interest (including interest accruing on or after the filing of, or which would have accrued but for the filing of, any petition in bankruptcy or for reorganization relating to the Company whether or not a claim for post-filing interest is allowed in such proceedings), penalties, fees, expenses, indemnifications, reimbursements, claims for rescission, damages, gross-up payments and other liabilities payable under the documentation governing any Indebtedness or otherwise. "Opinion Of Counsel" shall mean a written opinion of counsel to the Company or any other Person reasonably satisfactory to the Trustee. "Permitted Indebtedness" shall mean the following: (i) Indebtedness of the Company under any Working Capital Agreement in an aggregate principal amount at any one time outstanding not to exceed the sum of $300 million; (ii) Indebtedness of the Company under the Notes (including any Exchange Notes); (iii) Indebtedness of the Company (other than Indebtedness described under any clause of this definition) outstanding on the Closing Date after giving effect to the application of the proceeds of the Notes; (iv) Indebtedness of the Company or any of its Subsidiaries consisting of Permitted Interest Rate Protection Agreements; (v) Indebtedness owed by the Company to any Wholly Owned Subsidiary of the Company or Indebtedness owed by a Subsidiary of the Company to the Company or a Wholly Owned Subsidiary of the Company; (vi) Indebtedness which is exchanged for or the proceeds of which are used to refinance or refund, or any extension or renewal of, outstanding Indebtedness Incurred pursuant to clause (iii) of this paragraph (each of the foregoing, a "refinancing") in an aggregate principal amount not to exceed the principal amount of the Indebtedness so refinanced plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness so refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing by means of a tender offer or privately negotiated repurchase, plus the expenses of the Company or the Subsidiary, as the case may be, incurred in connection with such refinancing; (vii) Indebtedness of any Subsidiary Incurred in connection with the Guarantee of Indebtedness of the Company; (viii) Indebtedness relating to Currency Hedging Obligations entered into solely to protect the Company or any of its Subsidiaries from fluctuations in currency exchange rates and not to speculate on such fluctuations; (ix) Capital Lease Obligations of the Company or any of its Subsidiaries; (x) Indebtedness of the Company or any of its Subsidiaries in connection with one or more standby letters of credit or performance bonds issued in the ordinary course of business or pursuant to self-insurance obligations; 36 42 (xi) Indebtedness represented by property, liability and workers' compensation insurance (which may be in the form of letters of credit); (xii) Acquired Indebtedness, provided that such Indebtedness, if Incurred by the Company, would be in compliance with "Limitation on Consolidated Indebtedness"; (xiii) Indebtedness not otherwise permitted to be incurred pursuant to clauses (i) through (xii) above which, together with any other Indebtedness pursuant to this clause (xiii), has an aggregate principal amount that does not exceed $100 million at any time outstanding. "Permitted Interest Rate Protection Agreements" shall mean, with respect to any Person, Interest Rate Protection Agreements entered into in the ordinary course of business by such Person that are designed to protect such Person against fluctuations in interest rates with respect to Permitted Indebtedness and that have a notional amount no greater than the payment due with respect to Permitted Indebtedness hedged thereby. "Person" means any individual, corporation, partnership, limited liability company, joint venture, association, joint stock company, trust, estate, unincorporated organization or government or any agency or political subdivision thereof. "Redeemable Capital Stock" shall mean any Capital Stock that, either by its terms, by the terms of any security into which it is convertible or exchangeable or otherwise, is or upon the happening of an event or passage of time would be required to be redeemed prior to the final Stated Maturity of the Notes or is redeemable at the option of the holder thereof at any time prior to such final Stated Maturity, or is convertible into or exchangeable for debt securities at any time prior to such final Stated Maturity at the option of the holder thereof. "Restricted Payments" shall have the meaning set forth in the "Limitation on Restricted Payments" covenant. "Restricted Payments Computation Period" shall mean the period (taken as one accounting period) from the Closing Date to the last day of the Company's fiscal quarter preceding the date of the applicable proposed Restricted Payment. "S&P" shall mean Standard & Poor's Ratings Group, a division of McGraw Hill, Inc., or any successor to the rating agency business thereof. "Stated Maturity" when used with respect to any Note or any installment of interest thereof, means the date specified in such Note as the fixed date on which the principal of such Note or such installment of interest is due and payable. "Subsidiary" of any person shall mean (i) any corporation of which more than 50% of the outstanding shares of Capital Stock having ordinary voting power for the election of directors is owned directly or indirectly by such Person and (ii) any partnership, limited liability company, association, joint venture or other entity in which such Person, directly or indirectly, has more than a 50% equity interest, and, except as otherwise indicated herein, references to Subsidiaries shall refer to Subsidiaries of the Company. Notwithstanding the foregoing, for purposes hereof, an Unrestricted Subsidiary shall not be deemed a Subsidiary of the Company other than for purposes of the definition of "Unrestricted Subsidiary" unless the Company shall have designated in writing to the Trustee an Unrestricted Subsidiary as a Subsidiary. A designation of an Unrestricted Subsidiary as a Subsidiary may not thereafter be rescinded. "Surviving Entity" shall have the meaning set forth under "Merger and Sale of Assets." "Unrestricted Subsidiary" shall mean a Subsidiary of the Company designated in writing to the Trustee (i) whose properties and assets, to the extent they secure Indebtedness, secure only Non-Recourse Indebtedness, (ii) that has no Indebtedness other than Non-Recourse Indebtedness and (iii) that has no Subsidiaries. 37 43 "Voting Stock" shall mean stock of the class or classes pursuant to which the holders thereof have the general voting power under ordinary circumstances to elect at least a majority of the board of directors, managers or trustees of a corporation (irrespective of whether or not at the time, stock of any other class or classes shall have or might have voting power by reason of the happening of any contingency). "Wholly Owned Subsidiary" of any Person shall mean a Subsidiary of such Person, all of the Capital Stock (other than Directors' qualifying shares) or other ownership interests of which shall at the time be owned by such Person or by one or more Wholly Owned Subsidiaries of such Person or by such Person and one or more Wholly Owned Subsidiaries of such Person. "Working Capital Agreement" shall mean (i) the Second Amended and Restated Loan Agreement dated as of July 7, 1993, as amended, among the Company and the lender named therein and (ii) any other agreement or agreements between the Company and a financial institution or institutions providing for the making of loans or advances on a revolving basis, term loans, the issuance of letters of credit and/or the creation of the bankers' acceptances to fund the Company's general corporate requirements. EVENTS OF DEFAULT The following will be "Events of Default" under the Indenture: (i) default in the payment of any interest on any Note when it becomes due and payable and continuance of such default for a period of 30 days; (ii) default in the payment of the principal of or premium, if any, on any Note at its Maturity (upon acceleration, optional redemption, required purchase or otherwise); (iii) default in the payment of principal and interest on Notes required to be purchased pursuant to an Offer to Purchase as described under "Change of Control" when due and payable; (iv) default in the performance, or breach, of any covenant or warranty of the Company contained in the Indenture (other than a default in the performance, or breach, of a covenant or warranty which is specifically dealt with in clause (i), (ii) or (iii) above) and continuance of such default or breach for a period of 60 days after written notice shall have been given to the Company by the Trustee or to the Company and the Trustee by the holders of at least 25% in aggregate principal amount of the Notes then outstanding; (v) (A) one at more defaults in the payment of principal of or premium, if any, on Indebtedness of the Company or any Subsidiary aggregating $5.0 million or more, when the same becomes due and payable at the stated maturity thereof and such default or defaults shall have continued after any applicable grace period and shall not have been cured or waived or (B) indebtedness of the Company or any Subsidiary aggregating $5.0 million or more shall have been accelerated or otherwise declared due and payable, or required to be prepaid or repurchased (other than by regularly scheduled prepayment) prior to the stated maturity thereof; (vi) any holder of any Indebtedness in excess of $5.0 million in the aggregate of the Company or any Subsidiary shall notify the Trustee of the intended sale or disposition of any assets of the Company or any Subsidiary that have been pledged to or for the benefit of such Person to secure such Indebtedness or shall commence proceedings, or take action (including by way of set-off) to retain in satisfaction of any such Indebtedness, or to collect on, seize, dispose of or apply, any such asset of the Company or any Subsidiary pursuant to the terms of any agreement or instrument evidencing any such Indebtedness of the Company or any Subsidiary or in accordance with applicable law; (vii) one or more final judgments or orders shall be rendered against the Company or any Subsidiary for the payment of money, either individually or in an aggregate amount, in excess of 38 44 $5.0 million and shall not be discharged and either (A) an enforcement proceeding shall have been commenced by any creditor upon such judgment or order or (B) there shall have been a period of 60 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, was not in effect; and (viii) the occurrence of certain events of bankruptcy, insolvency or reorganization with respect to the Company or any Subsidiary. If an Event of Default (other than an Event of Default specified in clause (viii) above) shall occur and be continuing, the Trustee or the Holders of not less than 25% in principal amount of the Notes then outstanding may declare the principal of all Notes immediately due and payable, provided, however, that after a declaration of acceleration, but before a judgment or decree for payment of the money due has been obtained by the Trustee, the Holders of a majority in principal amount of the Outstanding Notes, by written notice to the Company and the Trustee, may rescind and annul such declaration and its consequences, subject to certain conditions. If an Event of Default specified in clause (viii) above occurs and is continuing, then the principal of all the Notes shall become due and payable without any declaration or other act on the part of the Trustee or any Holder. The Indenture contains a provision entitling the Trustee, subject to the duty of the Trustee during the existence of an Event of Default to act with the required standard of care, to be indemnified by the Holders of Notes before proceeding to exercise any right or power under the Indenture at the request of such Holders. The Indenture provides that the Holders of a majority in aggregate principal amount of the Notes then Outstanding may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred upon the Trustee. During the existence of an Event of Default, the Trustee is required to exercise such rights and powers vested in it under the Indenture and use the same degree of care and skill in its exercise as a prudent person would exercise under the circumstances in the conduct of such person's own affairs. The Trust Indenture Act of 1939 contains limitations on the rights of the Trustee, should it become a creditor of the Company, to obtain payment of claims in certain cases or to realize on certain property received by it in respect of any such claims, as security or otherwise, The Trustee is permitted to engage in other transactions, provided that if it acquires any conflicting interest it must eliminate such conflict upon the occurrence of an Event of Default or else resign. The Company will be required to furnish to the Trustee annually a statement as to any default by the Company in the performance and observance of its obligations under the Indenture. DEFEASANCE AND COVENANT DEFEASANCE OF THE INDENTURE The Company may, at its option, and at any time, elect to have the obligations of the Company discharged with respect to all Outstanding Notes ("defeasance"). Such defeasance means that the Company shall be deemed to have paid and discharged the entire Indebtedness represented by the Outstanding Notes and to have satisfied its other obligations under the Indenture, except for the following which shall survive until otherwise terminated or discharged: (i) the rights of Holders of Outstanding Notes to receive payments in respect of the principal of, premium, if any, and interest on such Notes when such payments are due, (ii) the Company's obligations with respect to the Notes relating to the issuance of temporary Notes, the registration, transfer and exchange of Notes, the replacement of mutilated, destroyed, lost or stolen Notes, the maintenance of an office or agency in The City of New York, the holding of money for security payments in trust and statements as to compliance with the Indenture, (iii) its obligations in connection with the rights, powers, trusts, duties and immunities of the Trustee and (iv) the defeasance provisions of the Indenture. In addition, the Company may at its option and at any time, elect to be released from its obligations 39 45 with respect to certain of its restrictive covenants under the Indenture ("covenant defeasance") and any omission to comply with such obligations shall not constitute a Default or an Event of Default with respect to the Notes, and in the event covenant defeasance occurs, certain events (not including non-payment, bankruptcy and insolvency events) described under "Events of Default" will no longer constitute Events of Default with respect to the Notes. In order to exercise either defeasance or covenant defeasance, (i) the Company must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders, cash in U.S., dollars, certain U.S. government obligations, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of (and premium, if any, on) and interest on the Outstanding Notes on the Stated Maturity (or Redemption Date, if applicable) of such principal (and premium, if any) or installment of interest, (ii) in the case of defeasance, the Company shall have delivered to the Trustee an Opinion of Counsel stating that (x) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (y) since the date of this Offering Circular, there has been a change in the applicable United States federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders of the Outstanding Notes will not recognize income, gain or loss for United States federal income tax purposes as a result of such defeasance and will be subject to United States federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such defeasance had not occurred, (iii) in the case of covenant defeasance, the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that the Holders of the Outstanding Notes will not recognize income, gain or loss for United States federal income tax purposes as a result of such covenant defeasance and will be subject to United States federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such covenant defeasance had not occurred, (iv) the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that such deposit shall not cause the Trustee or the trust so created to be subject to the Investment Company Act of 1940 and (v) the Company must comply with certain other conditions, including that such defeasance or covenant defeasance will not result in a breach or violation of, or constitute a default under, the Indenture or any material agreement or instrument to which the Company is a party or by which it is bound. MODIFICATION AND WAIVER Modifications and amendments of the Indenture may be entered into by the Company and the Trustee with the consent of the Holders of not less than a majority in aggregate principal amount of the Outstanding Notes; provided, however, that no such modification or amendment may, without the consent of the Holder of each Outstanding Note affected thereby: (i) change the Stated Maturity of the principal of, or any installment of interest on, any Note, or reduce the principal amount thereof or the rate of interest thereon or any premium payable upon the redemption thereof, or change the coin or currency in which any Note or any premium or the interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date), (ii) reduce the amount of, or change the coin or currency of, or impair the right to institute suit for the enforcement of, the Change of Control Purchase Price, (iii) reduce the percentage in principal amount of Outstanding Notes, the consent of whose Holders is necessary to amend or waive compliance with certain provisions of the Indenture or to waive certain defaults, (iv) modify any of the provisions relating to supplemental indentures requiring the consent of Holders or relating to the waiver of past defaults or relating to the waiver of certain covenants, except to increase the percentage of Outstanding Notes the consent of whose Holders is required for such actions or to provide that certain other provisions of the Indenture cannot be modified or waived without the consent of the Holder of each Note affected thereby or (v) modify any of the provisions of the Indenture relating to the subordination of the Notes in a manner adverse to any Holder. 40 46 The Holders of a majority in aggregate principal amount of the Outstanding Notes may waive compliance with certain restrictive covenants and provisions of the Indenture. FORM AND DENOMINATION Except as provided below, the Exchange Notes will be represented by a global note (the "Global Note") in definitive, fully registered form without interest coupons and will be deposited with, or on behalf of, The Depository Trust Company ("DTC"), or with the Trustee, as custodian for DTC, and registered in the name of a nominee of DTC. The Company will initially appoint the Trustee at its corporate trust office as paying agent and registrar for the Notes. In such capacities, the Trustee will be responsible for, among other things, (i) maintaining a record of the aggregate holdings of Notes, accepting Notes for exchange and registration of transfer; (ii) ensuring that payments of principal, premium, if any, and interest in respect of the Notes received by the Trustee from the Issuer are duly paid to DTC or its nominees and (iii) transmitting to the Issuer any notices from holders. The Company will cause to be kept at the office of the registrar a register in which, subject to such reasonable regulations as it may prescribe, the Company will provide for the registration of the Notes and registration of transfers of the Notes. The Company may vary or terminate the appointment of any paying agent or registrar, or appoint additional or other such agents or approve any change in the office through which any such agent acts; provided that there shall at all times be a paying agent and registrar in the Borough of Manhattan, The City of New York, New York. The Company will cause notice of any resignation, termination or appointment of the Trustee or any paying agent or registrar, and of any change in the office through which any such agent will act, to be provided to Holders of the Notes. No service charge will be made for any registration of, transfer or exchange of the Notes, but the Company may require payment of sums sufficient to cover any tax or other government charge payable in connection therewith. GLOBAL NOTE The following description of the operations and procedures of DTC, Euroclear and CEDEL are provided solely as a matter of convenience. These operations and procedures are solely within the control of the respective settlement systems and are subject to changes by them from time to time. The Company takes no responsibility for these operations and procedures and urges investors to contact the system or their participants directly to discuss these matters. Upon the issuance of a Global Note representing the Exchange Notes, DTC will credit, on its internal system, the respective principal amount of the individual beneficial interests represented by such Global Note to the accounts with DTC ("participants") or persons who hold interests through participants. Ownership of beneficial interests in the Global Note will be shown on, and the transfer of that ownership will be effected only through, records maintained by DTC or its nominee (with respect to interests of participants) and the records of participants (with respect to interests of persons other than participants). AS LONG AS DTC, OR ITS NOMINEE, IS THE REGISTERED HOLDER OF A GLOBAL NOTE, DTC OR SUCH NOMINEE, AS THE CASE MAY BE, WILL BE CONSIDERED THE SOLE OWNER AND HOLDER OF THE NOTES REPRESENTED BY SUCH GLOBAL NOTE FOR ALL PURPOSES UNDER THE INDENTURE AND THE NOTES. Unless DTC notifies the Company that it is unwilling or unable to continue as a depositary for a Global Note, or ceases to be a "Clearing Agency" registered under the Exchange Act, or announces an intention permanently to cease business or does in fact do so, or an Event of Default has occurred and is continuing with respect to a Global Note, owners of beneficial interests in a Global Note will not be entitled to have any portions of such Global Note registered in their names, will not receive or be entitled to receive physical delivery of 41 47 Notes in definitive form and will not be considered the owners or Holders of the Global Note (or any Notes represented thereby) under the Indenture or the Notes. In addition, no beneficial owner of an interest in a Global Note will be able to transfer that interest except in accordance with DTC's applicable procedures (in addition to those under the Indenture referred to herein and, if applicable, those of Euroclear and CEDEL). In the event that owners of beneficial interests in a Global Note become entitled to receive Notes in definitive form, such Notes will be issued only in registered form in denominations of U.S. $1,000 and integral multiples thereof. Investors may hold their interests in the Global Note through Euroclear or CEDEL, if they are participants in such systems, or indirectly through organizations which are participants in such systems. Investors may also hold such interests through organizations other than Euroclear and CEDEL that are participants in the DTC system. Euroclear and CEDEL will hold interests in the Global Note on behalf of their participants through customers' securities accounts in their respective names on the books of their respective depositaries, which, in turn, will hold such interests in the Global Note in customers' securities accounts in the depositaries' names on the books of DTC. Investors may hold their interests in the Global Note directly through DTC, if they are participants in such system, or indirectly through organizations (including Euroclear and CEDEL) which are participants in such system. All interests in a Global Note, including those held through Euroclear or CEDEL, may be subject to the procedures and requirements of DTC. Those interests held through Euroclear and CEDEL may also be subject to the procedures and requirements of such system. Payments of the principal of, premium, if any, and interest on the Global Note will be made to DTC or its nominee as the registered owner thereof. Neither the Company, the Trustee nor any of their respective agents will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in the Global Notes or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. Subject to the following considerations, beneficial interests in the Global Note will trade in DTC's Same-Day Funds Settlement System, and secondary market trading activity in such interests will therefore settle in immediately available funds. The Company expects that DTC or its nominee, upon receipt of any payment of principal or interest in respect of a Global Note representing any Notes held by it or its nominee, will immediately credit participants' accounts with payments in amounts proportionate to their respective beneficial interests in the principal amount of such Global Note for such Notes as shown on the records of DTC or its nominee. The Company also expects that payments by participants to owners of beneficial interests in such Global Notes held through such participants will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers registered in "street name." Such payments will be the responsibility of such participants. Transfers between participants in DTC will be effected in accordance with DTC's procedures, and will be settled in same-day funds. Transfers between participants in Euroclear and CEDEL will be effected in the ordinary way in accordance with their respective rules and operating procedures. Cross-market transfers between DTC participants, on the one hand, and Euroclear or CEDEL participants, on the other hand, will be effected in DTC in accordance with DTC's rules on behalf of Euroclear or CEDEL, as the case may be, by its respective depositary; however, such cross-market transactions will require delivery of instructions to Euroclear or CEDEL, as the case may be, by the counterparty in such system in accordance with the rules and procedures and within the established deadlines (Brussels time) of such system. Euroclear or CEDEL, as the case may be, will, if the transaction meets its settlement requirements, deliver instructions to its respective depositary to take action to effect final settlement on its behalf by delivering or receiving interests in the relevant Global Note in DTC, and making or receiving payment in accordance with normal procedures for same-day funds settlement applicable to DTC. Euroclear participants and CEDEL participants may not deliver instructions directly to the depositaries for Euroclear or CEDEL. 42 48 Because of time zone differences, the securities account of a Euroclear or CEDEL participant purchasing an interest in a Global Note from a DTC participant will be credited, and any such crediting will be reported to the relevant Euroclear or CEDEL participant, during the securities settlement processing day (which must be a business day for Euroclear and CEDEL) immediately following the DTC settlement date. Cash received on Euroclear or CEDEL as a result of sales of interests in a Global Note by or through a Euroclear or CEDEL participant to a DTC participant will be received with value on the DTC settlement date but will be available in the relevant Euroclear or CEDEL cash account only as of the business day for Euroclear or CEDEL following the DTC settlement date. DTC has advised the Company that it will take any action permitted to be taken by a holder of Notes (including the presentation of Notes for exchange as described below) only at the direction of one or more participants to whose account with DTC interests in the Global Notes are credited and only in respect of such portion of the aggregate principal amount of the Notes as to which such participant or participants has or have given such direction. However, if there is an Event of Default under the Notes, DTC reserves the right to exchange the Global Notes for legended Notes in certificated form, and to distribute such notes to its participants. DTC has advised the Company as follows: DTC is a limited purpose trust company organized under the laws of the State of New York, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the Uniform Commercial Code, as amended, and a "Clearing Agency" registered pursuant to the provisions of Section 17A of the Exchange Act. DTC was created to hold securities for its participants and facilitate the clearance and settlement of securities transactions between participants through electronic book-entry changes in accounts of its participants, thereby eliminating the need for physical transfer and delivery of certificates. Participants include securities brokers and dealers, banks, trust companies and clearing corporations and may include certain other organizations. Indirect access to the DTC system is available to other entities such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a participant, either directly or indirectly ("indirect participants"). Although DTC, Euroclear and CEDEL have agreed to the foregoing procedures in order to facilitate transfers of beneficial ownership interests in the Global Note among participants of DTC, Euroclear and CEDEL, they are under no obligation to perform or continue to perform such procedures, and such procedures may be discontinued at any time. None of the Company, the Trustee nor any of their respective agents will have any responsibility for the performance by DTC, Euroclear and CEDEL, their participants or indirect participants of their respective obligations under the rules and procedures governing their operations, including maintaining, supervising or reviewing the records relating to, or payments made on account of, beneficial owner interests in the Global Note. CERTIFICATED NOTES If DTC is at any time unwilling or unable to continue as a depositary for the reasons set forth above under "-- Global Note", or, in the case of a Global Note held for an account of Euroclear or CEDEL, Euroclear or CEDEL, as the case may be, is closed for business for 14 continuous days or announces an intention to cease or permanently ceases business, the Company will issue certificates for the Notes in definitive, fully registered, non-global form without interest coupons. In all cases, certificates for Notes delivered in exchange for any Global Note or beneficial interests therein will be registered in the names, and issued in any approved denominations, requested by DTC. Physical certificates representing the Notes will not otherwise be available. CONCERNING THE TRUSTEE IBJ Schroder Bank & Trust Company is the Trustee under the Indenture. 43 49 IBJ Schroder Bank & Trust Company is also the indenture trustee under the indenture respecting the Company's 10 5/8% Notes (formerly the Cobb Notes). GOVERNING LAW The Indenture and the Notes will be governed by and construed in accordance with the laws of the State of New York. REGISTRATION RIGHTS The Company has entered into the Registration Rights Agreement with the Goldman, Sachs & Co. and Lehman Brothers, Inc., as the Initial Purchasers of the Old Notes pursuant to which the Company has agreed, for the benefit of the holders of the Old Notes, at the Company's cost, to (i) use its best efforts to file the Exchange Offer Registration Statement, within 60 days after the date of the original issue of the Notes, with the Commission with respect to the exchange of the Old Notes for the Exchange Notes, which will have terms identical in all material respects to the Old Notes (except that the Exchange Notes will not contain terms with respect to transfer restrictions) and (ii) use its best efforts to cause the Exchange Offer Registration Statement to be declared effective under the Securities Act within 150 days after the date of original issuance of the Notes. Promptly after the Exchange Offer Registration Statement has been declared effective, the Company will offer the Exchange Notes in exchange for surrender of the Old Notes. The Company will keep the Exchange Offer open until the Expiration Date. For each Old Note validly tendered to the Company pursuant to the Exchange Offer and not withdrawn by the holder thereof, the holder of such Old Note will receive an Exchange Note having a principal amount equal to the principal amount of such surrendered Note. In the event that any changes in law or the applicable interpretations of the staff of the Commission do not permit the Issuer to effect the Exchange Offer, or if for any reason the Exchange Offer Registration Statement is not declared effective on or prior to February 22, 1998, or upon the request of an Initial Purchaser under certain circumstances, the Company will, in lieu of effecting the registration of the Exchange Notes pursuant to the Exchange Offer Registration Statement and at its cost, (i) as promptly as practicable, file with the Commission the Shelf Registration Statement covering resales of the Old Notes, (ii) use its best efforts to cause the Shelf Registration Statement to be declared effective under the Securities Act by March 24, 1998 (or promptly in the event of a request by an Initial Purchaser) and (iii) use its best efforts to keep effective the Shelf Registration Statement until September 24, 1999 (or until one year after the date of original issuance of the Notes if such Shelf Registration Statement is filed at the request of an Initial Purchaser). The Company will, in the event of the filing of a Shelf Registration Statement, provide to each holder of the Old Notes copies of the prospectus which is a part of the Shelf Registration Statement, notify each such holder when the Shelf Registration Statement for the Old Notes has become effective and take certain other actions as are required to permit unrestricted resales of the Old Notes. A holder of Old Notes that sells such Old Notes pursuant to the Shelf Registration Statement generally will be required to be named as a selling securityholder in the related prospectus and to deliver a prospectus to purchasers, will be subject to certain of the civil liability provisions under the Securities Act in connection with such sales and will be bound by the provisions of the Registration Rights Agreement which are applicable to such a holder (including certain indemnification obligations). In addition, each holder of the Old Notes will be required to deliver information to be used in connection with the Shelf Registration Statement within the time periods set forth in the Registration Rights Agreement in order to have their Notes included in the Shelf Registration Statement and to benefit from the provisions regarding liquidated damages set forth in the following paragraph. In the event that (a) the Exchange Offer Registration Statement is not filed with the Commission on or prior to November 23, 1997, (b) the Exchange Offer Registration Statement is not declared effective on or prior to February 22, 1998, (c) the Exchange Offer is not consummated 44 50 or a Shelf Registration Statement with respect to the Notes is not declared effective on or prior to March 24, 1998 or (d) any registration statement required by the Registration Rights Agreement is filed and declared effective but shall thereafter cease to be effective (except as specifically permitted herein) without being succeeded immediately by an additional registration statement filed and declared effective, then the interest rate borne by the Notes shall be increased by 0.50% per annum following November 23, 1997 in the case of clause (a) above, following February 22, 1998 in the case of clause (b) above, following March 24, 1998 in the case of clause (c) above and following the date on which the relevant registration statement ceases to be effective in the case of clause (d) above. The aggregate amount of such increase from the original interest rate pursuant to these provisions will in no event exceed 1.00% per annum. Upon (w) the filing of the Exchange Offer Registration Statement after November 23, 1997, (x) the effectiveness of the Exchange Offer Registration Statement after February 22, 1998, (y) the consummation of the Exchange Offer or the effectiveness of a Shelf Registration Statement, as the case may be, after March 24, 1998 or (z) the effectiveness of a succeeding registration statement after the date in clause (d) above, the interest rate borne by the Notes from the date of such filing, effectiveness or consummation, as the case may be, will be reduced to 8 1/2%. The summary herein of certain provisions of the Registration Rights Agreement does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all the provisions of the Registration Rights Agreement, a copy of which has been filed as an exhibit to the Registration Statement of which this Prospectus is a part. 45 51 CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE EXCHANGE OFFER The following discussion is based upon current provisions of the Internal Revenue Code of 1986, as amended (the "Code"), existing and proposed Treasury Department regulations (the "Regulations") and existing administrative interpretations and court decisions, and no ruling from the IRS has been or will be sought. Legislative, judicial or administrative changes or interpretations may be forthcoming that could alter or modify the statements and conditions set forth herein. Any such changes or interpretations may or may not be retroactive and could affect the tax consequences to Holders. Certain Holders of the Old Notes (including insurance companies, tax-exempt organizations, financial institutions, broker-dealers, foreign corporations and person who are not citizens or resident of the United States) may be subject to special rules not discussed below. Each Holder of an Old Note should consult his, her or its own tax advisor as to the particular tax consequences of exchanging such Holder's Old Notes for Exchange Notes, including the applicability and effect of any state, local or foreign tax laws. The issuance of the Exchange Notes to Holders of the Old Notes pursuant to the terms set forth in this Prospectus generally will not constitute an exchange for United States federal income tax purposes because such issuance does not represent a significant modification of the debt instruments. Consequently, no gain or loss would be recognized by Holders of the Old Notes upon receipt of the Exchange Notes, and ownership of the Exchange Notes will be considered a continuation of ownership of the Old Notes. For purposes of determining gain or loss upon the subsequent sale or exchange of the Exchange Notes, a Holder's basis in the Exchange Notes should be the same as the Holder's basis in the Old Notes exchanged therefor. A Holder's holding period for the Exchange Notes should include the Holder's holding period for the Old Notes exchanged therefor. The issue price, original issue discount inclusion and other tax characteristics of the Exchange Notes should be identical to the issue price, original issue discount inclusion and other tax characteristics of the Old Notes exchanged therefor. See also "Description of Certain Federal Income Tax Consequences of an Investment in the Exchange Notes." 46 52 DESCRIPTION OF CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF AN INVESTMENT IN THE EXCHANGE NOTES The following is a summary of the material United States federal income tax consequences of the acquisition, ownership and disposition of the Old Notes or the Exchange Notes (as defined below). The summary deals with United States Holders and non-U.S. Holders separately below. The discussion does not cover all aspects of federal taxation that may be relevant to, or the actual tax effect that any of the matters described herein will have on, the acquisition, ownership or disposition of the Old Notes or the Exchange Notes by particular investors, and does not address state, local, foreign or other tax laws. In particular, this summary does not discuss all of the tax considerations that may be relevant to certain types of investors subject to special treatment under the federal income tax laws (including but not limited to banks, insurance companies, investors liable for the alternative minimum tax, individual retirement accounts and other tax-deferred accounts, tax-exempt organizations, dealers in securities or currencies, investors that will hold the Old Notes or the Exchange Notes as part of straddles, hedging transactions or conversion transactions for federal tax purposes or investors whose functional currency is not United States Dollars). Furthermore, the discussion below is based on provisions of the Code, and regulations, rulings, and judicial decisions thereunder as of the date hereof, and such authorities may be repealed, revoked or modified so as to result in U.S. federal income tax consequences different from those discussed below. PERSONS CONSIDERING THE PURCHASE, OWNERSHIP, OR DISPOSITION OF EXCHANGE NOTES SHOULD CONSULT HIS, HER OR ITS OWN TAX ADVISORS CONCERNING THE U.S. FEDERAL INCOME TAX CONSEQUENCES IN LIGHT OF THEIR PARTICULAR SITUATIONS AS WELL AS ANY CONSEQUENCES ARISING UNDER THE LAWS OF ANY STATE, LOCAL OR INTERNATIONAL TAXING JURISDICTION OR UNDER ANY APPLICABLE TAX TREATY. UNITED STATES HOLDER As used herein, the term "United States Holder" (or "U.S. Holder") means a beneficial owner of the Old Notes or the Exchange Notes that is (i) a citizen or resident of the United States for United States federal income tax purposes, (ii) a corporation created or organized under the laws of the United States or any State thereof, (iii) a person or entity that is otherwise subject to United States federal income tax on a net income basis in respect of income derived from the Old Notes or the Exchange Notes, or (iv) a partnership to the extent the interest therein is owned by a person who is described in clause (i), (ii) or (iii) of this paragraph. This summary deals only with U.S. Holders that will hold the Old Notes or the Exchange Notes as capital assets. INTEREST Interest (including any additional interest paid because of failure to satisfy the requirements of the Registration Rights Agreement ("Additional Interest")) paid on an Old Note or an Exchange Note will be taxable to a United States Holder as ordinary income at the time it is received or accrued, depending on the holder's method of accounting for tax purposes. Although the Old Notes were issued at a price that is less than their stated principal amount, the discount was less than 0.25% of the stated redemption price at maturity multiplied by the number of whole years to maturity. Therefore, for federal income tax purposes the amount of original issue discount on the Old Notes that is attributable to the difference between their purchase price and their stated redemption price is considered to be de minimis and is treated as zero. PURCHASE, SALE, EXCHANGE, RETIREMENT AND REDEMPTION OF THE EXCHANGE NOTES In general (with certain exceptions described below), a United States Holder's tax basis in an Exchange Note will equal the price paid for the Old Notes for which such Exchange Note was exchanged pursuant to the Exchange Offer. A United States Holder generally will recognize gain or loss on the sale, exchange, retirement, redemption or other disposition of an Old Note or an 47 53 Exchange Note (or portion thereof) equal to the difference between the amount realized on such disposition and the United States Holder's tax basis in the Old Note or the Exchange Note (or portion thereof). Except to the extent attributable to accrued but unpaid interest, gain or loss recognized on such disposition of an Old Note or Exchange Note will be capital gain or loss. The tax rate applicable to any such capital gain will depend, among other things, upon the U.S. Holder's holding period for the Old Note or Exchange Note that is sold, exchanged or redeemed. Any such gain will generally be United States source gain. BOND PREMIUM If a United States Holder acquires an Exchange Note or has acquired an Old Note, in each case, for an amount more than its redemption price, the Holder may elect to amortize such bond premium on a yield to maturity basis. Once made, such an election applies to all bonds (other than bonds the interest on which is excludable from gross income) held by the United States Holder at the beginning of the first taxable year to which the election applies or thereafter acquired by the United States Holder, unless the IRS consents to a revocation of the election. The basis of an Exchange Note will be reduced by an amortizable bond premium taken as a deduction. Bond premium or an Exchange Note or Old Note held by a U.S. Holder that has not made such an election will decrease the gain or increase the loss otherwise recognized on disposition of the Note. MARKET DISCOUNT The purchase of an Exchange Note or the purchase of an Old Note other than at original issue may be affected by the market discount provisions of the Code. These rules generally provide that, subject to a statutorily defined de minimis exception, if a United States Holder purchases an Exchange Note (or purchased an Old Note) at a "market discount," as defined below, and thereafter recognizes gain upon a disposition of the Exchange Note (including dispositions by gift or redemption), the lesser of such gain (or appreciation, in the case of a gift) or the portion of the market discount that has accrued ("accrued market discount") while the Exchange Note (and its predecessor Old Note, if any) was held by such United States Holder will be treated as ordinary interest income at the time of disposition rather than a capital gain. For an Exchange Note or an Old Note, "market discount" is the excess of the stated redemption price at maturity over the tax basis immediately after its acquisition by a United States Holder. Market discount generally will accrue ratably during the period from the date of acquisition to the maturity date of the Exchange Note, unless the United States Holder elects to accrue such discount on the basis of the constant yield method. Such an election applies only to the Exchange Note with respect to which it is made and is irrevocable. In lieu of including the accrued market discount in income at the time of disposition, a United States Holder of an Exchange Note acquired at a market discount (or acquired in exchange for an Old Note acquired at a market discount) may elect to include the accrued market discount in income currently either ratably or using the constant yield method. Once made, such an election applies to all other obligations that the United States Holder purchases at a market discount during the taxable year for which the election is made and in all subsequent taxable years of the United States Holder, unless the IRS consents to a revocation of the election. If an election is made to include accrued market discount in income currently, the basis of an Exchange Note (or, where applicable, a predecessor Old Note) in the hands of the United States Holder will be increased by the accrued market discount thereon as it is includible in income. A United States Holder of a market discount Exchange Note who does not elect to include market discount in income currently generally will be required to defer deductions for interest on borrowings allocable to such Exchange Note, if any, in an amount not exceeding the accrued market discount on such Exchange Note until the maturity or disposition of such Exchange Note. 48 54 BACKUP WITHHOLDING AND INFORMATION REPORTING Payments of interest (including any Additional Interest) and principal on, and the proceeds of sale or other disposition of the Old Notes or the Exchange Notes payable to a United States Holder may be subject to information reporting requirements and backup withholding at a rate of 31% will apply to such payments if the United States Holder fails to provide an accurate taxpayer identification number or to report all interest and dividends required to be shown on its federal income tax returns. Certain United States Holders (including, among others, corporations) are not subject to backup withholding. United States Holders should consult their tax advisors as to their qualification for exemption from backup withholding and the procedure for obtaining such an exemption. Any amounts withheld under the backup withholding rules from a payment to a U.S. Holder will be allowed as a credit against such Holder's United States federal income tax and may entitle the Holder to a refund, provided that the required information is furnished to the IRS. CERTAIN U.S. FEDERAL TAX CONSEQUENCES TO NON-U.S. HOLDERS The following is a general discussion of certain U.S. federal tax consequences of the ownership and disposition of Notes by a non-U.S. holder who acquires and owns such Notes as a capital asset within the meaning of Section 1221 of the Code. A "non-U.S. holder" is any person other than a United States Holder. The rules governing the United States federal income and estate taxation of a non-U.S. Holder are complex and no attempt will be made herein to provide more than a summary of such rules. NON-U.S. HOLDERS SHOULD CONSULT WITH THEIR OWN TAX ADVISORS TO DETERMINE THE EFFECT OF FEDERAL, STATE, LOCAL AND FOREIGN TAX LAWS WITH REGARD TO AN INVESTMENT IN THE OLD NOTES OR THE EXCHANGE NOTES, INCLUDING ANY REPORTING REQUIREMENTS. INTEREST In general, interest paid to a non-U.S. holder of Notes will not be subject to U.S. federal income tax or regular withholding tax so long as (a) the interest in not effectively connected with the conduct of a trade or business within the United States, (b) the non-U.S. holder does not actually or constructively own 10% or more of the total combined voting power of all classes of stock of the Company entitled to vote, (c) the non-U.S. holder is not a controlled foreign corporation that is related to the Company actually or constructively through stock ownership and (d) either (i) the beneficial owner of the Note certifies to the Company or its agent, under penalties of perjury, that it is a non-U.S. holder and provides its name and address on U.S. Treasury Form W-8 (or a suitable substitute form) or (ii) a securities clearing organization, bank or other financial institution that holds customers' securities in the ordinary course of its trade or business (a "financial institution") holds the Note and certifies under penalties of perjury that such a Form W-8 (or suitable substitute form) has been received from the beneficial owner by it or by a financial institution between it and the beneficial owner and furnishes the payor with a copy thereof. Recently, finalized Treasury regulations provide alternative methods for satisfying the certification requirement described in clause (d) above. These Regulations generally are effective for payments made after December 31, 1998, subject to certain transition rules. Non-U.S. Holders are urged to consult their own tax advisors regarding the new Treasury Regulations. DISPOSITION OF NOTES Non-U.S. holders generally will not be subject to U.S. federal income taxation on gain recognized on a disposition of Notes so long as (i) the gain is not effectively connected with the conduct by the non-U.S. holder of a trade or business within the United States and (ii) in the case of a non-U.S. holder who is an individual, either such holder is not present in the United States for 183 days or more in the taxable year of disposition or such holder does not (a) have a "tax home" (within the meaning of section 911(d)(3) of the Code) in the United States or (b) maintain an office or fixed place of business in the United States to which the gain is attributable. 49 55 FEDERAL ESTATE TAXES A Note held by an individual who, at the time of death, is not a citizen or resident of the United States will not be includible in the individual's gross estate for purposes of the U.S. federal estate tax as a result of such individual's death if the individual does not actually or constructively own 10% or more of the total combined voting power of all classes of stock of the Company entitled to vote and if, at the time of the individual's death, payments with respect to such Note would not have been effectively connected with the conduct by such individual of a trade or business in the United States. U.S. INFORMATION REPORTING REQUIREMENTS AND BACKUP WITHHOLDING TAX Generally, payments of interest, premium or principal on the Notes to a non-U.S. holder will not be subject to information reporting or backup withholding (assuming the income is otherwise exempt from United States federal income tax) if the non-U.S. holder complies with the certification requirements set forth in clause (d) under "-- Interest" above. Non-U.S. holders will not be subject to information reporting or backup withholding with respect to the payment of proceeds from the disposition of Notes effected by, to or through the foreign office of a broker; provided, however, that if the broker is a U.S. person or a U.S.-related person, information reporting (but not backup withholding) would apply unless the broker has documentary evidence in its records as to the non-U.S. holder's foreign status (and has no actual knowledge to the contrary), or the non-U.S. holder certifies as to its non-U.S. status under penalty of perjury or otherwise establishes an exemption. Non-U.S. holders will be subject to information reporting and backup withholding at a rate of 31% with respect to the payment of proceeds from the disposition of Notes effected by, to or through the United States office or a broker, unless the non-U.S. holder certifies as to its non-U.S. status under penalty of perjury or otherwise establishes an exemption. Amounts withheld under the backup withholding rules do not constitute a separate U.S. federal income tax. Rather, amounts withheld under the backup withholding rules from a payment to a non-U.S. holder will be allowed as a credit against such non-U.S. holder's U.S. federal income tax liability and any amounts withheld in excess of such non-U.S. holder's U.S. federal income tax liability will be refunded, provided that the required information is furnished to the IRS. PLAN OF DISTRIBUTION Each broker-dealer that receives Exchange Notes for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Notes. This Prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of Exchange Notes received in exchange for Old Notes where such Old Notes were acquired as a result of market-making activities or other trading activities. The Company has agreed that it will make this Prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resale for a period of 90 days from the Expiration Date, or such shorter period as will terminate when all Old Notes acquired by broker-dealers for their own accounts as a result of market-making activities or other trading activities have been exchanged for Exchange Notes and resold by such broker-dealers. The Company will not receive any proceeds from any sale of Exchange Notes by broker-dealers. Exchange Notes received by broker-dealers for their own account pursuant to the Exchange Offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the Exchange Notes or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or at negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer and/or purchasers of any such Exchange Notes. Any broker-dealer that resells Exchange Notes that were received by it for its own 50 56 account pursuant to the Exchange Offer and any broker or dealer that participates in a distribution of such Exchange Notes may be deemed to be an "underwriter" within the meaning of the Securities Act and any profit on any such resale of Exchange Notes and any commissions or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The Letter of Transmittal states that by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. For a period of 90 days from the Expiration Date, or such shorter period as will terminate when all Old Notes acquired by broker-dealers for their own accounts as a result of market-making activities or other trading activities have been exchanged for Exchange Notes and resold by such broker-dealers, the Company will promptly send additional copies of this Prospectus and any amendment or supplement to this Prospectus to any broker-dealer that requests such documents in the Letter of Transmittal. LEGAL MATTERS The validity of the Exchange Notes will be passed upon for the Company by Bass, Berry & Sims PLC, Nashville, Tennessee. EXPERTS The supplemental consolidated financial statements of Regal at January 2, 1997, and December 28, 1995, and for each of the three years in the period ended January 2, 1997, incorporated by reference herein have been audited by Coopers & Lybrand L.L.P., independent accountants, as stated in their report thereon incorporated by reference herein and is incorporated by reference herein in reliance upon the authority of said firm as experts in accounting and auditing. The report of Coopers & Lybrand L.L.P., with respect to Regal's supplemental consolidated financial statements makes reference to the fact that separate financial statements of Cobb Theatres, L.L.C., including the Consolidated Balance Sheet as of December 31, 1996, and the Consolidated Statements of Income and Cash Flows for the year ended December 31, 1996, were audited by Ernst & Young LLP, independent auditors, as stated in their report dated July 2, 1997. The report of Coopers & Lybrand L.L.P., with respect to Regal's supplemental consolidated financial statements, also makes reference to the fact that separate financial statements of Cobb Theatres, L.L.C., including Consolidated Balance Sheets as of August 31, 1996 and August 31, 1995 and Consolidated Statements of Income, Members' Equity and Cash Flows for each of the two years in the period ended August 31, 1996, were audited by Ernst & Young LLP, independent auditors, as stated in their report dated October 23, 1996. The report of Coopers & Lybrand L.L.P. with respect to Regal's supplemental consolidated financial statements also makes reference to the fact that separate financial statements of Cobb Theatres, L.L.C. including consolidated statements of income, members' equity and cash flows for the year ended August 31, 1994, were audited by LaRocca & Co., P.C., independent auditors, as stated in their report dated November 15, 1994. The report of Coopers & Lybrand L.L.P. with respect to Regal's supplemental consolidated financial statements also makes reference to the fact that separate financial statements of Neighborhood Entertainment, Inc. included in the Consolidated Statements of Income, Shareholders' Equity and Cash Flows for the year ended December 29, 1994, were audited by Ernst & Young LLP, independent auditors, as stated in their report dated March 21, 1995. The financial statements of Cobb Theatres, L.L.C. are included in the supplemental consolidated financial statements of Regal in reliance upon the report of LaRocca & Co., P.C. given upon the reliance of such firm as experts in accounting and auditing. The financial statements of Neighborhood Entertainment, Inc. and Cobb Theatres L.L.C. referred to above, audited by Ernst & Young, LLP, are included in the supplemental consolidated financial statements of Regal in reliance upon such reports given upon the authority of such firm as experts in accounting and auditing. 51 57 ====================================================== NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO WHICH IT RELATES OR AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SUCH SECURITIES BY ANY PERSON IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE. --------------------- TABLE OF CONTENTS
PAGE ---- Available Information.................. iii Incorporation by Reference............. iii Prospectus Summary..................... 1 Summary of the Terms of the Exchange Offer................................ 2 Summary Description of Exchange Notes................................ 5 Summary Consolidated Financial and Operating Data....................... 7 Risk Factors........................... 8 The Company............................ 12 The Exchange Offer..................... 15 Use of Proceeds........................ 21 Capitalization......................... 22 Selected Consolidated Financial Data... 23 Description of Bank Revolving Credit Facility............................. 24 Description of Exchange Notes.......... 25 Certain Federal Income Tax Consequences of the Exchange Offer................ 46 Description of Certain Federal Income Tax Consequences of an Investment in the Exchange Notes................... 47 Certain U.S. Federal Tax Consequences to Non-U.S. Holders.................. 49 Plan of Distribution................... 50 Legal Matters.......................... 51 Experts................................ 51
====================================================== ====================================================== [REGAL CINEMAS LOGO] OFFER TO EXCHANGE $125,000,000 8 1/2% SENIOR SUBORDINATED NOTES DUE OCTOBER 1, 2007 FOR 8 1/2% EXCHANGE SENIOR SUBORDINATED NOTES DUE OCTOBER 1, 2007 --------------------- PRELIMINARY PROSPECTUS --------------------- , 1997 ====================================================== 58 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS The Tennessee Business Corporation Act ("TBCA") provides that a corporation may indemnify any of its directors and officers against liability incurred in connection with a proceeding if (i) the director or officer acted in good faith, (ii) in the case of conduct in his or her official capacity with the corporation, the director or officer reasonably believed such conduct was in the corporation's best interests, (iii) in all other cases, the director or officer reasonably believed that his or her conduct was not opposed to the best interest of the corporation, and (iv) in connection with any criminal proceeding, the director or officer had no reasonable cause to believe that his or her conduct was unlawful. In actions brought by or in the right of the corporation, however, the TBCA provides that no indemnification may be made if the director or officer was adjudged to be liable to the corporation. In cases where the director or officer is wholly successful, on the merits or otherwise, in the defense of any proceeding instigated because of his or her status as an officer or director of a corporation, the TBCA mandates that the corporation indemnify the director or officer against reasonable expenses incurred in the proceeding. The TBCA also provides that in connection with any proceeding charging improper personal benefit to an officer or director, no indemnification may be made if such officer or director is adjudged liable on the basis that personal benefit was improperly received. Notwithstanding the foregoing, the TBCA provides that a court of competent jurisdiction, upon application, may order that an officer or director be indemnified for reasonable expenses if, in consideration of all relevant circumstances, the court determines that such individual is fairly and reasonably entitled to indemnification, whether or not the standard of conduct set forth above was met. Article 8 of the Restated Charter, as amended (the "Charter") of the Company and its Amended and Restated Bylaws provide that the Company shall indemnify against liability, and advance expenses to, any present or former director or officer of the Company to the fullest extent allowed by the TBCA, as amended from time to time, or any subsequent law, rule or regulation adopted in lieu thereof. Additionally, the Charter provides that no director of the Company shall be personally liable to the Company or any of its shareholders for monetary damages for breach of any fiduciary duty except for liability arising from (i) any breach of a director's duty of loyalty to the Company or its shareholders, (ii) acts or omissions not in good faith or which involved intentional misconduct or a knowing violation of law, (iii) any unlawful distributions or (iv) receiving any improper personal benefit. The Company has entered into indemnification agreements with each of the Company's directors and executive officers. Directors' and officers' liability insurance has also been obtained by the Company, the effect of which is to indemnify the directors and officers of the Company against certain damages and expenses because of certain claims made against them caused by their negligent act, error or omission. ITEM 21. EXHIBITS. (a) Exhibits
EXHIBIT NUMBER DESCRIPTION ------- ----------- 3.1(1) -- Restated Charter of Registrant. 3.2(1) -- Restated Bylaws of Registrant. 4.1(1) -- Specimen Common Stock certificate. 4.2(1) -- Article 5 of the Registrant's Restated Charter (included in Exhibit 3.1). 4.3 -- Indenture dated September 24, 1997 between Regal Cinemas, Inc. and IBJ Schroder Bank & Trust Company.
II-1 59
EXHIBIT NUMBER DESCRIPTION ------- ----------- 4.4 -- Form of Regal Cinemas, Inc. 8 1/2% Senior Subordinated Note due October 1, 2007 (contained in Indenture filed as Exhibit 4.3). 4.5 -- Exchange and Registration Rights Agreement dated September 24, 1997 among Regal Cinemas, Inc., Goldman, Sachs & Co. and Lehman Brothers Inc. 4.6 -- Registration Rights Agreement dated July 31, 1997 among Regal Cinemas, Inc., Cobb Theatres, L.L.C., the Members of Cobb Theatres, L.L.C. and the partners of Tricob Partnership. 4.7(5) -- Indenture dated March 6, 1996 among Cobb Theatres, L.L.C., R.C. Cobb, Inc., Cobb Theatres II, Inc., Cobb Finance Corp. and IBJ Schroder Bank & Trust Company. 4.8(4) -- First Supplemental Indenture dated August 30, 1996 among Cobb Theatres, L.L.C., Cobb Finance Corp., R.C. Cobb, Inc., Cobb Theatres II, Inc. and IBJ Schroder Bank & Trust Company. 4.9(4) -- Second Supplemental Indenture dated July 30, 1997 among Cobb Theatres, L.L.C., Cobb Finance Corp., R.C. Cobb, Inc., Cobb Theatres II, Inc. and IBJ Schroder Bank & Trust Company. 4.10(4) -- Third Supplemental Indenture dated July 31, 1997 among Regal Cinemas, Inc., Cobb Theatres, L.L.C., Cobb Finance Corp., R.C. Cobb, Inc., Cobb Theatres II, Inc. and IBJ Schroder Bank & Trust Company. 4.11 -- Fourth Supplemental Indenture dated August 28, 1997 among Regal Cinemas, Inc., Cobb Finance Corp., R.C. Cobb, Inc., Cobb Theatres II, Inc. and IBJ Schroder Bank & Trust Company. 5.1 -- Opinion of Bass, Berry & Sims PLC. 10.1(1) -- Warrant Certificate dated April 26, 1990. 10.2(1) -- Form of Warrant Certificate executed January 11, 1991. 10.3(1) -- Amended and Restated Subordinated Agreement dated April 20, 1994. 10.4(1) -- Form of Indemnification Agreement. 10.5(1) -- Amended and Restated Warrant Certificate replacing Warrant Certificate dated April 26, 1990. 10.6(1) -- Form of Amended and Restated Warrant Certificate replacing Warrant Certificates dated January 11, 1991. 10.7(3) -- Agreement and Plan of Merger dated June 11, 1997 among Regal Cinemas, Inc., Regal Acquisition Corporation, RAC Corporation, RAC Finance Corp., Cobb Theatres, L.L.C., R.C. Cobb, Inc., Cobb Theatres II, Inc., Cobb Finance Corp. and Tricob Partnership. 10.8(4) -- Agreement and Waiver dated July 31, 1997, by and among Regal Cinemas, Inc., Regal Acquisition Corporation, RAC Corporation, RAC Finance Corp., Cobb Theatres, L.L.C., R.C. Cobb, Inc., Cobb Theatres II, Inc., Cobb Finance Corp. and Tricob Partnership. 10.9(7) -- Loan Agreement dated October 8, 1997. MANAGEMENT CONTRACT OR COMPENSATORY PLAN 10.10(1) -- 1993 Employee Stock Incentive Plan. 10.11(1) -- 1993 Outside Directors' Stock Option Plan. 10.12(1) -- Regal Cinemas, Inc. Participant Stock Option Plan. 10.13(1) -- Regal Cinemas, Inc. Employee Stock Option Plan. 10.14(1) -- Agreement of Employment and Covenant Not to Compete by and between Michael L. Campbell and Regal Cinemas, Inc. dated March 17, 1990. 10.15(1) -- Agreement of Employment and Covenant Not to Compete by and between R. Neal Melton and Regal Cinemas, Inc. dated March 17, 1990. 10.16(2) -- 401(k) Profit Sharing Plan.
II-2 60
EXHIBIT NUMBER DESCRIPTION ------- ----------- 11(6)(7) -- Statement re Computation of Per Share Earnings. 21 -- Subsidiaries of the Registrant. 23.1 -- Independent Auditors' Consent. 23.2 -- Independent Auditors' Consent. 23.3 -- Independent Auditors' Consent. 23.4 -- Independent Auditors' Consent. 23.5 -- Consent of Bass, Berry & Sims PLC (contained in opinion filed as Exhibit 5). 24 -- Power of Attorney (included on signature page). 25 -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of IBJ Schroder Bank & Trust Company. 99.1 -- Form of Letter of Transmittal. 99.2 -- Form of Notice of Guaranteed Delivery. 99.3 -- Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.
- --------------- (1) Incorporated by reference to the Registrant's Registration Statement on Form S-1, Registration No. 33-62868. (2) Incorporated by reference to the Registrant's Registration Statement on Form S-8, Registration No. 333-13295. (3) Incorporated by reference to Cobb Theatres, L.L.C.'s Quarterly Report on Form 10-Q for the quarterly period ended May 31, 1997. (4) Incorporated by reference to the Registrant's Current Report on Form 8-K, dated August 14, 1997. (5) Incorporated by reference to Exhibit (4)-1 to Cobb Theatres, L.L.C.'s Registration Statement on Form S-4 as filed with the Commission on June 7, 1996 (Registration No. 333-02724). (6) Incorporated by reference to the Registrant's Current Report on Form 8-K/A, dated September 10, 1997. (7) Incorporated by reference to the Registrant's Quarterly Report on Form 10-Q for the quarterly period ended October 2, 1997. ITEM 22. UNDERTAKINGS The undersigned registrant hereby undertakes: (a)(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement; (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933. (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement. (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. II-3 61 (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) That, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c)(1) That prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this registration statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus will contain the information called for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form. (2) That every prospectus: (i) that is filed pursuant to paragraph (1) immediately proceeding, or (ii) that purports to meet the requirements of Section 10(a)(3) of the Act and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to the registration statement and will not be used until such amendment is effective, and that, for purposes of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (d) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expresses in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. (e) To respond to requests for information that is incorporated by reference into the prospectus pursuant to Item 4, 10(b), 11 or 13 of this form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request. (f) To supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective. II-4 62 SIGNATURES Pursuant to the requirements of the Securities Act, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Knoxville, State of Tennessee, on November 7, 1997. REGAL CINEMAS, INC. By: /s/ MICHAEL L. CAMPBELL ----------------------------------- Michael L. Campbell Chairman, President, Chief Executive Officer and Director Dated: November 7, 1997 KNOW ALL MEN BY THESE PRESENTS, each person whose signature appears below hereby constitutes and appoints Michael L. Campbell and Lewis Frazer III, and each of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place, and stead, in any and all capacities, to sign any and all amendments to this Registration Statement, and to file the same, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE --------- ----- ---- /s/ MICHAEL L. CAMPBELL Chairman of the Board, - --------------------------------------------------- President, Chief Executive Michael L. Campbell Officer and Director November 7, 1997 (Principal Executive Officer) /s/ LEWIS FRAZER III Executive Vice President, - --------------------------------------------------- Chief Financial Officer, Lewis Frazer III Secretary and Treasurer November 7, 1997 (Principal Financial and Accounting Officer) /s/ R. NEAL MELTON Vice President Equipment and - --------------------------------------------------- Purchasing and Director R. Neal Melton November 7, 1997 /s/ PHILIP D. BORACK Director - --------------------------------------------------- Philip D. Borack November 7, 1997
II-5 63
SIGNATURE TITLE DATE --------- ----- ---- /s/ MICHAEL E. GELLERT Director - --------------------------------------------------- Michael E. Gellert November 7, 1997 /s/ J. DAVID GRISSOM Director - --------------------------------------------------- J. David Grissom November 7, 1997 /s/ WILLIAM H. LOMICKA Director - --------------------------------------------------- William H. Lomicka November 7, 1997 /s/ HERBERT S. SANGER, JR. Director - --------------------------------------------------- Herbert S. Sanger, Jr. November 7, 1997 /s/ JACK TYRRELL Director - --------------------------------------------------- Jack Tyrrell November 7, 1997
II-6 64 INDEX TO EXHIBITS
EXHIBIT NUMBER EXHIBIT - ------- ------- 3.1(1) -- Restated Charter of Registrant. 3.2(1) -- Restated Bylaws of Registrant. 4.1(1) -- Specimen Common Stock certificate. 4.2(1) -- Article 5 of the Registrant's Restated Charter (included in Exhibit 3.1). 4.3 -- Indenture dated September 24, 1997 between Regal Cinemas, Inc. and IBJ Schroder Bank & Trust Company. 4.4 -- Form of Regal Cinemas, Inc. 8 1/2% Senior Subordinated Note due October 1, 2007 (contained in Indenture filed as Exhibit 4.3). 4.5 -- Exchange and Registration Rights Agreement dated September 24, 1997 among Regal Cinemas, Inc., Goldman, Sachs & Co. and Lehman Brothers Inc. 4.6 -- Registration Rights Agreement dated July 31, 1997 among Regal Cinemas, Inc., Cobb Theatres, L.L.C., the Members of Cobb Theatres, L.L.C. and the partners of Tricob Partnership. 4.7(5) -- Indenture dated March 6, 1996 among Cobb Theatres, L.L.C., R.C. Cobb, Inc., Cobb Theatres II, Inc., Cobb Finance Corp. and IBJ Schroder Bank & Trust Company. 4.8(4) -- First Supplemental Indenture dated August 30, 1996 among Cobb Theatres, L.L.C., Cobb Finance Corp., R.C. Cobb, Inc., Cobb Theatres II, Inc. and IBJ Schroder Bank & Trust Company. 4.9(4) -- Second Supplemental Indenture dated July 30, 1997 among Cobb Theatres, L.L.C., Cobb Finance Corp., R.C. Cobb, Inc., Cobb Theatres II, Inc. and IBJ Schroder Bank & Trust Company. 4.10(4) -- Third Supplemental Indenture dated July 31, 1997 among Regal Cinemas, Inc., Cobb Theatres, L.L.C., Cobb Finance Corp., R.C. Cobb, Inc., Cobb Theatres II, Inc. and IBJ Schroder Bank & Trust Company. 4.11 -- Fourth Supplemental Indenture dated August 28, 1997 among Regal Cinemas, Inc., Cobb Finance Corp., R.C. Cobb, Inc., Cobb Theatres II, Inc. and IBJ Schroder Bank & Trust Company. 5.1 -- Opinion of Bass, Berry & Sims PLC. 10.1(1) -- Warrant Certificate dated April 26, 1990. 10.2(1) -- Form of Warrant Certificate executed January 11, 1991. 10.3(1) -- Amended and Restated Subordinated Agreement dated April 20, 1994. 10.4(1) -- Form of Indemnification Agreement. 10.5(1) -- Amended and Restated Warrant Certificate replacing Warrant Certificate dated April 26, 1990. 10.6(1) -- Form of Amended and Restated Warrant Certificate replacing Warrant Certificates dated January 11, 1991. 10.7(3) -- Agreement and Plan of Merger dated June 11, 1997 among Regal Cinemas, Inc., Regal Acquisition Corporation, RAC Corporation, RAC Finance Corp., Cobb Theatres, L.L.C., R.C. Cobb, Inc., Cobb Theatres II, Inc., Cobb Finance Corp. and Tricob Partnership.
65
EXHIBIT NUMBER EXHIBIT - ------- ------- 10.8(4) -- Agreement and Waiver dated July 31, 1997, by and among Regal Cinemas, Inc., Regal Acquisition Corporation, RAC Corporation, RAC Finance Corp., Cobb Theatres, L.L.C., R.C. Cobb, Inc., Cobb Theatres II, Inc., Cobb Finance Corp. and Tricob Partnership. 10.9(7) -- Loan Agreement dated October 8, 1997 MANAGEMENT CONTRACT OR COMPENSATORY PLAN 10.10(1) -- 1993 Employee Stock Incentive Plan. 10.11(1) -- 1993 Outside Directors' Stock Option Plan. 10.12(1) -- Regal Cinemas, Inc. Participant Stock Option Plan. 10.13(1) -- Regal Cinemas, Inc. Employee Stock Option Plan. 10.14(1) -- Agreement of Employment and Covenant Not to Compete by and between Michael L. Campbell and Regal Cinemas, Inc. dated March 17, 1990. 10.15(1) -- Agreement of Employment and Covenant Not to Compete by and between R. Neal Melton and Regal Cinemas, Inc. dated March 17, 1990. 10.16(2) -- 401(k) Profit Sharing Plan. 11(6)(7) -- Statement re Computation of Per Share Earnings. 21 -- Subsidiaries of the Registrant. 23.1 -- Independent Auditors' Consent. 23.2 -- Independent Auditors' Consent. 23.3 -- Independent Auditors' Consent. 23.4 -- Independent Auditors' Consent. 23.5 -- Consent of Bass, Berry & Sims PLC (contained in opinion filed as Exhibit 5). 24 -- Power of Attorney (included on signature page). 25 -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of IBJ Schroder Bank & Trust Company. 99.1 -- Form of Letter of Transmittal. 99.2 -- Form of Notice of Guaranteed Delivery. 99.3 -- Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.
- --------------- (1) Incorporated by reference to the Registrant's Registration Statement on Form S-1, Registration No. 33-62868. (2) Incorporated by reference to the Registrant's Registration Statement on Form S-8, Registration No. 333-13295. (3) Incorporated by reference to Cobb Theatres, L.L.C.'s Quarterly Report on Form 10-Q for the quarterly period ended May 31, 1997. (4) Incorporated by reference to the Registrant's Current Report on Form 8-K, dated August 14, 1997. (5) Incorporated by reference to Exhibit (4)-1 to Cobb Theatres, L.L.C.'s Registration Statement on Form S-4 as filed with the Commission on June 7, 1996 (Registration No. 333-02724). (6) Incorporated by reference to the Registrant's Current Report on Form 8-K/A, dated September 10, 1997. (7) Incorporated by reference to the Registrant's Quarterly Report on Form 10-Q for the quarterly period ended October 2, 1997. EX-4.3 2 INDENTURE DATED 9/24/97 1 EXHIBIT 4.3 - -------------------------------------------------------------------------------- REGAL CINEMAS, INC. ISSUER, AND IBJ SCHRODER BANK & TRUST COMPANY, TRUSTEE ---------- INDENTURE Dated as of September 24, 1997 ---------- 8 1/2% Senior Subordinated Notes due 2007 - -------------------------------------------------------------------------------- 2 RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939 AND INDENTURE, DATED AS OF SEPTEMBER 24, 1997*
TRUST INDENTURE ACT SECTION INDENTURE SECTION ss.310 (a)(1) ........................................................................ 608 (b)............................................................................ 604, 607, 609 ss.311 (a)............................................................................ 604 (b)............................................................................ 604 (c)............................................................................ 604 ss.312 (a)............................................................................ 701 (b)............................................................................ 701 (c)............................................................................ 701 ss.314 (e)............................................................................ 101 ss.315 (a)............................................................................ 602, 903, 1209, 1210 (b)............................................................................ 105, 512, 602, 903 (c)............................................................................ 602, 903, 1209, 1210 (d)............................................................................ 602, 903, 1209, 1210 ss.316 (c)............................................................................ 105 ss.318 (a)............................................................................ 108
* This reconciliation and tie shall not, for any purpose, be deemed to be part of the Indenture. ii 3 TABLE OF CONTENTS
Page ---- ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION Section 101. Definitions............................................................................... 1 Section 102. Other Definitions.........................................................................16 Section 103. Compliance Certificates and Opinions......................................................17 Section 104. Form of Documents Delivered to Trustee....................................................17 Section 105. Acts of Holders...........................................................................18 Section 106. Notices, Etc., to Trustee and Company.....................................................19 Section 107. Notice to Holders; Waiver.................................................................19 Section 108. Conflict of Any Provision of Indenture with Trust Indenture Act...........................20 Section 109. Effect of Headings and Table of Contents..................................................20 Section 110. Successors and Assigns....................................................................20 Section 111. Separability Clause.......................................................................20 Section 112. Benefits of Indenture.....................................................................20 Section 113. Governing Law.............................................................................20 Section 114. Legal Holidays............................................................................21 Section 115. Agent for Service; Submission to Jurisdiction; Waiver of Immunities..................................................................21 Section 116. No Recourse Against Others................................................................22 Section 117. Reliance on Financial Data................................................................22 Section 118. Incorporation by Reference of Trust Indenture Act.........................................22 ARTICLE TWO SECURITY FORMS Section 201. Forms Generally...........................................................................23 Section 202. Restrictive Legends.......................................................................24 Section 203. Form of Face of Security..................................................................26 Section 204. Form of Reverse of Security...............................................................30 Section 205. Form of Trustee's Certificate of Authentication...........................................35 ARTICLE THREE THE SECURITIES Section 301. Title and Terms...........................................................................35
4 Section 302. Denominations.............................................................................36 Section 303. Execution, Authentication, Delivery and Dating............................................36 Section 304. Temporary Securities......................................................................37 Section 305. Registration, Registration of Transfer and Exchange.......................................38 Section 306. BookEntry Provisions for Global Securities................................................39 Section 307. Special Transfer Provisions...............................................................41 Section 308. Mutilated, Destroyed, Lost and Stolen Securities..........................................44 Section 309. Payment of Interest; Interest Rights Preserved............................................44 Section 310. Persons Deemed Owners.....................................................................46 Section 311. Cancellation..............................................................................46 Section 312. Computation of Interest...................................................................46 Section 313. CUSIP Numbers.............................................................................46 ARTICLE FOUR DEFEASANCE AND COVENANT DEFEASANCE Section 401. Company's Option to Effect Defeasance or Covenant Defeasance..............................47 Section 402. Defeasance and Discharge..................................................................47 Section 403. Covenant Defeasance.......................................................................47 Section 404. Conditions to Defeasance or Covenant Defeasance...........................................48 Section 405. Deposited Money and U.S. Government Obligations to Be Held in Trust; Other Miscellaneous Provisions...................................50 Section 406. Reinstatement.............................................................................50 ARTICLE FIVE REMEDIES Section 501. Events of Default.........................................................................51 Section 502. Acceleration of Maturity; Rescission and Annulment........................................53 Section 503. Collection of Indebtedness and Suits for Enforcement by Trustee...........................54 Section 504. Trustee May File Proofs of Claim..........................................................55 Section 505. Trustee May Enforce Claims Without Possession of Securities...............................56 Section 506. Application of Money Collected............................................................56 Section 507. Limitation on Suits.......................................................................56 Section 508. Unconditional Right of Holders to Receive Principal, Premium and Interest.......................................................57 Section 509. Restoration of Rights and Remedies........................................................57 Section 510. Rights and Remedies Cumulative............................................................58 Section 511. Delay or Omission Not Waiver..............................................................58 Section 512. Control by Holders........................................................................58 Section 513. Waiver of Past Defaults...................................................................58
iv 5 Section 514. Undertaking for Costs.....................................................................59 Section 515. Waiver of Stay, Extension or Usury Laws...................................................59 Section 516. Application of Trust Indenture Act to this Indenture......................................60 ARTICLE SIX THE TRUSTEE Section 601. Notice of Defaults........................................................................60 Section 602. Certain Rights of Trustee.................................................................60 Section 603. Not Responsible for Recitals or Issuance of Securities....................................62 Section 604. May Hold Securities.......................................................................62 Section 605. Money Held in Trust.......................................................................62 Section 606. Compensation and Reimbursement............................................................62 Section 607. Conflicting Interests.....................................................................63 Section 608. Corporate Trustee Required; Eligibility...................................................63 Section 609. Resignation and Removal; Appointment of Successor.........................................64 Section 610. Acceptance of Appointment by Successor....................................................65 Section 611. Merger, Conversion, Consolidation or Succession to Business...............................66 ARTICLE SEVEN HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY Section 701. Disclosure of Names and Addresses of Holders..............................................66 Section 702. Reports by Trustee........................................................................67 Section 703. Reports by Company........................................................................67 ARTICLE EIGHT CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE Section 801. Company May Consolidate, etc., Only on Certain Terms......................................68 Section 802. Successor Substituted.....................................................................68 ARTICLE NINE SUPPLEMENTS AND AMENDMENTS TO INDENTURE Section 901. Supplemental Indentures and Amendments Without Consent of Holders.........................................................69
v 6 Section 902. Supplemental Indentures and Certain Amendments with Consent of Holders............................................................................70 Section 903. Execution of Supplemental Indentures......................................................71 Section 904. Effect of Supplemental Indentures.........................................................71 Section 905. Conformity with Trust Indenture Act.......................................................71 Section 906. Reference in Securities to Supplemental Indentures........................................71 Section 907. Notice of Supplemental Indentures.........................................................72 ARTICLE TEN COVENANTS Section 1001. Payment of Principal, Premium and Interest...............................................72 Section 1002. Maintenance of Office or Agency..........................................................72 Section 1003. Money for Security Payments to Be Held in Trust..........................................73 Section 1004. Corporate Existence......................................................................74 Section 1005. Payment of Taxes and Other Claims........................................................74 Section 1006. Maintenance of Properties................................................................75 Section 1007. Limitation on ...........................................................................75 Section 1008. Limitation on Restricted Payments........................................................75 Section 1009. Limitation on Transactions with Affiliates...............................................77 Section 1010. Limitation on Senior Subordinated Indebtedness...........................................77 Section 1011. Change of Control........................................................................77 Section 1012. Provision of Financial Information.......................................................78 Section 1013. Statement as to Compliance...............................................................78 Section 1014. Waiver of Certain Covenants..............................................................79 Section 1015. Fallaway of Certain Covenants............................................................79 ARTICLE ELEVEN REDEMPTION OF SECURITIES Section 1101. Right of Redemption......................................................................79 Section 1102. Applicability of Article.................................................................80 Section 1103. Election to Redeem; Notice to Trustee....................................................80 Section 1104. Selection by Trustee of Securities to Be Redeemed........................................80 Section 1105. Notice of Redemption.....................................................................80 Section 1106. Deposit of Redemption Price..............................................................81 Section 1107. Securities Payable on Redemption Date....................................................82 Section 1108. Securities Purchased in Part.............................................................82
vi 7
ARTICLE TWELVE SUBORDINATION OF SECURITIES Section 1201. Securities Subordinate to Senior Indebtedness............................................82 Section 1202. Payment over of Proceeds upon Dissolution, Etc...........................................83 Section 1203. Suspension of Payment When Senior Indebtedness in Defau................................................................84 Section 1204. Payment Permitted If No Default..........................................................85 Section 1205. Subrogation to Rights of Holders of Senior Indebtedness..................................86 Section 1206. Provisions Solely to Define Relative Rights..............................................86 Section 1207. Trustee to Effectuate Subordination......................................................87 Section 1208. No Waiver of Subordination Provisions....................................................87 Section 1209. Notice to Trustee........................................................................88 Section 1210. Reliance on Bankruptcy Order or Certificate of Liquidating Agent Bank............................................................89 Section 1211. Rights of Trustee As a Holder of Senior Indebtedness; Preservation of Trustee's Rights.....................................................89 Section 1212. Article Applicable to Paying Agents......................................................89 Section 1213. No Suspension of Remedies................................................................89 Section 1214. Trust Moneys Not Subordinated............................................................90 Section 1215. Duties Owed by Trustee to Holders of Senior Indebtedness.................................90 EXHIBITS A-1 - Form of Certificate for Exchange or Registration of Transfer From Restricted Global Security to Regulation S Global Security A-2 - Form of Certificate for Exchange or Registration of Transfer From Regulation S Global Security to Restricted Global Security A-3 - Form of Certificate for Transfer of U.S. Physical Securities to Regulation S Global Security or Restricted Global Security A-4 - Form of Certificate for Transfer or Exchange after Three Years
viii 8 INDENTURE dated as of September 24, 1997 between Regal Cinemas, Inc., a Tennessee corporation, as issuer (the "Company"), and IBJ Schroder Bank & Trust Company, a New York banking corporation, as trustee (the "Trustee"). RECITALS OF THE COMPANY WHEREAS, the Company has duly authorized the creation of and issue of its 8 1/2% Senior Subordinated Notes due 2007 (the "Initial Securities"), and 8 1/2% Exchange Senior Subordinated Notes due 2007 (the "Exchange Securities" and, together with the Initial Securities, the "Securities") of substantially the tenor and amount hereinafter set forth, and to provide therefor the Company has duly authorized the execution and delivery of this Indenture; WHEREAS, upon the effectiveness of the Exchange Offer Registration Statement (as defined herein) or the Shelf Registration Statement (as defined herein), as the case may be, this Indenture will be subject to, and shall be governed by, the provisions of the Trust Indenture Act that are required or deemed to be part of and to govern indentures qualified under the Trust Indenture Act; and WHEREAS, all things necessary have been done to make the Securities, when executed by the Company and authenticated and delivered hereunder and duly issued by the Company, the valid obligations of the Company and to make this Indenture a valid agreement of the Company, each in accordance with its respective terms. NOW, THEREFORE, THIS INDENTURE WITNESSETH: For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the Securities, as follows: ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION SECTION 101. DEFINITIONS. For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires: (a) the terms defined in this Article have the meanings assigned to them in this Article, and include the plural as well as the singular; (b) all other terms used herein which are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein; 9 (c) the words "herein", "hereof" and "hereunder" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision; (e) the words "include", "included" and "including" as used herein shall be deemed in each case to be followed by the phrase "without limitation"; and (f) the words "amendment or refinancing" as used herein shall be deemed in each case to refer to any amendment, renewal, extension, substitution, refinancing, restructuring, restatement, replacement, supplement or other modification of any instrument or agreement; the words "amended or refinanced" shall have a correlative meaning. Certain terms, used principally in Articles Five, Ten and Twelve, are defined in those Articles. "Acquired Indebtedness" of any particular Person means Indebtedness of any other Person existing at the time such other Person merged with or into or became a Subsidiary of such particular Person or assumed by such particular Person in connection with the acquisition of assets from any other Person, and not incurred by such other Person in connection with, or in contemplation of, such other Person merging with or into such particular Person or becoming a Subsidiary of such particular Person or such acquisition. "Affiliate" means, with respect to any specified Person, (i) any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person or (ii) any other Person that owns, directly or indirectly, ten percent or more of such Person's outstanding Capital Stock or any officer or director of any such Person or other Person or with respect to any natural Person, any person having a relationship with such Person by blood, marriage or adoption not more remote than first cousin. For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Asset Disposition" by any Person means any transfer, conveyance, sale, lease or other disposition by such Person or any of its Subsidiaries (including any issuance or sale by a Subsidiary of Capital Stock of such Subsidiary, and including a consolidation or merger or other sale of any such Subsidiary with, into or to another Person in a transaction in which such Subsidiary ceases to be a Subsidiary, but excluding a disposition by a Subsidiary of such Person to such Person or a Wholly Owned Subsidiary of such Person or by such Person to a Wholly Owned Subsidiary of such Person) of (i) any shares of Capital Stock (other than directors' qualifying shares) or other ownership interests of a Subsidiary of such Person, (ii) substantially all of the assets of such Person or any of its Subsidiaries representing a division or line of business -2- 10 or (iii) other assets or rights of such Person or any of its Subsidiaries outside of the ordinary course of business. Notwithstanding the foregoing, the term "Asset Disposition" shall not include a disposition by a Subsidiary of the Company to the Company or a Wholly Owned Subsidiary or by the Company or a Subsidiary to a Wholly Owned Subsidiary. "Agent Member" means any member of, or participant in, the Depositary. "Applicable Procedures" means applicable procedures of the Depositary, Euroclear System or Cedel Bank S.A., as the case may be. "Bankruptcy Laws" means the bankruptcy laws of the United States and the law of any other jurisdiction relating to bankruptcy, insolvency, winding up, liquidation, reorganization or relief of debtors. "Board of Directors" means the Board of Directors of the Company or any committee of such Board of Directors duly authorized to act under the Indenture. "Board Resolution" means a copy of a resolution, certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee. "Business Day" means any day other than a Saturday or Sunday or other day on which banks or trust companies in New York, New York, Knoxville, Tennessee or the city in which the Corporate Trust Office is located are authorized or required by law, regulation or executive order to be closed or, if no Security is outstanding, the city in which the principal corporate trust office of the Trustee is located. "Capital Lease Obligation" of any Person means any obligations of such Person and its Subsidiaries on a consolidated basis under any capital lease of a real or personal property which, in accordance with GAAP, has been recorded as a capitalized lease obligation. "Capital Stock" of any Person means any and all shares, interests, participations or other equivalents (however designated) of such Person's capital stock, any rights (other than debt securities convertible into capital stock), warrants or options to acquire such capital stock, whether now outstanding or issued after the date of the Indenture. "Cash Equivalents" means (i) United States dollars, (ii) securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality, (iii) certificates of deposit and eurodollar time deposits with maturities of six months or less from the date of acquisition, bankers' acceptances with maturities not exceeding six months and overnight bank deposits, in each case with any United States domestic commercial bank having capital and surplus in excess of $500 million and a Keefe Bank Watch Rating of "B" or better, (iv) repurchase obligations with a term of not more than seven days for underlying securities of the types -3- 11 described in clauses (ii) and (iii) entered into with any financial institution meeting the qualifications specified in clause (iii) above, (v) commercial paper having one of the two highest rating categories obtainable from Moody's or S&P in each case maturing within six months after the date of acquisition and (vi) readily marketable direct obligations issued by any State of the United States of America or any political subdivision thereof having one of the two highest rating categories obtainable from Moody's or S&P. "Change of Control" shall mean the occurrence of, after the date of the Indenture, either of the following events: (a) any Person or any Persons acting together that would constitute a group (for purposes of Section 13(d) of the Exchange Act, or any successor provision thereto) (a "Group"), together with any Affiliates thereof, shall beneficially own (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision thereto), directly or indirectly, at least 50% of the aggregate voting power of all classes of Voting Stock of the Company (for the purposes of this clause (a) a Person shall be deemed to beneficially own the Voting Stock of a corporation that is beneficially owned (as defined above) by another corporation (a "parent corporation") if such person beneficially owns (as defined above) at least 50% of the aggregate voting power of all classes of Voting Stock of such parent corporation) or (b) any Person or Group, together with any Affiliates thereof, shall succeed in having a sufficient number of its nominees elected to the Board of Directors of the Company such that such nominees when added to any existing director remaining on the Board of Directors of the Company after such election who is an Affiliate of such Group, will constitute a majority of the Board of Directors of the Company. "Closing Date" means the date on which the Securities are originally issued under the Indenture. "Commission" means the Securities and Exchange Commission, as from time to time constituted, created under the Securities Exchange Act of 1934, or if at any time after the execution of this Indenture such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time. "Company" means the Person named as the "Company" in the first paragraph of this Indenture, until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Company" shall mean such successor Person. To the extent necessary to comply with the requirements of the provisions of Trust Indenture Act Sections 310 through 317 as they are applicable to the Company, the term "Company" shall include any other obligor with respect to the Securities for the purposes of complying with such provisions. "Company Request" or "Company Order" means a written request or order signed in the name of the Company by any two of the following officers: its Chairman of the Board, any Vice Chairman, its President, any Executive Vice President, any Senior Vice President, any Vice President, its Treasurer or its Secretary, and delivered to the Trustee. -4- 12 "Consolidated EBITDA" of any Person means for any period, on a consolidated basis in accordance with GAAP for such Person and its consolidated Subsidiaries, without duplication, the sum of the amounts for such period of (i) Consolidated Net Income, (ii) Consolidated Interest Expense, (iii) Consolidated Income Tax Expense (other than income taxes attributable to extraordinary, unusual or non-recurring gains or losses), (iv) depreciation and amortization expense, (v) other non-cash charges, (vi) other non-operating expenses that have been deducted in the determination of Consolidated Net Income and (vii) non-recurring expenses and charges incurred by such Person in connection with or as a result of the acquisition of another Person in a business combination accounted for as a pooling of interests in accordance with Accounting Principles Board Opinions No. 16 (or any successor thereto); provided, however, that for each such consolidated Subsidiary the items (i) through (vii) shall be included in such sum only to the extent and in the same proportion that the Consolidated Net Income of such consolidated Subsidiary was included in calculating the Consolidated Net Income of such Person. "Consolidated EBITDA Ratio" of any Person means for any period the ratio of (i) Consolidated EBITDA of such Person for such period to (ii) the sum of (A) Consolidated Interest Expense of such Person for such period, plus (B) the annual interest expense with respect to any Indebtedness Incurred or proposed to be incurred by such person or its consolidated Subsidiaries since the beginning of such period to the extent not included within clause (ii) (A), minus (C) Consolidated Interest Expense of such Person with respect to any Indebtedness that is no longer outstanding or that will no longer be outstanding as a result of the transaction with respect to which the Consolidated EBITDA Ratio is being calculated, to the extent included within clause (ii) (A); provided, however, that in making such computation, the Consolidated Interest Expense of such Person attributable to interest on any Indebtedness bearing a floating interest rate shall be computed on a pro forma basis as if the rate in effect on the date of computation had been the applicable rate for the entire period; and provided, further, that, in the event such Person or any of its consolidated Subsidiaries has made Asset Dispositions or acquisitions of assets not in the ordinary course of business (including by merger, consolidation or purchase of Capital Stock) during or after such period, the computation of the Consolidated EBITDA Ratio (and for the purpose of such computation, the calculation of Consolidated Net Income, Consolidated Interest Expense and Consolidated EBITDA) shall be made on a pro forma basis as if the Asset Dispositions or acquisitions had taken place on the first day of such period. "Consolidated Income Tax Expense" of any Person means for any period the consolidated provision for income taxes of such Person and its consolidated Subsidiaries for such period determined in accordance with generally accepted accounting principles. "Consolidated Interest Expense" of any Person shall mean, on a consolidated basis for such Person and its consolidated Subsidiaries, without duplication, for any period, as applied to any Person, (i) the sum of (a) the aggregate of the interest expense on Indebtedness of such Person and its consolidated Subsidiaries for such period, on a consolidated basis, including, without limitation, (1) amortization of debt discount, (2) the net cost under Interest Rate Protection Agreements (including amortization of discounts), (3) the interest portion of any deferred payment -5- 13 obligation and (4) accrued interest, plus (b) the interest component of the Capital Lease Obligations paid, accrued and/or scheduled to be paid or accrued by such Person and its consolidated Subsidiaries during such period minus (ii) the cash interest income (exclusive of deferred financing fees) of such Person and its consolidated Subsidiaries during such period, in each case as determined in accordance with GAAP consistently applied. "Consolidated Net Income" of any Person means for any period the consolidated net income (or loss) of such Person and its consolidated Subsidiaries for such period determined in accordance with GAAP; provided that there shall be excluded therefrom, (a) the net income (or loss) of any Person that is not a consolidated Subsidiary of such Person except to the extent of the amount of dividends or other distributions actually paid to such Person by such other Person during such period, (b) extraordinary gains and losses (and any unusual gains and losses arising outside the ordinary course of business not included in extraordinary gains and losses), (c) net gains and losses in respect of Asset Dispositions and (d) the cumulative effect of changes in accounting principles and (e) the tax effect of any of the items described in clauses (a) through (d) above. "Corporate Trust Office" means the office of the Trustee at which at any particular time its corporate trust business shall be principally administered, which office at the date of execution of this Indenture is located at One State Street, New York, New York 10004, Attention: Corporate Trust Administration. "Currency Hedging Obligations" means the obligations of any Person pursuant to an arrangement designed to protect such Person against fluctuations in currency exchange rates. "Debt Rating" means the rating assigned to the Securities by Moody's or S&P, as the case may be. "Default" means any event which is, or after notice or the passage of time or both, would be an Event of Default. "Depositary" or "DTC" means The Depository Trust Company, its nominees and their respective successors. "Designated Senior Indebtedness" means (i) all Senior Indebtedness under any Working Capital Agreement and (ii) any other Senior Indebtedness (a) which at the time of determination exceeds $25 million in aggregate principal amount, (b) which is specifically designated in the instrument evidencing such Senior Indebtedness as "Designated Senior Indebtedness" by the Company and (c) as to which the Trustee has been given written notice of such designation. "Event of Default" has the meaning specified in Section 501. "Exchange Act" means the Securities Exchange Act of 1934, as amended. -6- 14 "Exchange Offer" means the offer by the Issuer to the Holders of the Initial Securities to exchange all of the Initial Securities for Exchange Securities, as provided for in the Registration Rights Agreement. "Exchange Offer Registration Statement" means the Exchange Offer Registration Statement as defined in the Registration Rights Agreement. "Exchange Securities" has the meaning stated in the first recital of this Indenture and refers to any Exchange Securities containing terms identical in all material respects to the Initial Securities (except that such Exchange Securities shall not contain terms with respect to transfer restrictions) that are issued and exchanged for the Initial Securities in accordance with the Exchange Offer, as provided for in the Registration Rights Agreement and this Indenture. "Fair Market Value" means, with respect to any asset or property, the sale value that would be obtained in an arm's length transaction between an informed and willing seller under no compulsion to sell and an informed and willing buyer under no compulsion to buy. "Generally Accepted Accounting Principles" or "GAAP" means generally accepted accounting principles in the United States, consistently applied. "Guarantee" means, with respect to any Person, any obligation, contingent or otherwise, of such Person directly or indirectly guaranteeing any Indebtedness or other obligation of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of such Person (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation of such other Person (whether arising by virtue of partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement conditions or otherwise) or (ii) entered into for purposes of assuring in any other manner the obligee of such Indebtedness or other obligation of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part); provided that the term "Guarantee" shall not include endorsements for collection or deposit in the ordinary course of business. The term "Guarantee" used as a verb has a corresponding meaning. "Guaranteed Indebtedness" of any Person means, without duplication, all Indebtedness of any other Person referred to in the definition of Indebtedness and all dividends of other Persons for the payment of which, in either case, such Person is directly or indirectly responsible or liable as obligor, guarantor or otherwise. "Holder" means the registered holder of any Security. "Incur" means, with respect to any Indebtedness or other obligation of any Person, to create, issue, incur (by conversion, exchange or otherwise), assume, Guarantee or otherwise become liable in respect of such Indebtedness or other obligation or the recording, as required -7- 15 pursuant to GAAP or otherwise, of any such Indebtedness or other obligation on the balance sheet of such Person (and "Incurrence," "Incurred," "Incurrable" and "Incurring" shall have meanings correlative to the foregoing); provided, however, that a change in GAAP that results in an obligation of such Person that exists at such time becoming Indebtedness shall not be deemed an Incurrence of such Indebtedness. "Indebtedness" means, with respect to any Person, without duplication, (i) all indebtedness of such Person for borrowed money or for the deferred purchase price of property or services, excluding any trade payables and other accrued current liabilities incurred in the ordinary course of business, but including, without limitation, all obligations of such Person in connection with any letters of credit and acceptances issued under letter of credit facilities, acceptance facilities or other similar facilities, now or hereafter outstanding, (ii) all obligations of such Person evidenced by bonds, notes, debentures or other similar instruments, (iii) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even if the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), but excluding trade accounts payable arising in the ordinary course of business, (iv) every obligation of such Person issued or contracted for as payment in consideration of the purchase by such Person or a Subsidiary of such Person of the Capital Stock or substantially all of the assets of another Person or in consideration for the merger or consolidation with respect to which such Person or a Subsidiary of such Person was a party, (v) all Indebtedness referred to in clauses (i) through (iv) above of other Persons and all dividends of other Persons, the payment of which is secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon or in property (including, without limitation, accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such Indebtedness, (vi) all Guaranteed Indebtedness of such Person, (vii) all obligations under Interest Rate Protection Agreements of such Person, (viii) all Currency Hedging Obligations of such Person and (ix) any amendment, supplement, modification, deferral, renewal, extension or refunding of any liability of the types referred to in clauses (i) through (viii) above. "Indenture" means this instrument as originally executed (including all exhibits and schedules hereto) and as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof. "Initial Securities" has the meaning stated in the first recital of this Indenture. "Interest Payment Date" means the Stated Maturity of an installment of interest on the Securities. "Interest Rate Protection Agreement" means any interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedge agreement, option or future -8- 16 contract or other similar agreement or arrangement designed to protect the Company or any of its Subsidiaries against fluctuations in interest rates. "Investment Grade Status" exists as of a date and thereafter if at such date either (i) the Debt Rating of Moody's is at least Baa3 (or the equivalent) or higher or (ii) the Debt Rating of S&P is at least BBB- (or the equivalent) or higher. "Lien" means any mortgage, lien (statutory or other), pledge, security interest, encumbrance, claim, hypothecation, assignment for security, deposit arrangement or preference or other security agreement of any kind or nature whatsoever. A Person shall be deemed to own subject to a Lien any property which it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement relating to Indebtedness of such Person. The right of a distributor to the return of its film held by a Person under a film licensing agreement is not a Lien as used herein. Reservation of title under an operating lease by the lessor and the interest of the lessee therein are not Liens as used herein. "Maturity" means, with respect to any Security, the date on which the principal of such Security becomes due and payable as provided in such Security or the Indenture, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise. "Moody's" means Moody's Investors Service, Inc. or any successor to the rating agency business thereof. "Non-Payment Default" means any event of default with respect to any Designated Senior Indebtedness (other than a Payment Default) pursuant to which the Maturity thereof may be accelerated. "Non-Recourse Indebtedness" means Indebtedness as to which (i) none of the Company or any of its Subsidiaries (a) provides credit support (including any undertaking, agreement or instrument which would constitute Indebtedness) or (b) is directly or indirectly liable and (ii) no default with respect to such Indebtedness (including any rights which the holders thereof may have to take enforcement action against the relevant Unrestricted Subsidiary or its assets) would permit (upon notice, lapse of time or both) any holder of any other Indebtedness of the Company or its Subsidiaries (other than Non-Recourse Indebtedness) to declare a default on such other Indebtedness or cause the payment thereof to be accelerated or payable prior to its stated maturity. "Obligations" means any principal (including reimbursement obligations and guarantees), premium, if any, interest (including interest accruing on or after the filing of, or which would have accrued but for the filing of, any petition in bankruptcy or for reorganization relating to the Company whether or not a claim for post-filing interest is allowed in such proceedings), penalties, fees, expenses, indemnifications, reimbursements, claims for rescission, damages, gross-up payments and other liabilities payable under the documentation governing any Indebtedness or otherwise. -9- 17 "Officers' Certificate" means a certificate signed by any two of the following officers of the Company: its Chairman, any Vice Chairman, its President, any Executive Vice President, any Senior Vice President, any Vice President, its Treasurer, its Chief Financial Officer or its Secretary and delivered to the Trustee. Each such certificate shall include the statements provided for in Trust Indenture Act Section 314(e) to the extent applicable. "Opinion of Counsel" means a written opinion of counsel to the Company or any other Person reasonably satisfactory to the Trustee. "Outstanding" when used with respect to Securities means, as of the date of determination, all Securities theretofore authenticated and delivered under this Indenture, except: (a) Securities theretofore cancelled by the Trustee or delivered to the Trustee for cancellation; (b) Securities, or portions thereof, for whose payment, redemption or purchase money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent (other than the Company) in trust or set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent) for the Holders of such Securities; provided that, if such Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made; (c) Securities, except to the extent provided in Sections 402 and 403, with respect to which the Company has effected defeasance or covenant defeasance as provided in Article Four; and (d) Securities in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture, other than any such Securities in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Securities are held by a bona fide purchaser in whose hands the Securities are valid obligations of the Company; provided, however, that in determining whether the Holders of the requisite principal amount of Outstanding Securities have given any request, demand, direction, consent or waiver hereunder, Securities owned by the Company or any other obligor upon the Securities or any Affiliate of the Company or such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, direction, consent or waiver, only Securities which the Trustee knows to be so owned shall be so disregarded. Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee's right so to act with respect to such Securities and that the pledgee is not the Company or any other obligor upon the Securities or any Affiliate of the Company or such other obligor. -10- 18 "Paying Agent" means any Person authorized by the Company to pay the principal of (or premium, if any) or interest on any Securities on behalf of the Company. "Payment Default" means any default in payment (whether at stated maturity, upon scheduled installment, by acceleration or otherwise) of principal of, premium, if any, or interest in respect of any Senior Indebtedness beyond any applicable grace periods. "Permitted Indebtedness" shall mean the following: (i) Indebtedness of the Company under any Working Capital Agreement in an aggregate principal amount at any one time outstanding not to exceed the sum of $300 million; (ii) Indebtedness of the Company under the Securities (including any Exchange Securities); (iii) Indebtedness of the Company (other than Indebtedness described under any clause of this definition) outstanding on the Closing Date after giving effect to the application of the proceeds of the Securities; (iv) Indebtedness of the Company or any of its Subsidiaries consisting of Permitted Interest Rate Protection Agreements; (v) Indebtedness owed by the Company to any Wholly Owned Subsidiary of the Company or Indebtedness owed by a Subsidiary of the Company to the Company or a Wholly Owned Subsidiary of the Company; (vi) Indebtedness which is exchanged for or the proceeds of which are used to refinance or refund, or any extension or renewal of, outstanding Indebtedness Incurred pursuant to clause (iii) of this paragraph (each of the foregoing, a "refinancing") in an aggregate principal amount not to exceed the principal amount of the Indebtedness so refinanced plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness so refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing by means of a tender offer or privately negotiated repurchase, plus the expenses of the Company or the Subsidiary, as the case may be, incurred in connection with such refinancing; (vii) Indebtedness of any Subsidiary Incurred in connection with the Guarantee of Indebtedness of the Company; -11- 19 (viii) Indebtedness relating to Currency Hedging Obligations entered into solely to protect the Company or any of its Subsidiaries from fluctuations in currency exchange rates and not to speculate on such fluctuations; (ix) Capital Lease Obligations of the Company or any of its Subsidiaries; (x) Indebtedness of the Company or any of its Subsidiaries in connection with one or more standby letters of credit or performance bonds issued in the ordinary course of business or pursuant to self-insurance obligations; (xi) Indebtedness represented by property, liability and workers' compensation insurance (which may be in the form of letters of credit); (xii) Acquired Indebtedness, provided that such Indebtedness, if Incurred by the Company, would be in compliance with "Limitation on Consolidated Indebtedness"; and (xiii) Indebtedness not otherwise permitted to be incurred pursuant to clauses (i) through (xii) above which, together with any other Indebtedness pursuant to this clause (xiii), has an aggregate principal amount that does not exceed $100 million at any time outstanding. "Permitted Interest Rate Protection Agreements" means, with respect to any Person, Interest Rate Protection Agreements entered into in the ordinary course of business by such Person that are designed to protect such Person against fluctuations in interest rates with respect to Permitted Indebtedness and that have a notional amount no greater than the payment due with respect to Permitted Indebtedness hedged thereby. "Person" means any individual, corporation, partnership, limited liability company, joint venture, association, joint stock company, trust, estate, unincorporated organization or government or any agency or political subdivision thereof. "Predecessor Security" of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and, for purposes of this definition, any Security authenticated and delivered under Section 308 in exchange for a mutilated security or in lieu of a lost, destroyed or stolen Security. "Redeemable Capital Stock" means any Capital Stock that, either by its terms, by the terms of any security into which it is convertible or exchangeable or otherwise, is or upon the happening of an event or passage of time would be required to be redeemed prior to the final Stated Maturity of the Securities or is redeemable at the option of the holder thereof at any time prior to such final Stated Maturity, or is convertible into or exchangeable for debt securities at any time prior to such final Stated Maturity at the option of the holder thereof. -12- 20 "Redemption Date", when used with respect to any Securities to be redeemed, means the date fixed for such redemption by or pursuant to this Indenture. "Redemption Price", when used with respect to any Security to be redeemed, means the price at which it is to be redeemed pursuant to this Indenture. "Registration Rights Agreement" means the Registration Rights Agreement between the Company and the Initial Purchasers named therein dated as of September 24, 1997 relating to the Securities. "Registration Statement" means the Registration Statement as defined in the Registration Rights Agreement. "Regular Record Date" for the interest payable on any Interest Payment Date means the March 15 or September 15 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. "Regulation S" means Regulation S under the Securities Act. "Responsible Officer", when used with respect to the Trustee, means the chairman or any vice-chairman of the board of directors, the chairman or vice-chairman of the executive committee of the board of directors, the president, any vice president, the secretary, any assistant secretary, the treasurer, any assistant treasurer, the cashier, any assistant cashier, any trust officer or assistant trust officer, the controller and any assistant controller or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject. "Restricted Payments" shall have the meaning set forth in the "Limitation on Restricted Payments" covenant. "Restricted Payments Computation Period" means the period (taken as one accounting period) from the Closing Date to the last day of the Company's fiscal quarter preceding the date of the applicable proposed Restricted Payment. "S&P" means Standard & Poor's Ratings Group, a division of McGraw Hill, Inc., or any successor to the rating agency business thereof. "Securities Act" means the Securities Act of 1933, as amended. "Security" and "Securities" have the meaning set forth in the first recital of this Indenture and more particularly means any Securities authenticated and delivered under this Indenture. For -13- 21 all purposes of this Indenture, the term "Securities" shall include any Exchange Securities to be issued and exchanged for any Initial Securities in accordance with the Exchange Offer as provided for in the Registration Rights Agreement and this Indenture and, for purposes of this Indenture, all Initial Securities and Exchange Securities shall vote together as one series of Securities under this Indenture. "Senior Indebtedness" means (i) all obligations of the Company, now or hereafter existing, under or in respect of any Working Capital Agreement, whether for principal, premium, if any, interest (including interest accruing after the filing of, or which would have accrued but for the filing of, a petition by or against the Company under the Bankruptcy Laws, whether or not such interest is allowed as a claim after such filing in any proceeding under such law), fees, expenses, indemnities, gross-ups or other payments thereunder and (ii) the principal of, premium, if any, and interest on all other Indebtedness of the Company (other than the Securities), whether outstanding on the date of the Indenture or thereafter Incurred, unless, in the case of any particular Indebtedness, the instrument creating or evidencing the same or pursuant to which the same is outstanding expressly provides that such Indebtedness shall not be senior in right of payment to the Securities. Notwithstanding the foregoing, "Senior Indebtedness" shall not include (i) Indebtedness evidenced by the Securities, (ii) Indebtedness of the Company that is expressly subordinated in right of payment to any Senior Indebtedness of the Company or the Securities, (iii) Indebtedness of the Company that by operation of law is subordinate to any general unsecured obligations of the Company, (iv) Indebtedness of the Company to the extent Incurred in violation of any covenant of the Indenture, (v) any liability for federal, state or local taxes or other taxes, owed or owing by the Company, (vi) trade account payables owed or owing by the Company, (vii) amounts owed by the Company for compensation to any employee, officer or director for services rendered to the Company, (viii) Indebtedness of the Company to any Subsidiary or any other Affiliate of the Company and (ix) Indebtedness which when Incurred and without respect to any election under Section 1111(b) of Title 11 of the United States Code is without recourse to the Company or any Subsidiary. "Shelf Registration Statement" means the Shelf Registration Statement as defined in the Registration Rights Agreement. "Special Record Date" means a date fixed by the Trustee for the payment of any Defaulted Interest pursuant to Section 309. "Stated Maturity," when used with respect to any Security or any installment of interest thereof, means the date specified in such Security as the fixed date on which the principal of such Security or such installment of interest is due and payable. "Subsidiary" of any person means (i) any corporation of which more than 50% of the outstanding shares of Capital Stock having ordinary voting power for the election of directors is owned directly or indirectly by such Person and (ii) any partnership, limited liability company, association, joint venture or other entity in which such Person, directly or indirectly, has more -14- 22 than a 50% equity interest, and, except as otherwise indicated herein, references to Subsidiaries shall refer to Subsidiaries of the Company. Notwithstanding the foregoing, for purposes hereof, an Unrestricted Subsidiary shall not be deemed a Subsidiary of the Company other than for purposes of the definition of "Unrestricted Subsidiary" unless the Company shall have designated in writing to the Trustee an Unrestricted Subsidiary as a Subsidiary. A designation of an Unrestricted Subsidiary as a Subsidiary may not thereafter be rescinded. "Surviving Entity" shall have the meaning set forth under "Merger and Sale of Assets." "Trustee" means the Person named as the "Trustee" in the first paragraph of this instrument, until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Trustee" shall mean such successor Trustee. "Trust Indenture Act" means the Trust Indenture Act of 1939, as amended, as in force at the date as of which this instrument was executed; provided, however, that in the event the Trust Indenture Act of 1939 is amended after such date, "Trust Indenture Act" means, to the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended. "U.S. Dollars", "United States Dollars", "US$" and the symbol "$" each mean currency of the United States of America. "Unrestricted Subsidiary" means a Subsidiary of the Company designated in writing to the Trustee (i) whose properties and assets, to the extent they secure Indebtedness, secure only Non-Recourse Indebtedness, (ii) that has no Indebtedness other than Non-Recourse Indebtedness and (iii) that has no Subsidiaries. "Voting Stock" means stock of the class or classes pursuant to which the holders thereof have the general voting power under ordinary circumstances to elect at least a majority of the board of directors, managers or trustees of a corporation (irrespective of whether or not at the time, stock of any other class or classes shall have or might have voting power by reason of the happening of any contingency). "Wholly Owned Subsidiary" of any Person means a Subsidiary of such Person, all of the Capital Stock (other than Directors' qualifying shares) or other ownership interests of which shall at the time be owned by such Person or by one or more Wholly Owned Subsidiaries of such Person or by such Person and one or more Wholly Owned Subsidiaries of such Person. "Working Capital Agreement" mean (i) the Second Amended and Restated Loan Agreement dated as of July 7, 1993, as amended, among the Company and the lender named therein and (ii) any other agreement or agreements between the Company and a financial institution or institutions providing for the making of loans or advances on a revolving basis, term loans, the issuance of letters of credit and/or the creation of the bankers' acceptances to fund the Company's general corporate requirements. -15- 23 SECTION 102. OTHER DEFINITIONS.
DEFINED TERM IN SECTION ---- ---------- "Act" ..........................................................................................105 "APB 16" ......................................................................................1008 "Bankruptcy Order"..............................................................................501 "CEDEL".........................................................................................201 "Change of Control Offer"......................................................................1011 "Change of Control Payment Date"...............................................................1011 "covenant defeasance" ..........................................................................403 "Custodian".....................................................................................501 "Defaulted Interest" ...........................................................................309 "defeasance" ...................................................................................402 "Euroclear".....................................................................................201 "Events of Default".............................................................................501 "Global Security"...............................................................................201 "incorporated provision" .......................................................................108 "indenture security holder".....................................................................118 "indenture to be qualified".....................................................................118 "indenture trustee".............................................................................118 "institutional trustee".........................................................................118 "Initial Blockage Period"......................................................................1203 "obligor".......................................................................................118 "Payment Blockage Period"......................................................................1203 "Permitted Junior Securities" .................................................................1202 "Physical Securities"...........................................................................201 "Private Placement Legend"......................................................................202 "Purchase Date" ................................................................................101 "rate(s) of exchange" ..........................................................................116 "Regulation S Global Security"..................................................................201 "Relevant Person" ..............................................................................119 "Restricted Global Security"....................................................................201 "Restricted Payments" .........................................................................1008 "Restricted Period" ............................................................................306 "Security Register" ............................................................................305 "Security Registrar" ...........................................................................305 "Subordinated Obligations" ....................................................................1201 "U.S. Government Obligations" ..................................................................404 "U.S. Physical Securities" .....................................................................201
-16- 24 SECTION 103. COMPLIANCE CERTIFICATES AND OPINIONS. Upon any application or request by the Company to the Trustee to take any action under any provision of this Indenture, the Company shall furnish to the Trustee an Officers' Certificate stating that all conditions precedent, if any, provided for in this Indenture (including any covenant compliance with which constitutes a condition precedent) relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with, except that, in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or request, no additional certificate or opinion need be furnished. Every certificate or opinion (other than the certificates required by Section 1013) with respect to compliance with a condition or covenant provided for in this Indenture shall include: (a) a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto; (b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (c) a statement that, in the opinion of each such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (d) a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with. SECTION 104. FORM OF DOCUMENTS DELIVERED TO TRUSTEE. In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents. Any certificate or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or Opinion of Counsel may be based, insofar as it relates to -17- 25 factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company stating that the information with respect to such factual matters is in the possession of the Company, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous. Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument. SECTION 105. ACTS OF HOLDERS. (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Company. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Trust Indenture Act Section 315) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section. (b) The fact and date of the execution by any Person of any such instrument or writing may be proved in any reasonable manner which the Trustee deems sufficient. (c) The ownership of Securities shall be proved by the Security Register. (d) If the Company shall solicit from the Holders any request, demand, authorization, direction, notice, consent, waiver or other Act, the Company may, at its option, by or pursuant to a Board Resolution, fix in advance a record date for the determination of such Holders entitled to give such request, demand, authorization, direction, notice, consent, waiver or other Act, but the Company shall have no obligation to do so. Notwithstanding Trust Indenture Act Section 316(c), any such record date shall be the record date specified in or pursuant to such Board Resolution, which shall be a date not more than 30 days prior to the first solicitation of Holders generally in connection therewith and no later than the date such solicitation is completed. If such a record date is fixed, such request, demand, authorization, direction, notice, consent, waiver or other Act may be given before or after such record date, but only the Holders of record at the close of business on such record date shall be deemed to be Holders for the purposes of determining whether Holders of the requisite proportion of Securities then Outstanding have authorized or agreed or consented to such request, demand, authorization, direction, notice, consent, waiver or other Act, and for this purpose the Securities then Outstanding shall be -18- 26 computed as of such record date; provided that no such request, demand, authorization, direction, notice, consent, waiver or other Act by the Holders on such record date shall be deemed effective unless it shall become effective pursuant to the provisions of this Indenture not later than eleven months after the record date. (e) Any request, demand, authorization, direction, notice, consent, waiver or other Act by the Holder of any Security shall bind every future Holder of the same Security or the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, in respect of anything done, suffered or omitted to be done by the Trustee, any Paying Agent or the Company in reliance thereon, whether or not notation of such action is made upon such Security. (f) For all purposes of this Indenture, all Initial Securities and Exchange Securities shall vote together as one series of Securities under this Indenture. SECTION 106. NOTICES, ETC., TO TRUSTEE AND COMPANY. Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with, (a) the Trustee by any Holder or the Company shall be sufficient for every purpose hereunder if made, given, furnished or delivered, in writing, to or with the Trustee at the Corporate Trust Office; or (b) the Company by the Trustee or any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if made, given, furnished or delivered in writing to the Company addressed to it at Regal Cinemas, Inc., Attention: Secretary, 7132 Commercial Park Drive, Knoxville, Tennessee 37918. SECTION 107. NOTICE TO HOLDERS; WAIVER. Where this Indenture provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder affected by such event, at his address as it appears in the Security Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Any notice mailed to a Holder in the aforesaid manner shall be conclusively deemed to have been received by such Holder when mailed whether or not actually received by such Holder. Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of -19- 27 notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. In case by reason of the suspension of regular mail service or by reason of any other cause, it shall be impracticable to mail notice of any event as required by any provision of this Indenture, then any method of giving such notice as shall be satisfactory to the Trustee shall be deemed to be a sufficient giving of such notice. SECTION 108. CONFLICT OF ANY PROVISION OF INDENTURE WITH TRUST INDENTURE ACT. If and to the extent that any provision of this Indenture limits, qualifies or conflicts with the duties imposed by Sections 310 to 318, inclusive, of the Trust Indenture Act, or conflicts with any provision (an "incorporated provision") required by or deemed to be included in this Indenture by operation of such Trust Indenture Act sections, such imposed duties or incorporated provision shall control. SECTION 109. EFFECT OF HEADINGS AND TABLE OF CONTENTS. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof. SECTION 110. SUCCESSORS AND ASSIGNS. All covenants and agreements in this Indenture by the Company shall bind its successors and assigns, whether so expressed or not. SECTION 111. SEPARABILITY CLAUSE. In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. SECTION 112. BENEFITS OF INDENTURE. Nothing in this Indenture or in the Securities, express or implied, shall give to any Person (other than the parties hereto and their successors hereunder, any Paying Agent, the Holders and the holders of Senior Indebtedness) any benefit or any legal or equitable right, remedy or claim under this Indenture. SECTION 113. GOVERNING LAW. This Indenture and the Securities shall be governed by and construed in accordance with the laws of the State of New York, without regard to principles of conflicts of laws. Upon the -20- 28 issuance of the Exchange Securities or the effectiveness of the Shelf Registration Statement, this Indenture shall be subject to the provisions of the Trust Indenture Act that are required to be part of this Indenture and shall, to the extent applicable, be governed by such provisions. SECTION 114. LEGAL HOLIDAYS. In any case where any Interest Payment Date, Redemption Date, date established for payment of Defaulted Interest pursuant to Section 309, Stated Maturity or Purchase Date with respect to any Security shall not be a Business Day, then (notwithstanding any other provision of this Indenture or of the Securities) payment of interest or principal (and premium, if any) need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on the Interest Payment Date, Redemption Date, date established for payment of Defaulted Interest pursuant to Section 309, Stated Maturity or Purchase Date and no interest shall accrue with respect to such payment for the period from and after such Interest Payment Date, Redemption Date, date established for payment of Defaulted Interest pursuant to Section 309, Stated Maturity or Purchase Date, as the case may be, to the next succeeding Business Day. SECTION 115. AGENT FOR SERVICE; SUBMISSION TO JURISDICTION; WAIVER OF IMMUNITIES. By the execution and delivery of this Indenture, the Company (i) acknowledges that it has, by separate written instrument, irrevocably designated and appointed CT Corporation System, 1633 Broadway, New York, New York 10019, as its authorized agent upon which process may be served in any suit or proceeding arising out of or relating to the Securities or this Indenture that may be instituted in any federal or state court in the State of New York, Borough of Manhattan, or brought under federal or state securities laws or brought by the Trustee (whether in its individual capacity or in its capacity as Trustee hereunder), and acknowledges that CT Corporation System has accepted such designation, (ii) submits to the jurisdiction of any such court in any such suit or proceeding, and (iii) agrees that service of process upon CT Corporation System and written notice of said service to it (mailed or delivered to its Secretary at its principal office in Knoxville, Tennessee as specified in Section 106(b) hereof, shall be deemed in every respect effective service of process upon it in any such suit or proceeding. The Company further agrees to take any and all action, including the execution and filing of any and all such documents and instruments, as may be necessary to continue such designation and appointment of CT Corporation System in full force and effect so long as this Indenture shall be in full force and effect. To the extent that the Company has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process (whether through service of notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its property, the Company hereby irrevocably waives such immunity in respect of its obligations under this Indenture and the Securities, to the extent permitted by law. SECTION 116. NO RECOURSE AGAINST OTHERS. -21- 29 A director, officer, employee or stockholder, as such, of the Company shall not have any liability for any obligations of the Company under the Securities or this Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. Each Holder by accepting any of the Securities waives and releases all such liability. The waiver and release shall be part of the consideration for the issue of the Securities. SECTION 117. RELIANCE ON FINANCIAL DATA. In computing any amounts under this Indenture, (i) to the extent relevant in computing any amounts under this Indenture, the Company shall use audited financial statements of the Company, its Subsidiaries, any Person that would become a Subsidiary in connection with the transaction that requires the computation and any Person from which the Company or a Subsidiary has acquired an operating business, or is acquiring an operating business in connection with the transaction that requires the computation (each such Person whose financial statements are relevant in computing any particular amount, a "Relevant Person") for the period or portions of the period to which the computation relates for which audited financial statements are available on the date of computation and unaudited financial statements and other current financial data based on the books and records of the Relevant Person or Relevant Persons, as the case may be, to the extent audited financial statements for the period or any portion of the period to which the computation relates are not available on the date of computation, and (ii) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of any Relevant Person that are available on the date of the computation. SECTION 118. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT. Whenever this Indenture refers to a provision of the Trust Indenture Act, the provision is incorporated by reference in and made a part of this Indenture. The following Trust Indenture Act terms used in this Indenture have the following meanings: "indenture securities" means the Securities. "indenture security holder" means a Holder. "indenture to be qualified" means this Indenture. "indenture trustee" or "institutional trustee" means the Trustee. "obligor" on the indenture securities means the Company and any other obligor on the indenture securities. -22- 30 All other Trust Indenture Act terms used in this Indenture that are defined by the Trust Indenture Act, defined by Trust Indenture Act reference to another statute or defined by the Commission rule have the meanings assigned to them by such definitions. ARTICLE TWO SECURITY FORMS SECTION 201. FORMS GENERALLY. The Initial Securities shall be known as the "8 1/2% Senior Subordinated Notes due 2007" and the Exchange Securities shall be known as the "8 1/2% Exchange Senior Subordinated Notes due 2007", in each case, of the Company. The Securities and the Trustee's certificate of authentication shall be in substantially the forms set forth in this Article, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or as may, consistently herewith, be determined by the officers executing such Securities, as evidenced by their execution of the Securities. Any portion of the text of any Security may be set forth on the reverse thereof, with an appropriate reference thereto on the face of the Security. The definitive Securities shall be printed, lithographed, typewritten or engraved or produced by any combination of these methods or may be produced in any other manner permitted by the rules of any securities exchange on which the Securities may be listed, all as determined by the officers executing such Securities, as evidenced by their execution of such Securities. The Initial Securities are being offered and sold by the Company pursuant to a Purchase Agreement, dated September 19, 1997, among the Company, Goldman, Sachs & Co., and Lehman Brothers Inc. Initial Securities offered and sold to "qualified institutional buyers" (as defined in Rule 144A) in reliance on Rule 144A shall be issued initially in the form of one or more permanent global Securities in definitive, fully registered form without interest coupons substantially in the form set forth in this Article (collectively, the "Restricted Global Security") deposited with, or on behalf of, the Depositary or with the Trustee, as custodian for the Depositary, duly executed by the Company and authenticated by the Trustee as hereinafter provided. The aggregate principal amount of the Restricted Global Security may from time to time be increased or decreased by adjustments made on the records of the Depositary or its nominee, or of the Trustee, as custodian for the Depositary or its nominee, as hereinafter provided. -23- 31 Initial Securities offered and sold in reliance on Regulation S shall be issued in the form of one or more permanent global Securities in fully registered form without interest coupons (collectively, the "Regulation S Global Security" and, together with the Restricted Global Security, the "Global Securities" or each individually, a "Global Security") substantially in the form set forth in this Article. The Regulation S Global Securities will be registered in the name of a nominee of DTC and deposited with the Trustee on behalf of the Purchasers, for the accounts of the Euroclear System ("Euroclear") and Cedel Bank, S.A. ("CEDEL"). The aggregate principal amount of the Regulation S Global Security may from time to time be increased or decreased by adjustments made on the records of the Depositary or its nominee, or of the Trustee, as custodian for the Depositary or its nominee, as hereinafter provided. Until and including the 40th day after the date of this Indenture, beneficial interests in the Regulation S Global Security may be held only through Euroclear or CEDEL, unless delivery is made through the Restricted Global Security in accordance with the certification requirements provided in this Indenture. If DTC is at any time unwilling or unable to continue as a depositary, or if, in the case of the Regulation S Global Security held for an account of Euroclear or CEDEL, Euroclear or CEDEL, as the case may be, is closed for business for 14 continuous days or announces an intention to cease or permanently ceases business, the Company will issue certificates for the Securities in definitive, fully registered, non-global form without interest coupons in exchange for the Regulation S Global Security or Restricted Global Security, as the case may be. In all cases, certificates for Securities delivered in exchange for any Global Security or beneficial interests therein will be registered in the names, and issued in any approved denominations, requested by DTC. In the case of certificates for Securities in non-global form issued in exchange for the Regulation S Global Security or Restricted Global Security, such certificates will bear the first legend appearing under Section 202 of this Indenture (unless the Company determines otherwise in accordance with applicable law). The holder of a Security in non-global form may transfer such Security, subject to compliance with the provisions of such legend, by surrendering it at the office or agency maintained by the Company for such purpose in the Borough of Manhattan, The City of New York, which initially will be the office of the Trustee. Initial Securities offered and sold other than as global securities shall be issued in the form of permanent certificated Securities in registered form in substantially the form set forth in this Article (the "U.S. Physical Securities"). SECTION 202. RESTRICTIVE LEGENDS. Unless and until (i) an Initial Security is sold under an effective Registration Statement or (ii) an Initial Security is exchanged for an Exchange Security in connection with an effective Registration Statement, in each case as provided for in the Registration Rights Agreement and each such Restricted Global Security and each U.S. Physical Security shall bear the following legend (the "Private Placement Legend") on the face thereof: -24- 32 THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "SECURITIES ACT") AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)(1) TO A PERSON WHOM THE TRANSFERROR REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT ACQUIRING FOR ITS OWN ACCOUNT OR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, (2) IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (4) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR (5) TO AN INSTITUTION THAT IS AN ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (IF APPLICABLE) AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES. Each Global Security, whether or not an Initial Security, shall also bear the following legend on the face thereof: UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN -25- 33 ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTIONS 306 AND 307 OF THE INDENTURE. SECTION 203. FORM OF FACE OF SECURITY. REGAL CINEMAS, INC. 8 1/2% [Exchange]* Senior Subordinated Note due 2007 NO._______ CUSIP ______ Regal Cinemas, Inc., a Tennessee corporation (herein called the "Company", which term includes any successor entity under the Indenture hereinafter referred to), for value received, hereby promises to pay to ________ or registered assigns, the principal sum of __________________________ DOLLARS [(or such other amount that may from time to time be indicated on the records of DTC or its nominee or on the records of the Trustee as custodian for DTC or its nominee as the result of increases or decreases by adjustments made on the records of DTC or its nominee or on the records of the Trustee, as the custodian for DTC, in accordance with the rules and procedures of DTC; provided; however that such amount may not exceed $125,000,000)]** on October 1, 2007, at the office or agency of the Company referred to below, and to pay interest thereon on April 1, 1998, and semiannually thereafter, on April 1 and October 1 in each year, from September 24, 1997, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, at the rate of 8 1/2% per annum [subject to adjustment as provided below],*** until the principal hereof is paid or duly provided for, and (to the extent lawful) to pay on demand interest on any overdue interest at the rate borne by the Securities from the date of the Interest Payment Date on which such overdue interest becomes payable to the date payment of such interest has been made or duly provided for. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be the March 15 or September 15 (whether or not a Business Day), as the case may - ---------- * Include only for Exchange Securities. ** Include only for Global Securities *** Include only for Initial Securities. -26- 34 be, next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for, and interest on such defaulted interest at the interest rate borne by the Securities, to the extent lawful, shall forthwith cease to be payable to the registered Holder on such Regular Record Date, and may be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities not less than 10 days prior to such Special Record Date, or may be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture. [The Holder of this Security is entitled to the benefits of the Registration Rights Agreement, dated as of September 24, 1997, between the Company and the Initial Purchasers named therein (the "Registration Rights Agreement"). In the event that (a) the Exchange Offer Registration Statement (as such term is defined in the Registration Rights Agreement) is not filed with the Securities and Exchange Commission on or prior to the 60th day following the date of original issuance of the Securities, (b) the Exchange Offer Registration Statement is not declared effective on or prior to the 150th day following the date of original issuance of the Securities, (c) the Exchange Offer (as defined in the Registration Rights Agreement) is not consummated or, if applicable, the Shelf Registration Statement (as defined in the Registration Rights Agreement) is not declared effective on or prior to the 180th day following the date of original issuance of the Securities or (d) any registration statement required by the Registration Rights Agreement is filed and declared effective but shall thereafter cease to be effective (except as specifically permitted herein) without being succeeded immediately by an additional registration statement filed and declared effective, then the interest rate borne by this Security shall be increased by 0.50% per annum following such 60-day period in the case of clause (a) above, following such 150-day period in the case of clause (b) above, following such 180-day period in the case of clause (c) above and following the date on which the relevant registration statement ceases to be effective in the case of clause (d) above. The aggregate amount of such increase from the original interest rate pursuant to these provisions shall in no event exceed 1.00% per annum. Upon (w) the filing of the Exchange Offer Registration Statement after the 60-day period described in clause (a) above, (x) the effectiveness of the Exchange Offer Registration Statement after the 150-day period described in clause (b) above, (y) the consummation of the Exchange Offer or, if applicable, the effectiveness of the Shelf Registration Statement (as defined in the Registration Rights Agreement), as the case may be, after the 180-day period described in clause (c) above or (z) the effectiveness of a succeeding registration statement after the date in clause (d) above, the interest rate borne by this Security from the date of such filing, effectiveness or consummation, as the case may be, will be reduced to the interest rate set forth above. The Company shall promptly provide the Trustee with notice of any change in the interest rate borne by this Security.]* - -------- * Include only for Initial Securities. -27- 35 Securities that remain outstanding after the consummation of the Exchange Offer and Exchange Securities issued in connection with the Exchange Offer will be treated as a single class of securities under this Indenture. Payment of the principal of (and premium, if any) and interest on this Security will be made at the office or agency of the Company maintained for that purpose in The City of New York (which shall be the Corporate Trust Office of the Trustee, unless the Company shall designate and maintain some other office or agency for such purpose), or at such other office or agency of the Company as may be maintained for such purpose, in lawful money of the United States of America; provided, however, that payment of interest may be made at the option of the Company by check mailed to the address of the Person entitled thereto as such address shall appear on the Security Register. Interest on this Security shall be computed on the basis of a year of twelve 30-day months. Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. Unless the certificate of authentication hereon has been duly executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Indenture, or be valid or obligatory for any purpose. IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal. Dated: REGAL CINEMAS, INC. By ________________________ Name: Title: Attest: By ________________________ Name: Title: ____________________ Authorized Signature -28- 36 SECTION 204. FORM OF REVERSE OF SECURITY. This Security is one of a duly authorized issue of securities of the Company designated as its 8 1/2% [Exchange]* Senior Subordinated Notes due 2007 (the "Securities"), limited (except as otherwise provided in the Indenture referred to below) in aggregate principal amount to $125,000,000, which may be issued under an indenture (the "Indenture") dated as of September 24, 1997 between the Company, as issuer, and IBJ Schroder Bank & Trust Company, as trustee (the "Trustee", which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties, obligations and immunities thereunder of the Company, the Trustee and the Holders of the Securities, and of the terms upon which the Securities are, and are to be, authenticated and delivered. The Securities are subordinated in right of payment, in the manner and to the extent set forth in the Indenture and in any other agreements entered into by the Trustee, as permitted or required by the Indenture, to acknowledge or effectuate such subordination, to the prior payment in full in cash or Cash Equivalents of all Senior Indebtedness of the Company, whether outstanding on the date of the Indenture or thereafter created, incurred, assumed or guaranteed. Each Holder by his acceptance hereof agrees to be bound by such provisions and authorizes and expressly directs the Trustee, on his behalf, to take such action as may be necessary or appropriate to acknowledge or effectuate the subordination provided for in the Indenture and appoints the Trustee his attorney-in-fact for such purpose. On or before each payment date, the Company shall deliver or cause to be delivered to the Trustee or the Paying Agent an amount in U.S. Dollars sufficient to pay the amount due on such payment date. The Securities are redeemable, at the option of the Company, as a whole or in part, upon not less than 30 nor more than 60 days' notice by first-class mail, at any time on or after October 1, 2002, at a Redemption Price equal to the percentage of the principal amount set forth below if redeemed during the 12-month period beginning October 1 of the years indicated together with accrued and unpaid interest, if any, to the Redemption Date:
YEAR REDEMPTION PRICE ---- ---------------- 2002............................................. 104.250% 2003............................................. 102.833 2004............................................. 101.417 2005 and thereafter.............................. 100%
- -------- * Include only for Exchange Securities. -29- 37 In the case of any redemption of Securities, interest installments whose Stated Maturity is on or prior to the Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, of record at the close of business on the relevant Record Date referred to on the face hereof. Securities (or portions thereof) for whose redemption and payment provision is made in accordance with the Indenture shall cease to bear interest from and after the Redemption Date. In the event of redemption of this Security in part only, a new Security or Securities for the unredeemed portion hereof shall be issued in the name of the Holder hereof upon the cancellation hereof. Upon the occurrence of a Change of Control, the Company will be required to make a Change of Control Offer, subject to certain limitations provided in the Indenture, at a Purchase Price in cash in an amount equal to 101% of the principal amount of this Security plus accrued and unpaid interest. If an Event of Default shall occur and be continuing, the principal amount of all the Securities may be declared due and payable in the manner and with the effect provided in the Indenture. The Indenture contains provisions for defeasance at any time of (a) the entire indebtedness of the Company on this Security and (b) certain restrictive covenants and the related Defaults and Events of Default, upon compliance by the Company with certain conditions set forth therein, which provisions apply to this Security. If money for the payment of the principal of (and premium, if any) or interest on this Security remains unclaimed for two years, the Trustee or Paying Agent shall pay the money back to the Company at its request unless an abandoned property law designates another person. After any such payment, Holders entitled to the money must look only to the Company and not to the Trustee for payment. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders under the Indenture at any time by the Company and the Trustee with the consent of the Holders of a majority in aggregate principal amount of the Securities at the time Outstanding. The Indenture also contains provisions permitting the Holders of specified percentages in aggregate principal amount of the Securities at the time Outstanding, on behalf of the Holders of all the Securities, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by or on behalf of the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer -30- 38 hereof or in exchange herefor or in lieu hereof whether or not notation of such consent or waiver is made upon this Security. No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of (and premium, if any) and interest on this Security at the times, place, and rate, and in the coin or currency, herein prescribed. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable on the Security Register of the Company, upon surrender of this Security for registration of transfer at the office or agency of the Company maintained for such purpose in The City of New York, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more replacement Securities, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. The Securities are issuable only in registered form without coupons in denominations of $1,000 and any integral multiple thereof. As provided in the Indenture and subject to certain limitations therein set forth, the Securities are exchangeable for a like aggregate principal amount of Securities of a different authorized denomination, as requested by the Holder surrendering the same. No service charge shall be made for any registration of transfer or exchange or redemption of Securities, but the Company may require payment of a sum sufficient to pay all documentary, stamp or similar issue or transfer taxes or other governmental charges payable in connection with any registration of transfer or exchange. Prior to the time of due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any agent shall be affected by notice to the contrary. Subject to certain limitations imposed by the Trust Indenture Act, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Securities and may otherwise deal with and collect obligations owed to it by the Company or its Affiliates and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not Trustee. A director, officer, employee or stockholder, as such, of the Company or the Trustee shall not have any liability for any obligations of the Company or the Trustee, respectively, under the Securities or the Indenture or for any claim based on, in respect of or by reason of such -31- 39 obligations or their creation. By accepting a Security, each Holder waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Securities. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Securities and has directed the Trustee to use CUSIP numbers in notices of redemption as a convenience to the Holders. No representation is made as to the accuracy of such numbers either as printed on the Securities or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon. This Security shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to principles of conflicts of laws. All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture. The Company will furnish to any Holder upon written request and without charge to the Holder a copy of the Indenture. Requests may be made to: Regal Cinemas, Inc. 7132 Commercial Park Drive Knoxville, Tennessee 37918 Attention: Secretary -32- 40 OPTION OF HOLDER TO ELECT PURCHASE If you wish to have this Security purchased by the Company pursuant to Section 1011 of the Indenture, check the Box: [ ]. If you wish to have a portion of this Security purchased by the Company pursuant to Section 1011 of the Indenture, state the amount (must be an integral multiple of $1,000) below: $ ---------------------. Date: Your Signature: (Sign exactly as your name appears on the other side of this Security) Signature Guarantee: 1 - ---------- 1 Signature must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Trustee, which requirements include membership or participation in the Securities Transfer Agents Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Trustee in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended. -33- 41 SECTION 205. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION. TRUSTEE'S CERTIFICATE OF AUTHENTICATION This is one of the Securities referred to in the within-mentioned Indenture. IBJ SCHRODER BANK & TRUST COMPANY, as Trustee Dated: By: _______________________ Authorized Officer ARTICLE THREE THE SECURITIES SECTION 301. TITLE AND TERMS. The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is limited to $125,000,000, except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities pursuant to Section 303, 304, 305, 308, 906, 1011 or 1108 or pursuant to an Exchange Offer. The Initial Securities shall be known and designated as the "8 1/2% Senior Subordinated Notes due 2007" and the Exchange Securities shall be known and designated as the "8 1/2% Exchange Senior Subordinated Notes due 2007". The Stated Maturity of the Securities shall be October 1, 2007, and, subject to any adjustment set forth therein, they shall bear interest at the rate of 8 1/2% per annum from September 24, 1997, or the most recent Interest Payment Date to which interest has been paid or duly provided for, payable on April 1, 1998, and semiannually thereafter on April 1 and October 1 in each year and at said Stated Maturity, until the principal thereof is paid or duly provided for. The principal of (and premium, if any) and interest on the Securities shall be payable at the office or agency of the Company maintained for such purpose in The City of New York, or at such other office or agency of the Company as may be maintained for such purpose; provided, however, that, at the option of the Company, interest may be paid by check mailed to addresses of the Persons entitled thereto as such addresses shall appear on the Security Register. -34- 42 The Securities shall not be redeemable, other than as provided in Article Eleven. SECTION 302. DENOMINATIONS. The Securities shall be issuable only in registered form without coupons and only in denominations of $1,000 or any integral multiple thereof. SECTION 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING. The Securities shall be executed on behalf of the Company by any two of the following: its Chairman, any Vice Chairman, its President, its Vice Presidents or its Treasurer, under its corporate seal reproduced thereon and attested by its Secretary or one of its Assistant Secretaries. The signature of any of these officers on the Securities may be manual or facsimile. Securities bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Securities or did not hold such offices at the date of such Securities. The Trustee shall (upon Company Order) authenticate and deliver Securities for original issue in an aggregate principal amount of up to $125,000,000. The Trustee may appoint an authenticating agent reasonably acceptable to the Company to authenticate the Securities. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. Each Security shall be dated the date of its authentication. No Security shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Security a certificate of authentication substantially in the form provided for herein duly executed by the Trustee by manual signature of an authorized officer, and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and delivered hereunder. The Company shall enter into an appropriate agency agreement with any Registrar, Paying Agent or co-registrar not a party to this Indenture, which shall incorporate the terms of the Trust Indenture Act. The agreement shall implement the provisions of this Indenture that relate to such agent. The Company shall notify the Trustee of the name and address of any such agent. If the Company fails to maintain a Registrar or Paying Agent, the Trustee shall be entitled to appropriate compensation therefor pursuant to Section 606. The Company or any of its Wholly Owned Subsidiaries incorporated in the United States may act as Paying Agent, Registrar, co-registrar or transfer agent. -35- 43 The Company initially appoints the Trustee as Registrar and Paying Agent in connection with Securities. In case the Company, pursuant to Article Eight, shall be amalgamated, consolidated or merged with or into any other Person or shall convey, transfer, lease or otherwise dispose of substantially all of its properties and assets to any Person, and the successor Person resulting from such amalgamation, consolidation, or surviving such merger, or into which the Company shall have been merged, or the successor Person which shall have received a conveyance, transfer, lease or other disposition as aforesaid, shall have executed an indenture supplemental hereto with the Trustee pursuant to Article Eight, any of the Securities authenticated or delivered prior to such amalgamation, consolidation, merger, conveyance, transfer, lease or other disposition may, from time to time, at the request of the successor Person, be exchanged for other Securities executed in the name of the successor Person with such changes in phraseology and form as may be appropriate, but otherwise in substance of like tenor as the Securities surrendered for such exchange and of like principal amount; and the Trustee, upon Company Order of the successor Person, shall authenticate and deliver replacement Securities as specified in such request for the purpose of such exchange. If replacement Securities shall at any time be authenticated and delivered in any new name of a successor Person pursuant to this Section in exchange or substitution for or upon registration of transfer of any Securities, such successor Person, at the option of any Holder but without expense to such Holder, shall provide for the exchange of all Securities at the time Outstanding held by such Holder for Securities authenticated and delivered in such new name. SECTION 304. TEMPORARY SECURITIES. Pending the preparation of definitive Securities, the Company may execute, and upon Company Order the Trustee shall authenticate and make available for delivery, temporary Securities which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Securities in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Securities may determine, as conclusively evidenced by their execution of such Securities. If temporary Securities are issued, the Company will cause definitive Securities to be prepared without unreasonable delay. After the preparation of definitive Securities, the temporary Securities shall be exchangeable for definitive Securities upon surrender of the temporary Securities at the office or agency of the Company designated for such purpose pursuant to Section 1002, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities, the Company shall execute and the Trustee shall authenticate and make available for delivery in exchange therefor a like principal amount of definitive Securities of authorized denominations. Until so exchanged, the temporary Securities shall in all respects be entitled to the same benefits under this Indenture as definitive Securities. -36- 44 SECTION 305. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE. The Company shall cause to be kept at one of its offices or agencies maintained pursuant to Section 1002 a register (the register maintained in such office and in any other office or agency designated pursuant to Section 1002 being herein sometimes referred to as the "Security Register") in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Securities and of transfers of Securities. Said office or agency is hereby initially appointed "Security Registrar" for the purpose of registering Securities and transfers of Securities as herein provided. Upon surrender for registration of transfer of any Security at the office or agency of the Company designated pursuant to Section 1002, the Company shall execute, and the Trustee shall authenticate and make available for delivery, in the name of the designated transferee or transferees, one or more replacement Securities of any authorized denomination or denominations of a like aggregate principal amount. At the option of the Holder, Securities may be exchanged for other Securities of any authorized denomination or denominations of a like aggregate principal amount upon surrender of the Securities to be exchanged at such office or agency. Whenever any Securities are so surrendered for exchange (including an exchange of Initial Securities for Exchange Securities), the Company shall execute, and the Trustee shall authenticate and make available for delivery, the replacement Securities which the Holder making the exchange is entitled to receive; provided that no exchange of Initial Securities for Exchange Securities shall occur until an Exchange Offer Registration Statement shall have been declared effective by the Commission and the Initial Securities to be exchanged for the Exchange Securities shall be cancelled by the Trustee. All Securities issued upon any registration of transfer or exchange of Securities shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Securities surrendered upon such registration of transfer or exchange. Every Security presented or surrendered for registration of transfer, or for exchange or redemption, shall (if so required by the Company or the Security Registrar) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar, duly executed by the Holder thereof or his attorney duly authorized in writing. No service charge shall be made for any registration of transfer or exchange or redemption of Securities, but the Company may require payment of a sum sufficient to pay all documentary, stamp or similar issue or transfer taxes or other governmental charges that may be imposed in connection with any registration of transfer or exchange of Securities, other than exchanges pursuant to Section 303, 304, 906, 1011 or 1108 not involving any transfer or pursuant to an Exchange Offer. -37- 45 The Company shall not be required to issue replacement Securities or register the transfer of or exchange any Security during a period beginning at the opening of business 15 days before the mailing of a notice of redemption of the Securities selected for redemption under Section 1105 and ending at the close of business on the day of such mailing or to transfer or exchange any Security so selected for redemption in whole or in part. Each Holder of a Security agrees to indemnify the Company and the Trustee against any liability that may result from the transfer, exchange or assignment of such Holder's Security in violation of any provision of this Indenture and/or applicable United States federal or state securities law. The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Security (including any transfers between or among Depositary Participants or beneficial owners of interests in any Global Security) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by the terms of, this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof. SECTION 306. BOOK-ENTRY PROVISIONS FOR GLOBAL SECURITIES. (a) The Global Securities initially shall (i) be registered in the name of the Depositary for such Global Security or the nominee of such Depositary, (ii) be deposited with, or on behalf of, the Depository or with the Trustee, as custodian for such Depositary and (iii) bear legends as set forth in Section 202. The Depository or its nominee shall be the Holder of the Global Securities, and owners of beneficial interests in the Securities represented by the Global Securities shall hold such interests pursuant to the procedures and practices of the Depositary. Any such owner's beneficial ownership of any such Securities will be shown only on, and the transfer of such ownership interest shall be effected only through, records maintained by the Depositary or its nominee. Investors in the Regulation S Global Security may hold their interests in Regulation S Global Security through Euroclear or CEDEL, if they are participants in such systems, or indirectly through organizations which are participants in such systems. After the expiration of the Restricted Period (but not earlier), investors in the Regulation S Global Security may also hold such interests through organizations other than Euroclear or CEDEL that are participants in the Depositary's system. Euroclear and CEDEL will hold interests in the Regulation S Global Security on behalf of their participants through customers' securities accounts in their respective names on the books of their respective depositaries, which, in turn, will hold such interests in the Regulation S Global Security in customer's securities accounts in the depositaries' names on the books of the Depositary. All interests in a Global Security, including those held through Euroclear or CEDEL, may be subject to the procedures and requirements of the Depositary. -38- 46 Those interests held through Euroclear and CEDEL will be subject to the procedures and requirements of such system. As used herein, the term "Restricted Period" means the period of 40 consecutive days beginning on and including the first day after the later of (i) the day that Goldman, Sachs & Co. advises the Company and the Trustee of the day on which the Securities are first offered to persons other than distributors (as defined in Regulation S) and (ii) the original issue date of the Securities. (b) Transfers of any Global Security shall be limited to transfers of such Global Security in whole, but not in part, to the Depositary, its successors or their respective nominees. Interests of beneficial owners in any Global Security may be transferred in accordance with the rules and procedures of the Depositary and the provisions of Section 307. Unless (i) the Depositary notifies the Company that it is unwilling or unable to continue as depositary for a Global Security or ceases to be a "Clearing Agency" registered under the Exchange Act or announces an intention permanently to cease business or does in fact do so and a successor Depositary is not appointed by the Company within 90 days of such notice, (ii) an Event of Default has occurred and is continuing with respect to a Global Security or (iii) in the case of a Global Security held for the account of Euroclear or CEDEL, Euroclear or CEDEL, as the case may be, is closed for business for 14 continuous Business Days or announces an intention to cease or permanently ceases business, owners of beneficial interests in a Global Security will not be entitled to have any portions of such Global Security registered in their names, will not receive or be entitled to receive physical delivery of Securities in definitive form and will not be considered the owners or holders of the Global Security. (c) Securities issued in exchange for a Global Security or any portion thereof pursuant to the last sentence of subsection (b) of this Section shall be issued in definitive, fully registered form, without interest coupons, shall have an aggregate principal amount equal to that of such Global Security or portion thereof to be so exchanged, shall be registered in such names and be in such authorized denominations as the Depositary shall designate and shall bear any legends required hereunder. Any Global Security to be exchanged in whole shall be surrendered by the Depositary to the Trustee, as Registrar. With regard to any Global Security to be exchanged in part, either such Global Security shall be so surrendered for exchange or, if the Trustee is acting as custodian for the Depositary or its nominee with respect to such Global Security, the principal amount thereof shall be reduced, by an amount equal to the portion thereof to be so exchanged, by means of an appropriate adjustment made on the records of the Trustee. Upon any such surrender or adjustment, the Trustee shall authenticate and make available for delivery the Security issuable on such exchange to or upon the order of the Depositary or an authorized representative thereof. In the event of the occurrence of any of the events specified in the last sentence of subsection (b) of this Section 306, the Company will promptly make available to the Trustee a reasonable supply of certificated Securities in definitive form. (d) Except as otherwise set forth in this Indenture or a Global Security, owners of beneficial interests in the Securities evidenced by a Global Security will not be entitled to any -39- 47 rights under this Indenture with respect to such Global Security, and the Depositary or its nominee may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the owner and Holder of such Global Security for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any such agent from giving effect to any written certification, proxy or other authorization furnished by the Depositary or its nominee or impair, as between the Depositary or its nominee and such owners of beneficial interests, the operation of customary practices governing the exercise of the rights of the Depositary or its nominee as Holder of any Security. SECTION 307. SPECIAL TRANSFER PROVISIONS. Unless and until (i) an Initial Security is sold under an effective Registration Statement, or (ii) an Initial Security is exchanged for an Exchange Security in connection with an effective Exchange Offer Registration Statement, in each case pursuant to the Registration Rights Agreement, the following provisions shall apply: (a) Restricted Global Security to Regulation S Global Security. If, at any time, an owner of a beneficial interest in a Restricted Global Security deposited with the Depositary (or the Trustee as custodian for the Depositary) wishes to transfer its interest in such Restricted Global Security to a Person who is required or permitted to take delivery thereof in the form of an interest in a Regulation S Global Security, such owner shall, subject to the Applicable Procedures, exchange or cause the exchange of such interest for an equivalent beneficial interest in a Regulation S Global Security as provided in this Section 307(a). Upon receipt by the Trustee of (1) instructions given in accordance with the Applicable Procedures from an Agent Member directing the Trustee to credit or cause to be credited a beneficial interest in the Regulation S Global Security in an amount equal to the beneficial interest in the applicable Restricted Global Security to be exchanged, (2) a written order given in accordance with the Applicable Procedures containing information regarding the participant account of the Depositary and the Euroclear or CEDEL account (if applicable) to be credited with such increase, and (3) a certificate substantially in the form of Exhibit A-1 hereto given by the owner of such beneficial interest, the Trustee, as Registrar, shall instruct the Depositary to reduce or cause to be reduced the aggregate principal amount of the applicable Restricted Global Security and to increase or cause to be increased the aggregate principal amount of the applicable Regulation S Global Security by the principal amount of the beneficial interest in the Restricted Global Security to be exchanged, to credit or cause to be credited to the account of the Person specified in such instructions a beneficial interest in the Regulation S Global Security equal to the reduction in the aggregate principal amount of the applicable Restricted Global Security, and to debit, or cause to be debited, from the account of the Person making such exchange or transfer the beneficial interest in the Restricted Global Security that is being exchanged or transferred. -40- 48 (b) Regulation S Global Security to Restricted Global Security. If, at any time, an owner of a beneficial interest in a Regulation S Global Security deposited with the Depositary or with the Trustee as custodian for the Depositary wishes to transfer its interest in such Regulation S Global Security to a Person who is required or permitted to take delivery thereof in the form of an interest in a Restricted Global Security, such owner shall, subject to the Applicable Procedures, exchange or cause the exchange of such interest for an equivalent beneficial interest in a Restricted Global Security, as provided in this Section 307(b). Upon receipt by the Trustee of (1) instructions given in accordance with the Applicable Procedures from an Agent Member, directing the Trustee, as Registrar, to credit or cause to be credited a beneficial interest in the Restricted Global Security equal to the beneficial interest in the Regulation S Global Security to be exchanged, (2) a written order given in accordance with the Applicable Procedures containing information regarding the participant account of the Depositary to be credited with such increase and (3) if such transfer is requested prior to the expiration of the Restricted Period, a certificate in the form of Exhibit A-2 attached hereto given by the owner of such beneficial interest, the Trustee, as Registrar, shall instruct the Depositary to reduce or cause to be reduced the aggregate principal amount of such Regulation S Global Security and to increase or cause to be increased the aggregate principal amount of the applicable Restricted Global Security by the principal amount of the beneficial interest in the Regulation S Global Security to be exchanged, and the Trustee, as Registrar, shall instruct the Depositary, concurrently with such reduction, to credit or cause to be credited to the account of the Person specified in such instructions a beneficial interest in the applicable Restricted Global Security equal to the reduction in the aggregate principal amount of such Regulation S Global Security and to debit or cause to be debited from the account of the Person making such transfer the beneficial interest in the Regulation S Global Security that is being transferred. After the expiration of the Restricted Period, the certificate described in clause (3) above shall no longer be required to effect transfers pursuant to this Section 307(b). (c) Transfers of U.S. Physical Securities for Restricted Global Security or Regulation S Global Security. If the holder of a U.S. Physical Security wishes at any time to transfer such holder's U.S. Physical Security to a Person who wishes to take delivery thereof in the form of a beneficial interest in the Regulation S Global Security or the Restricted Global Security, such transfer may be effected, subject to the Applicable Procedures, only in accordance with the provisions of this Section 307(c). Upon receipt by the Trustee of (1) instructions given in accordance with the Applicable Procedures from an Agent Member directing the Trustee to credit or cause to be credited a beneficial interest in the Regulation S Global Security or Restricted Global Security, as the case may be, in a principal amount equal to that of the U.S. Physical Securities to be so transferred, (2) a written order given in accordance with the Applicable Procedures containing information regarding the participant account of the Depositary (and the Euroclear or CEDEL account, as applicable) to be credited with such beneficial interest and (3) a -41- 49 certificate in substantially the form set forth in Exhibit A-3, given by the holder of such U.S. Physical Security, the Trustee, as Security Registrar, shall instruct the Depositary to increase the principal amount of the Regulation S Global Security or the Restricted Global Security, as the case may be, by the principal amount of the U.S. Physical Security to be so transferred, and to cancel or cause to be canceled such U.S. Physical Security. (d) Restricted Global Security or U.S. Physical Security to Regulation S Global Security After Two Years. If the holder of a beneficial interest in a Restricted Global Security or U.S. Physical Security wishes at any time after the second anniversary of the date of original issuance of the Securities to (A) transfer such interest to a Person who wishes to take delivery thereof in the form of a beneficial interest in the Regulation S Global Security or (B) to exchange such interest for a beneficial interest in a Regulation S Global Security, such transfer or exchange may be effected, subject to the Applicable Procedures, only in accordance with this Section 307(d). Upon receipt by the Trustee of (1) in the case of a transfer or exchange of an interest in the Restricted Global Security or a U.S. Physical Security, instructions given in accordance with the Applicable Procedures from an Agent Member directing the Trustee to credit or cause to be credited to a beneficial interest in the Regulation S Global Security in an amount equal to that the beneficial interest in the Restricted Global Security to be so transferred or exchanged, (2) a written order given in accordance with the Applicable Procedures containing information regarding the participant account of the Depositary (and, if applicable, the Euroclear or CEDEL account, as the case may be) to be credited with such beneficial interest and (3) a certificate substantially in the form of Exhibit A-4 hereto given by the holder of such beneficial interest, the Trustee, as Registrar, shall (i) in the case of a transfer or exchange of an interest in the Restricted Global Security, instruct the Depositary to reduce the principal amount of the Restricted Global Security, and to increase the principal amount of the Regulation S Global Security, by the principal amount of the beneficial interest in the Restricted Global Security to be so transferred or exchanged, and to credit or cause to be credited to the account of the Person specified in such instructions a beneficial interest in the Regulation S Global Security having a principal amount equal to the amount by which the principal amount of the Restricted Global Security was reduced upon such transfer or exchange or (ii) in the case of a transfer or exchange of a U.S. Physical Security, cancel such U.S. Physical Security and increase the principal amount of the Regulation S Global Security accordingly. (e) General. By its acceptance of any Security bearing the Private Placement Legend, each Holder of such a Security acknowledges the restrictions on transfer of such Security set forth in this Indenture and in the Private Placement Legend and agrees that it will transfer such Security only as provided in this Indenture. The Registrar shall retain copies of all letters, notices and other written communications received pursuant to Section 306 or this Section 307. The Company shall have the right to inspect -42- 50 and make copies of all such letters, notices or other written communications at any reasonable time upon the giving of reasonable written notice to the Registrar. SECTION 308. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES. If (a) any mutilated Security is surrendered to the Trustee, or (b) the Company and the Trustee receive evidence to their satisfaction of the destruction, loss or theft of any Security, and there is delivered to the Company and the Trustee such security or indemnity as may be required by them to save each of them harmless, then, in the absence of notice to the Company or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute and upon Company Order the Trustee shall authenticate and make available for delivery, in exchange for any such mutilated Security or in lieu of any such destroyed, lost or stolen Security, a replacement Security of like tenor and principal amount, bearing a number not contemporaneously outstanding. In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a replacement Security, pay such Security. Upon the issuance of any replacement Securities under this Section, the Company may require the payment of a sum sufficient to pay all documentary, stamp or similar issue or transfer taxes or other governmental charges that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith. Every replacement Security issued pursuant to this Section in lieu of any destroyed, lost or stolen Security shall constitute a contractual obligation of the Company, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all benefits of this Indenture equally and proportionately with any and all other Securities duly issued hereunder. The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities. SECTION 309. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED. Interest on any Security which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest. Any interest on any Security which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date and interest on such defaulted interest at the interest rate borne -43- 51 by the Securities, to the extent lawful (such defaulted interest and interest thereon herein collectively called "Defaulted Interest"), shall forthwith cease to be payable to the Holder on the Regular Record Date by virtue of having been such Holder; and such Defaulted Interest may be paid by the Company, at its election in each case, as provided in Subsection (a) or (b) below: (a) The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Securities (or their respective Predecessor Securities) are registered at the close of business on a Special Record Date for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Security and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this Subsection provided. Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such Special Record Date. In the name and at the expense of the Company, the Trustee shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first-class postage prepaid, to each Holder at his address as it appears in the Security Register, not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been so mailed, such Defaulted Interest shall be paid to the Persons in whose names the Securities (or their respective Predecessor Securities) are registered on such Special Record Date and shall no longer be payable pursuant to the following Subsection (b). (b) The Company may make payment of any Defaulted Interest in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this Subsection, such payment shall be deemed practicable by the Trustee. Subject to the foregoing provisions of this Section, each Security delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security. -44- 52 SECTION 310. PERSONS DEEMED OWNERS. Prior to the time of due presentment for registration of transfer, the Company or the Trustee and any agent of the Company or the Trustee may treat the Person in whose name any Security is registered as the owner of such Security for the purpose of receiving payment of principal of (and premium, if any) and (subject to Section 309) interest on such Security and for all other purposes whatsoever, whether or not such Security be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary. SECTION 311. CANCELLATION. All Securities surrendered for payment, redemption, registration of transfer or exchange shall, if surrendered to any Person other than the Trustee, be made available for delivery to the Trustee and shall be promptly cancelled by it. The Company shall deliver to the Trustee for cancellation any Securities previously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever, and all Securities so delivered shall be promptly cancelled by the Trustee. No Securities shall be authenticated in lieu of or in exchange for any Securities cancelled as provided in this Section, except as expressly permitted by this Indenture. All cancelled Securities held by the Trustee shall be delivered to the Company if by a Company Order the Company shall direct that cancelled Securities be returned to it. SECTION 312. COMPUTATION OF INTEREST. Interest on the Securities shall be computed on the basis of a 360 day year of twelve 30-day months. SECTION 313. CUSIP NUMBERS The Company in issuing the Securities may use "CUSIP" numbers (if then generally in use) and, if so, the Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to Holders; provided, however, that any such notice may state that no representation is made as to the correctness and accuracy of such numbers either as printed on the Securities or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Securities, and any such redemption shall not be affected by any defect in or such omission of such numbers. -45- 53 ARTICLE FOUR DEFEASANCE AND COVENANT DEFEASANCE SECTION 401. COMPANY'S OPTION TO EFFECT DEFEASANCE OR COVENANT DEFEASANCE. The Company may, at its option by Board Resolution, at any time, with respect to the Securities, elect to have either Section 402 or Section 403 be applied to all Outstanding Securities upon compliance with the conditions set forth below in this Article Four. SECTION 402. DEFEASANCE AND DISCHARGE. Upon the Company's exercise under Section 401 of the option applicable to this Section 402, the Company shall be deemed to have been discharged from its obligations with respect to all Outstanding Securities on the date the conditions set forth below are satisfied (hereinafter, "defeasance"). For this purpose, such defeasance means that the Company shall be deemed to have paid and discharged the entire indebtedness represented by the Outstanding Securities, which shall thereafter be deemed to be "Outstanding" only for the purposes of Section 405 and the other Sections of this Indenture referred to in (A) and (B) below, and to have satisfied all its other obligations under such Securities and this Indenture insofar as such Securities are concerned (and the Trustee, on demand of and at the expense of the Company, shall execute proper instruments acknowledging the same), except for the following which shall survive until otherwise terminated or discharged hereunder: (A) the rights of Holders of Outstanding Securities to receive solely from the trust fund described in Section 404 and as more fully set forth in such Section, payments in respect of the principal of (and premium, if any) and interest on such Securities when such payments are due, (B) the Company's obligations with respect to such Securities under Sections 304, 305, 308, 1002 and 1013, (C) the rights, powers, trusts, duties and immunities of the Trustee hereunder and the Company's obligations in connection therewith, including the Company's obligations under Section 606 hereof and (D) this Article Four. Subject to compliance with this Article Four, the Company may exercise its option under this Section 402 notwithstanding the prior exercise of its option under Section 403 with respect to the Securities. SECTION 403. COVENANT DEFEASANCE. Upon the Company's exercise under Section 401 of the option applicable to this Section 403, the Company shall be released from its obligations under any covenant contained in Articles Eight and Twelve and in Sections 1004 through 1012 with respect to the Outstanding Securities on and after the date the conditions set forth below are satisfied (hereinafter, "covenant defeasance"), and the Securities shall thereafter be deemed to be not "Outstanding" for the purposes of any direction, waiver, consent or declaration or Act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed "Outstanding" for all other purposes hereunder (it being understood that such Securities shall not be deemed Outstanding for financial accounting purposes). For this purpose, such covenant defeasance means -46- 54 that, with respect to the Outstanding Securities, the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not constitute a Default or an Event of Default under Sections 501(c) and 501(d), but, except as specified above, the remainder of this Indenture (including Section 606 hereof) and such Securities shall be unaffected thereby. In addition, upon the Company's exercise under Section 401 of the option applicable to Section 403, Sections 501(c) through (f) shall not constitute Events of Default. SECTION 404. CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE. The following shall be the conditions to application of either Section 402 or Section 403 to the Outstanding Securities: (1) The Company shall irrevocably have deposited or caused to be deposited with the Trustee (or another trustee satisfying the requirements of Section 608 who shall agree to comply with the provisions of this Article Four applicable to it) as trust funds in trust for the purpose of making the following payments, specifically pledged as security for, and dedicated solely to, the benefit of the Holders of such Securities, (A) cash in U.S. Dollars in an amount, or (B) U.S. Government Obligations which through the scheduled payment of principal and interest in respect thereof in accordance with their terms will provide, not later than one day before the due date of any payment, cash in U.S. Dollars in an amount, or (C) a combination thereof, sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge and which shall be applied by the Trustee (or other qualifying trustee) to pay and discharge, the principal of (and premium, if any) and interest on the Outstanding Securities on the Stated Maturity (or Redemption Date, if applicable) of such principal (and premium, if any) or installment of interest; provided that the Trustee shall have been irrevocably instructed to apply such money or the proceeds of such U.S. Government Obligations to said payments with respect to the Securities. Before such a deposit, the Company may give the Trustee, in accordance with Section 1103 hereof, a notice of its election to redeem all of the Outstanding Securities at a future date in accordance with Article Eleven hereof, which notice shall be irrevocable. For this purpose, "U.S. Government Obligations" means securities that are (x) direct obligations of the United States of America for the timely payment of which its full faith and credit is pledged or (y) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, which, in either case, are not callable or redeemable at the option of the issuer thereof, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act), as custodian with respect to any such U.S. Government Obligation or a specific payment of principal of or interest on any such U.S. -47- 55 Government Obligation held by such custodian for the account of the holder of such depository receipt, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the U.S. Government Obligation or the specific payment of principal of or interest on the U.S. Government Obligation evidenced by such depository receipt. (2) No Default or Event of Default shall have occurred and be continuing on the date of such deposit or, insofar as Section 501(g), (h) or (i) is concerned, at any time during the period ending on the 91st day after the date of such deposit (it being understood that this condition shall not be deemed satisfied until the expiration of such period). (3) Such defeasance or covenant defeasance shall not result in a breach or violation of, or constitute a default under, this Indenture or any other material agreement or instrument to which the Company is a party or by which it is bound and is not prohibited by Article Twelve hereof. (4) In the case of an election under Section 402, the Company shall have delivered to the Trustee an Opinion of Counsel in the United States stating that (x) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (y) since September 24, 1997, there has been a change in the applicable United States federal income tax law, in either case to the effect that, and based thereon such opinion shall confirm that, the Holders of the Outstanding Securities will not recognize income, gain or loss for United States federal income tax purposes as a result of such defeasance and will be subject to United States federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such defeasance had not occurred. (5) In the case of an election under Section 403, the Company shall have delivered to the Trustee an Opinion of Counsel in the United States to the effect that the Holders of the Outstanding Securities will not recognize income, gain or loss for United States federal income tax purposes as a result of such covenant defeasance and will be subject to United States federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such covenant defeasance had not occurred. (6) The Company shall have delivered to the Trustee an Opinion of Counsel in the United States to the effect that such deposit shall not cause the Trustee or the trust so created to be subject to the Investment Company Act of 1940. (7) The Company shall have delivered to the Trustee an Officers' Certificate stating that the deposit made by the Company pursuant to its election under Section 402 or 403 was not made by the Company with the intent of preferring the Holders over other -48- 56 creditors of the Company or with the intent of defeating, hindering, delaying or defrauding creditors of the Company or others. (8) The Company shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel in the United States, each stating that all conditions precedent relating to either the defeasance under Section 402 or the covenant defeasance under Section 403 (as the case may be) have been complied with. Notwithstanding the provisions of this Article Four, the obligations of the Company to the Trustee under Section 606 shall survive. SECTION 405. DEPOSITED MONEY AND U.S. GOVERNMENT OBLIGATIONS TO BE HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS. Subject to the provisions of the last paragraph of Section 1003, all money and U.S. Government Obligations (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 405, the "Trustee") pursuant to Section 404 in respect of the Outstanding Securities shall be held in trust and applied by the Trustee, in accordance with the provisions of such Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Holders of such Securities of all sums due and to become due thereon in respect of principal (and premium, if any) and interest, but such money need not be segregated from other funds except to the extent required by law. The Company shall pay and indemnify the Trustee on an after-tax basis against any tax, fee or other charge imposed on or assessed against the cash or U.S. Government Obligations deposited pursuant to Section 404 or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the Outstanding Securities. Anything in this Article Four to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon Company Request any money or U.S. Government Obligations held by it as provided in Section 404 which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 404(1)), are in excess of the amount thereof which would then be required to be deposited to effect an equivalent defeasance or covenant defeasance. SECTION 406. REINSTATEMENT. If the Trustee or Paying Agent is unable to apply any money in accordance with Section 405, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Company's obligations under this -49- 57 Indenture and the Securities shall be revived and reinstated as though no deposit had occurred pursuant to Section 402 or 403, as the case may be, until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 405; provided, however, that, if the Company makes any payment of principal of (or premium, if any) or interest on any Security following the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Securities to receive such payment from the money held by the Trustee or Paying Agent. ARTICLE FIVE REMEDIES SECTION 501. EVENTS OF DEFAULT. "Event of Default", wherever used herein, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body): (a) default in the payment of any interest on any Security when it becomes due and payable and continuance of such default for a period of 30 days; (b) default in the payment of the principal of or premium, if any, on any Security at its Maturity (upon acceleration, optional redemption, required purchase or otherwise); (c) default in the payment of principal and interest when due and payable on any Security required to be repurchased pursuant to an Offer to Purchase upon a Change of Control; (d) default in the performance, or breach, of any covenant or warranty of the Company contained in this Indenture (other than a default in the performance, or breach, of a covenant or warranty which is specifically dealt with in clause (a), (b) or (c) above) and continuance of such default or breach for a period of 60 days after written notice shall have been given to the Company by the Trustee or to the Company and the Trustee by the holders of at least 25% in aggregate principal amount of the Securities then Outstanding; (e) (A) one or more defaults in the payment of principal of or premium, if any, on Indebtedness of the Company or any Subsidiary, aggregating $5.0 million or more, when the same becomes due and payable at the stated maturity thereof, and such default or defaults shall have continued after any applicable grace period and shall not have been cured or waived or (B) Indebtedness of the Company or any Subsidiary aggregating $5.0 -50- 58 million or more shall have been accelerated or otherwise declared due and payable, or required to be prepaid or repurchased (other than by regularly scheduled prepayment) prior to the stated maturity thereof; (f) any holder of any Indebtedness in excess of $5.0 million in the aggregate of the Company or any Subsidiary shall notify the Trustee of the intended sale or disposition of any assets of the Company or any Subsidiary that have been pledged to or for the benefit of such Person to secure such Indebtedness or shall commence proceedings, or take action (including by way of set-off) to retain in satisfaction of any such Indebtedness, or to collect on, seize, dispose of or apply, any such asset of the Company or any Subsidiary pursuant to the terms of any agreement or instrument evidencing any such Indebtedness of the Company or any Subsidiary or in accordance with applicable law; (g) one or more final judgments or orders shall be rendered against the Company or any Subsidiary for the payment of money, either individually or in an aggregate amount, in excess of $5.0 million and shall not be discharged and either (A) an enforcement proceeding shall have been commenced by any creditor upon such judgment or order or (B) there shall have been a period of 60 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, was not in effect; and (h) the Company or any Subsidiary pursuant to or under or within the meaning of any Bankruptcy Law: (1) commences a voluntary case or proceeding; (2) consents to the entry of a Bankruptcy Order in an involuntary case or proceeding or the commencement of any case against it; (3) consents to the appointment of a Custodian of it or for any substantial part of its property; (4) makes a general assignment for the benefit of its creditors or files a proposal or other scheme of arrangement involving the rescheduling or composition of its indebtedness; (5) files a petition in bankruptcy or an answer or consent seeking reorganization or relief; or (6) consents to the filing of such petition in bankruptcy or the appointment of or taking possession by a Custodian; or -51- 59 (i) a court of competent jurisdiction in any involuntary case or proceeding enters a Bankruptcy Order against the Company or any Subsidiary, and such Bankruptcy Order remains unstayed and in effect for 60 consecutive days; or (j) a Custodian shall be appointed out of court with respect to the Company or any Subsidiary, or with respect to all or any substantial part of the property of the Company or any Subsidiary. "Custodian" means any receiver, interim receiver, receiver and manager, trustee, assignee, liquidator, sequestrator or similar official under any Bankruptcy Law or any other person with like powers. "Bankruptcy Order" means any court order made in a proceeding pursuant to or within the meaning of any Bankruptcy Law, containing an adjudication of bankruptcy or insolvency, or providing for liquidation, winding up, dissolution or reorganization, or appointing a Custodian of a debtor or of all or any substantial part of a debtor's property, or providing for the staying, arrangement, adjustment or composition of indebtedness or other relief of a debtor. SECTION 502. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT. If an Event of Default (other than an Event of Default specified in Section 501(h), (i) or (j)) occurs and is continuing, then and in every such case the Trustee, by notice to the Company, or the Holders of not less than 25% in principal amount of the Securities Outstanding, by notice to the Company and the Trustee, may declare the principal of all the Securities to be due and payable immediately. If an Event of Default specified in Section 501(h), (i) or (j) occurs and is continuing, then the principal of all the Securities shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder. The Company will deliver to the Trustee, within 10 days after the occurrence thereof, notice of any default or acceleration referred to in Sections 501(c) and 501(d). At any time after a declaration of acceleration has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article provided, the Holders of a majority in principal amount of the Securities Outstanding, by written notice to the Company and the Trustee, may rescind and annul such declaration and its consequences if: (a) the Company has paid or deposited, or caused to be paid or deposited, with the Trustee a sum sufficient to pay (1) all overdue interest on all Securities, -52- 60 (2) the principal of (and premium, if any, on) any Securities that has become due otherwise than by such declaration of acceleration and interest thereon at the rate borne by the Securities, (3) to the extent that payment of such interest is lawful, interest upon overdue interest at the rate borne by the Securities, and (4) all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel; and (b) all Events of Default, other than the non-payment of principal of Securities which have become due solely by such declaration of acceleration, have been cured or waived as provided in Section 513. No such rescission shall affect any subsequent default or impair any right consequent thereon. Notwithstanding the preceding paragraph, in the event of a declaration of acceleration in respect of the Securities because an Event of Default specified in Section 501(e) shall have occurred and be continuing, such declaration of acceleration shall be automatically annulled if the Indebtedness that is the subject of such Event of Default has been discharged or the holders thereof have rescinded their declaration of acceleration in respect of such Indebtedness, and written notice of such discharge or rescission, as the case may be, shall have been given to the Trustee by the Company and countersigned by the holders of such Indebtedness or a trustee, fiduciary or agent for such holders, within 30 days after such declaration of acceleration in respect of the Securities, and no other Event of Default has occurred during such 30-day period which has not been cured or waived during such period. SECTION 503. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE. The Company covenants that if (a) default is made in the payment of any interest on any Security when it becomes due and payable and such default continues for a period of 30 days, or (b) default is made in the payment of the principal of (or premium, if any, on) any Security at its Maturity, the Company will, upon demand of the Trustee, pay to it, for the benefit of the Holders of such Securities, the whole amount then due and payable on such Securities for principal (and premium, if any) and interest, with interest upon the overdue principal (and premium, if any) and, to the extent that payment of such interest shall be legally enforceable, upon overdue installments of interest, at the rate borne by the Securities; and, in addition thereto, such further amount as shall -53- 61 be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel. If the Company fails to pay such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, may institute a judicial proceeding for the collection of the sums so due and unpaid and may prosecute such proceeding to judgment or final decree, and may enforce the same against the Company or any other obligor upon the Securities and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Company or any other obligor upon the Securities, wherever situated. If an Event of Default occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders under this Indenture by such appropriate private or judicial proceedings as the Trustee shall deem most effectual to protect and enforce such rights. SECTION 504. TRUSTEE MAY FILE PROOFS OF CLAIM. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the Company or any other obligor upon the Securities or the property of the Company or of such other obligor or their creditors, the Trustee (irrespective of whether the principal of the Securities shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the Company for the payment of overdue principal or interest) shall be entitled and empowered, by intervention in such proceeding or otherwise, (a) to file and prove a claim for the whole amount of principal (and premium, if any) and interest owing and unpaid in respect of the Securities and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and of the Holders allowed in such judicial proceeding, and (b) to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due to the Trustee under Section 606. -54- 62 Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any proposal, plan of reorganization, arrangement, adjustment or composition or other similar arrangement affecting the Securities or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding. SECTION 505. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES. All rights of action and claims under this Indenture or the Securities may be prosecuted and enforced by the Trustee without the possession of any of the Securities or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name and as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Securities in respect of which such judgment has been recovered. SECTION 506. APPLICATION OF MONEY COLLECTED. Any money collected by the Trustee pursuant to this Article shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal (or premium, if any) or interest, upon presentation of the Securities and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid: FIRST: To the payment of all amounts due the Trustee under Section 606; and SECOND: Subject to Article Twelve, to the payment of the amounts then due and unpaid upon the Securities for principal (and premium, if any) and interest, in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal (and premium, if any) and interest. SECTION 507. LIMITATION ON SUITS. No Holder of any Securities shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture or the Securities, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless (a) such Holder has previously given written notice to the Trustee of a continuing Event of Default; -55- 63 (b) the Holders of not less than 25% in principal amount of the Outstanding Securities shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder; (c) such Holder or Holders have offered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request; (d) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and (e) no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in principal amount of the Outstanding Securities; it being understood and intended that no one or more Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other Holders, or to obtain or to seek to obtain priority or preference over any other Holders or to enforce any right under this Indenture except in the manner provided in this Indenture and for the equal and ratable benefit of all the Holders. SECTION 508. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM AND INTEREST. Notwithstanding any other provision in this Indenture, the Holder of any Security shall have the right as between itself and the Company, which is absolute and unconditional, to receive payment of the principal of (and premium, if any) and (subject to Section 309) interest on the respective due dates expressed in such Security (or, in the case of redemption, on the Redemption Date) and to institute suit for the enforcement of any such payment, and such rights shall not be impaired without the consent of such Holder. SECTION 509. RESTORATION OF RIGHTS AND REMEDIES. If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case the Company, the Trustee and the Holders shall, subject to any determination in such proceeding, be restored severally and respectively to their former positions hereunder, and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted. -56- 64 SECTION 510. RIGHTS AND REMEDIES CUMULATIVE. Except as provided in Section 308, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy. SECTION 511. DELAY OR OMISSION NOT WAIVER. No delay or omission of the Trustee or of any Holder of any Security to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be. SECTION 512. CONTROL BY HOLDERS. The Holders of a majority in principal amount of the Outstanding Securities shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, provided that (a) such direction shall not be in conflict with any rule of law or with this Indenture or expose the Trustee to personal liability or be prejudicial to Holders not joining therein, and (b) subject to the provisions of Trust Indenture Act Section 315, the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction. SECTION 513. WAIVER OF PAST DEFAULTS. The Holders of a majority in aggregate principal amount of the Outstanding Securities may on behalf of the Holders of all the Securities waive any past default hereunder and its consequences, except a default (a) in the payment of the principal of (or premium, if any) or interest on any Security, or (b) arising from a failure to make or consummate a Change of Control Offer in accordance with the provisions of Section 1011 hereof, or -57- 65 (c) in respect of a covenant or provision hereof which under Article Nine cannot be modified or amended without the consent of the Holder of each Outstanding Security affected. Upon any such waiver, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon. SECTION 514. UNDERTAKING FOR COSTS. All parties to this Indenture agree, and each Holder of any Security by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to any suit instituted by the Trustee, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10% in principal amount of the Outstanding Securities, or to any suit instituted by any Holder for the enforcement of the payment of the principal of (or premium, if any) or interest on any Security on or after the respective Stated Maturities expressed in such Security (or, in the case of redemption, on or after the Redemption Date). SECTION 515. WAIVER OF STAY, EXTENSION OR USURY LAWS. The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted. -58- 66 SECTION 516. APPLICATION OF TRUST INDENTURE ACT TO THIS INDENTURE. Prior to the effectiveness of the Registration Statement, this Indenture shall incorporate and be governed by the provisions of the Trust Indenture Act. After the effectiveness of the Registration Statement, this Indenture shall be subject to the provisions of the Trust Indenture Act that are required to be a part of this Indenture and shall, to the extent applicable, be governed by such provisions. ARTICLE SIX THE TRUSTEE SECTION 601. NOTICE OF DEFAULTS. Within 90 days after the occurrence of any Default, the Trustee shall transmit by mail to all Holders, as their names and addresses appear in the Security Register, notice of such Default hereunder known to the Trustee, unless such Default shall have been cured or waived; provided, however, that, except in the case of a default in the payment of the principal of (or premium, if any) or interest on any Security, the Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee or a trust committee of directors and/or Responsible Officers of the Trustee in good faith determines that the withholding of such notice is in the interest of the Holders; and provided further that, in the case of any default or breach of the character specified in Section 501(c), no such notice to Holders shall be given until at least 30 days after the occurrence thereof. SECTION 602. CERTAIN RIGHTS OF TRUSTEE. Subject to the provisions of Trust Indenture Act Sections 315(a) through (d), which provisions are incorporated by reference herein: (a) the Trustee may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties; (b) any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order and any resolution of the Board of Directors may be sufficiently evidenced by a Board Resolution; (c) whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any -59- 67 action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officers' Certificate; (d) the Trustee may consult with counsel of its selection and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon; (e) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction; (f) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney at the sole cost of the Company; (g) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder; (h) no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it; (i) the Trustee shall not be liable for any action taken, suffered, or omitted to be taken by it in good faith and reasonably believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture; and (j) the Trustee shall not be deemed to have notice of any Event of Default unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Securities and this Indenture. -60- 68 SECTION 603. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES. The recitals contained herein and in the Securities, except the Trustee's certificates of authentication, shall be taken as the statements of the Company, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Indenture or the Securities. The Trustee shall not be accountable for the use or application by the Company of Securities or the proceeds thereof. SECTION 604. MAY HOLD SECURITIES. The Trustee, any Paying Agent, Security Registrar or any other agent of the Company, in its individual or any other capacity, may become the owner or pledgee of Securities, and, subject to Trust Indenture Act Sections 310(b) and 311, may otherwise deal with the Company with the same rights it would have if it were not Trustee, Paying Agent, Security Registrar or such other agent. SECTION 605. MONEY HELD IN TRUST. Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed in writing with the Company. SECTION 606. COMPENSATION AND REIMBURSEMENT. The Company agrees: (a) to pay to the Trustee from time to time such compensation as shall be agreed to in writing by the Company and the Trustee for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); (b) except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel of its selection), except any such expense, disbursement or advance as may be attributable to its negligence or bad faith; and (c) to indemnify the Trustee for, and to hold it harmless against, any loss, liability or expense including taxes (other than taxes based upon, measured by or determined by the income of the Trustee) incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of this trust, -61- 69 including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. The Trustee shall notify the Company promptly of any claim for which it may seek indemnity. Failure by the Trustee to notify the Company shall not relieve the Company of its obligations hereunder. The obligations of the Company under this Section shall not be subordinated to the payment of Senior Indebtedness pursuant to Article 12. As security for the performance of the obligations of the Company under this Section, the Trustee shall have a claim and lien prior to the Securities upon all property and funds held or collected by the Trustee as such, except funds held in trust for the payment of principal of (and premium, if any) or interest on particular Securities. The Trustee shall have a lien prior to the Securities as to all property and funds held by it hereunder for any amount owing it or any predecessor Trustee pursuant to this Section 606, except with respect to funds held in trust for the payment of principal of (and premium, if any) or interest on particular Securities. When the Trustee incurs expenses or renders services in connection with an Event of Default specified in Section 501(f) or Section 501(g), the expenses (including the reasonable charges and expenses of its counsel) and the compensation for the services are intended to constitute expenses of administration under any applicable Federal or state bankruptcy, insolvency or other similar law. The provisions of this Section shall survive the termination of this Indenture. SECTION 607. CONFLICTING INTERESTS. The Trustee shall comply with the provisions of Section 310(b) of the Trust Indenture Act provided, however, that there shall be excluded from the operation of Trust Indenture Act Section 310 (b)(1) any indenture or indentures under which other securities or certificates of interest or participation in other securities of the Company are outstanding if the requirements for such exclusion set forth in Trust Indenture Act Section 310 (b) (1) are met. SECTION 608. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY. There shall at all times be a Trustee hereunder which shall be eligible to act as Trustee under Trust Indenture Act Section 310(a)(1) and which shall have a combined capital and surplus of at least $50,000,000 and have its Corporate Trust Office in any state of the United States of America to the extent there is such an institution eligible and willing to serve. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of federal, State, Territorial or District of Columbia supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such corporation shall be deemed to be its -62- 70 combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article. SECTION 609. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR. (a) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee under Section 610. (b) The Trustee, or any successor Trustee, may resign at any time by giving written notice thereof to the Company. If an instrument of acceptance by a successor Trustee shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee or the Holders of a majority in principal amount of the Outstanding Securities may petition any court of competent jurisdiction for the appointment of a successor Trustee. (c) The Trustee may be removed at any time by an Act of the Holders of a majority in principal amount of the Outstanding Securities, delivered to the Trustee and to the Company. (d) If at any time: (1) the Trustee shall fail to comply with the provisions of Trust Indenture Act Section 310(b) after written request therefor by the Company or by any Holder who has been a bona fide Holder of a Security for at least six months, or (2) the Trustee shall cease to be eligible under Section 608 and shall fail to resign after written request therefor by the Company or by any Holder who has been a bona fide Holder of a Security for at least six months, or (3) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then, in any case, (i) the Company by a Board Resolution may remove the Trustee, or (ii) subject to Section 514, the Holder of any Security who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee (e) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, the Company, by a Board Resolution, shall promptly appoint a successor Trustee. If, within one year after such resignation, removal -63- 71 or incapability, or the occurrence of such vacancy, a successor Trustee shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance with Section 610, become the successor Trustee and supersede the successor Trustee appointed by the Company. If no successor Trustee shall have been so appointed by the Company or the Holders of the Securities and so accepted appointment, the Holder of any Security who has been a bona fide Holder for at least six months may on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee. (f) The Company shall give notice of each resignation and each removal of the Trustee and each appointment of a successor Trustee by mailing written notice of such event by first-class mail, postage prepaid, to the Holders of Securities as their names and addresses appear in the Security Register and to an authorized representative of the holders of Designated Senior Indebtedness. Each notice shall include the name of the successor Trustee and the address of its Corporate Trust Office. If an instrument of acceptance by a successor Trustee shall not have been delivered to the Trustee within 30 days after such removal, the removed Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee. SECTION 610. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR. Every successor Trustee appointed hereunder shall execute, acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on request of the Company or the successor Trustee, such retiring Trustee shall, upon payment of all amounts due it under Section 606, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee, and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder subject to the claim and lien provided for in Section 606. Upon request of any such successor Trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts. No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article. SECTION 611. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS. Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all of the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided -64- 72 such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities; and in case at that time any of the Securities shall not have been authenticated, any successor to the Trustee may authenticate such Securities either in the name of any predecessor hereunder or in the name of the successor to the Trustee; and in all such cases, such Securities shall have the full force to be and effect provided for anywhere in the Securities or this Indenture. ARTICLE SEVEN HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY SECTION 701. DISCLOSURE OF NAMES AND ADDRESSES OF HOLDERS. The Company will furnish or cause to be furnished to the Trustee (a) semi-annually, not more than 15 days after each Regular Record date, a list, in such form as the Trustee may reasonably require, of the names and addresses of the Holders of Securities as of such Regular Record Date, and (b) at such other times as the Trustee may request in writing, within 30 days after the receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished, provided no such list need be furnished if the Trustee shall be the Security Registrar. Every Holder of Securities, by receiving and holding the same, agrees with the Company and the Trustee that neither the Company nor the Trustee shall be held accountable by reason of the disclosure of any information as to the names and addresses of the Holders in accordance with this Section 701, regardless of the source from which such information was derived, and that the Trustee shall not be held accountable by reason of mailing any material pursuant to a request made under this Section 701. SECTION 702. REPORTS BY TRUSTEE. Within 60 days after May 15 of each year commencing with the first May 15 after the first issuance of Securities, the Trustee shall transmit by mail to all Holders, as their names and addresses appear in the Security Register, as provided in Trust Indenture Act Section 313(c), a brief report dated as of such May 15 if required by Trust Indenture Act Section 313(a). -65- 73 SECTION 703. REPORTS BY COMPANY. The Company shall: (a) file with the Trustee, within 30 days after the Company is required to file the same with the Commission, copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may from time to time by rules and regulations prescribe) which the Company may be required to file with the Commission pursuant to Section 13 or Section 15(d) of the Exchange Act; or, if the Company is not required to file information, documents or reports pursuant to either of said Sections, then it shall file with the Trustee and the Commission, in accordance with rules and regulations prescribed from time to time by the Commission, such of the supplementary and periodic information, documents and reports which may be required pursuant to Section 13 of the Exchange Act in respect of a security listed and registered on a national securities exchange as may be prescribed from time to time in such rules and regulations; (b) file with the Trustee and the Commission, in accordance with rules and regulations prescribed from time to time by the Commission, such additional information, documents and reports with respect to compliance by the Company with the conditions and covenants of this Indenture as may be required from time to time by such rules and regulations; and (c) transmit by mail to all Holders, as their names and addresses appear in the Security Register, within 30 days after the filing thereof with the Trustee, in the manner and to the extent provided in Trust Indenture Act Section 313(c), such summaries of any information, documents and reports required to be filed by the Company pursuant to Subsections (a) and (b) of this Section as may be required by rules and regulations prescribed from time to time by the Commission. Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee's receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company's compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers' Certificates). -66- 74 ARTICLE EIGHT CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE SECTION 801. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS. The Company shall not, in a single transaction or through a series of related transactions, (i) consolidate with or merge with or into any other Person or (ii) directly or indirectly, sell, assign, transfer, lease or otherwise dispose of all or substantially all of its properties and assets to any Person unless: (a) either the Company shall be the continuing Person or the Person (if other than the Company) formed by such consolidation or into which the Company is merged or the Person that acquired such properties and assets of the Company by assignment, transfer, lease or other disposition (the "Surviving Entity") shall be a corporation duly organized and validly existing under the laws of the United States of America, any state thereof or the District of Columbia and shall, in either case, expressly assume by supplemental indenture, all the obligations of the Company under the Securities and the Indenture, (b) immediately before and immediately after giving effect to such transaction on a pro forma basis, no Default or Event of Default shall have occurred and be continuing, and (c) immediately after giving effect to such transaction on a pro forma basis, the Surviving Entity could incur $1.00 of additional Indebtedness (other than Permitted Indebtedness) pursuant to Section 1007 hereof. In connection with any consolidation, merger, transfer or lease contemplated hereby, the Company shall deliver, or cause to be delivered, to the Trustee, in the form and substance reasonably satisfactory to the Trustee, an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger, transfer or lease and the supplemental indenture in respect thereto comply with the provisions described herein and that all conditions precedent herein provided for or relating to such transaction have been complied with. SECTION 802. SUCCESSOR SUBSTITUTED. Upon any consolidation, merger or sale, assignment, transfer, lease or other disposition of all or substantially all of the assets of the Company in accordance with Section 801, the Surviving Entity shall succeed to, shall be substituted for and may exercise every right and power of the Company under the Securities and this Indenture, with the same effect as if such successor corporation had been named as the Company herein. In the event of any transaction (other than -67- 75 a lease) described and listed in Section 801 in which the Company is not the Surviving Entity, the Surviving Entity formed or remaining shall succeed to, be substituted for and may exercise every right and power of the Company, and the Company shall be discharged from all obligations and covenants under the Securities and this Indenture. ARTICLE NINE SUPPLEMENTS AND AMENDMENTS TO INDENTURE SECTION 901. SUPPLEMENTAL INDENTURES AND AMENDMENTS WITHOUT CONSENT OF HOLDERS. Without the consent of any Holders, the Company, when authorized by a Board Resolution, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes: (a) to evidence the succession of another Person to the Company, and the assumption by any such successor of the covenants of the Company herein and in the Securities; (b) to add to the covenants of the Company, for the benefit of the Holders, or to surrender any right or power herein or in the Securities conferred upon the Company; (c) to cure any ambiguity, to correct or supplement any provision herein which may be defective or inconsistent with any other provision herein, or to make any other provisions with respect to matters or questions arising under this Indenture which shall not be inconsistent with the provisions of this Indenture; provided that, in each case, such other provisions shall not adversely affect the interests of the Holders in any material respect; (d) to secure the Securities; or (e) to make any change in Article Ten hereof or in Article Twelve or the related definitions herein contained that would limit or terminate the benefits available to any holder of Senior Indebtedness (or authorized representatives therefor) under such Article; (f) to make any other change that does not adversely affect the rights of any Holder; or (g) to comply with the requirements of the Commission in order to effect or maintain the qualification of the Indenture under the Trust Indenture Act, as amended. -68- 76 Notwithstanding the foregoing, no amendment may be made to Article Twelve hereof that adversely affects the rights of any holder of any Senior Indebtedness then outstanding unless the holders of such Senior Indebtedness (or their representative) consent to such change. SECTION 902. SUPPLEMENTAL INDENTURES AND CERTAIN AMENDMENTS WITH CONSENT OF HOLDERS. With the consent of the Holders of not less than a majority in aggregate principal amount of the Outstanding Securities (including consents obtained in connection with a tender offer or exchange offer for the Securities), by Act of such Holders delivered to the Company and the Trustee, the Company, when authorized by a Board Resolution, and the Trustee may enter into one or more indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of waiving or modifying in any manner the rights of the Holders under this Indenture; provided, however, that no such supplemental indenture, amendment or waiver shall, without the consent of the Holder of each Outstanding Security affected thereby: (a) change the Stated Maturity of the principal of, or any installment of interest on, any Security, or reduce the principal amount thereof or the rate of interest thereon or any premium payable upon the redemption thereof, or change the coin or currency in which the principal of any Security or any premium or the interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date); or (b) reduce the amount of, or change the coin or currency of, or impair the right to institute suit for the enforcement of, the Purchase Price that would be payable in connection with a Change of Control Offer; or (c) reduce the percentage in principal amount of the Outstanding Securities, the consent of whose Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver (of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences) provided for in this Indenture; or (d) modify any of the provisions of this Section or Sections 513 and 1014, except to increase any such percentage or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Security affected thereby; or (e) modify any of the provisions of this Indenture relating to the subordination of the Securities in a manner adverse to any Holder. -69- 77 It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof. SECTION 903. EXECUTION OF SUPPLEMENTAL INDENTURES. In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and (subject to Trust Indenture Act Sections 315(a) through (d) and Section 602 hereof) shall be fully protected in relying upon, an Officers' Certificate and an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the Trustee's own rights, duties or immunities under this Indenture or otherwise. SECTION 904. EFFECT OF SUPPLEMENTAL INDENTURES. Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby. SECTION 905. CONFORMITY WITH TRUST INDENTURE ACT. Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act as then in effect. SECTION 906. REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES. Securities authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Securities so modified as to conform, in the opinion of the Trustee and the Board of Directors, to any such supplemental indenture may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding Securities. SECTION 907. NOTICE OF SUPPLEMENTAL INDENTURES. Promptly after the execution by the Company and the Trustee of any supplemental indenture pursuant to the provisions of Section 902, the Company shall give notice thereof to the Holders of each Outstanding Security affected, in the manner provided for in Section 107, setting forth in general terms the substance of such supplemental indenture. -70- 78 ARTICLE TEN COVENANTS SECTION 1001. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST. The Company will duly and punctually pay the principal of (and premium, if any) and interest on the Securities in accordance with the terms of the Securities and this Indenture. Principal of (premium, if any) and interest shall be considered paid on the date due if as of 10:00 a.m. (New York City time) on such date the Trustee or the Paying Agent if other than the Company or an Affiliate of the Company holds in accordance with this Indenture money in immediately available funds sufficient to pay all principal (premium, if any) and interest then due and the Trustee, the Paying Agent or the Affiliate of the Company, as the case may be, is not prohibited from paying such money to the Holders on that date pursuant to the terms of this Indenture. SECTION 1002. MAINTENANCE OF OFFICE OR AGENCY. The Company will maintain, in The City of New York, an office or agency where Securities may be presented or surrendered for payment, where Securities may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Securities and this Indenture may be served. The Corporate Trust Office of the Trustee shall be such office or agency of the Company, unless the Company shall designate and maintain some other office or agency for one or more of such purposes. The Company will give prompt written notice to the Trustee of any change in the location of any such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands. The Company may from time to time designate one or more other offices or agencies (in or outside of The City of New York) where the Securities may be presented or surrendered for any or all such purposes, and may from time to time rescind such designation; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in The City of New York for such purposes. The Company will give prompt written notice to the Trustee of any such designation or rescission and any change in the location of any such office or agency. -71- 79 SECTION 1003. MONEY FOR SECURITY PAYMENTS TO BE HELD IN TRUST. If the Company shall at any time act as its own Paying Agent, it will, on or before each due date of the principal of (and premium, if any) or interest on any of the Securities, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal (and premium, if any) or interest so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided, and will promptly notify the Trustee of its action or failure so to act. Whenever the Company shall have one or more Paying Agents for the Securities, it will, on or before each due date of the principal of (and premium, if any) or interest on any Securities, deposit with a Paying Agent a sum in same day funds (or New York Clearing House funds if such deposit is made prior to the date on which such deposit is required to be made) sufficient to pay the principal (and premium, if any) or interest so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal, premium or interest and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of such action or any failure so to act. The Company will cause each Paying Agent other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent will: (a) hold all sums held by it for the payment of the principal of (and premium, if any) or interest on Securities in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided; (b) give the Trustee notice of any default by the Company (or any other obligor upon the Securities) in the making of any payment of principal (and premium, if any) or interest; and (c) at any time during the continuance of any such default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent. The Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money. Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of (and premium, if any) or interest on any Security and -72- 80 remaining unclaimed for two years after such principal (and premium, if any) or interest has become due and payable shall be paid to the Company on Company Request unless an abandoned property law designates another person, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Security shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in a newspaper published in the English language, customarily published on each Business Day and of general circulation in The City of New York, or mail to each such Holder or both, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication or mailing, any unclaimed balance of such money then remaining will be repaid to the Company. SECTION 1004. CORPORATE EXISTENCE. Subject to Article Eight, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect the corporate existence and corporate power and authority of the Company and each Subsidiary; provided, however, that the Company shall not be required to preserve any such corporate existence and corporate power and authority if the Company shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and its Subsidiaries taken as a whole. SECTION 1005. PAYMENT OF TAXES AND OTHER CLAIMS. The Company will pay or discharge or cause to be paid or discharged, before the same shall become delinquent, (a) all material taxes, assessments and governmental charges levied or imposed upon the Company or any Subsidiary or upon the income, profits or property of the Company or any Subsidiary and (b) all material lawful claims for labor, materials and supplies, which, if unpaid, might by law become a Lien upon the property of the Company or any Subsidiary that could produce a material adverse effect on the consolidated financial condition of the Company; provided, however, that the Company shall not be required to pay or discharge or cause to be paid or discharged any such tax, assessment, charge or claim whose amount, applicability or validity is being contested in good faith by appropriate proceedings. SECTION 1006. MAINTENANCE OF PROPERTIES. The Company will cause all properties owned by the Company or any Subsidiary or used or held for use in the conduct of its business or the business of any Subsidiary to be maintained and kept in good condition, repair and working order and supplied with all necessary equipment and will cause to be made all necessary repairs, renewals, replacements, betterments and improvements thereof, all as in the judgment of the Company may be necessary so that the business carried on in connection therewith may be properly and advantageously conducted at all -73- 81 times, except, in every case, as and to the extent that the Company may be prevented by fire, strikes, lockouts, acts of God, inability to obtain labor or materials, governmental restrictions, enemy action, civil commotion or unavoidable casualty or similar causes beyond the control of the Company; provided, however, that nothing in this Section shall prevent the Company from discontinuing the maintenance of any of such properties if such discontinuance is, in the judgment of the Company, desirable in the conduct of its business or the business of any Subsidiary and not disadvantageous in any material respect to the Holders. SECTION 1007. LIMITATION ON CONSOLIDATED INDEBTEDNESS. The Company will not, and will not permit any of its Subsidiaries to, create, incur, assume or guarantee, or in any other manner become directly or indirectly liable for the payment of, any Indebtedness (excluding Permitted Indebtedness) unless at the time of such event and after giving effect thereto on a pro forma basis the Company's Consolidated EBITDA Ratio for the four (4) full fiscal quarters immediately preceding such event, taken as one period calculated on the assumption that such Indebtedness had been incurred on the first day of such four-quarter period, is greater than or equal to 2.0:1. SECTION 1008. LIMITATION ON RESTRICTED PAYMENTS. The Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly: (a) declare or pay any dividend on, or make any distribution in respect of, any shares of the Capital Stock of the Company or any of its Subsidiaries (excluding dividends or distributions payable in shares of its Capital Stock or in options, warrants or other rights to purchase such Capital Stock, but including dividends or distributions payable in Redeemable Capital Stock or in options, warrants or other rights to purchase Redeemable Capital Stock (other than dividends on such Redeemable Capital Stock payable in shares of such Redeemable Capital Stock)) held by any Person other than the Company or any of its Wholly Owned Subsidiaries; or (b) purchase, redeem or acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than any Wholly Owned Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock; (such payments or any other actions described in (a) and (b) above are collectively referred to as "Restricted Payments") unless at the time of and after giving effect to the proposed Restricted Payment (the amount of any such Restricted Payment, if other than cash, as determined by the Board of Directors, whose determination shall be conclusive and evidenced by a Board Resolution), (1) no Default or Event of Default shall have occurred and be continuing, (2) the Company could incur $1.00 of additional Indebtedness (other than Permitted Indebtedness) under the provisions of Section 1007 and (3) the aggregate amount of all Restricted Payments declared -74- 82 or made after the Closing Date (including the proposed Restricted Payment) does not exceed the sum of: (i)(A) Consolidated EBITDA for the Restricted Payments Computation Period minus (B) 2 times Consolidated Interest Expense for the Restricted Payments Computation Period; (ii) the aggregate net proceeds, including the Fair Market Value of property other than cash (as determined by the Board of Directors, whose determination shall be conclusive, except that for any property whose Fair Market Value exceeds $10 million such Fair Market Value shall be confirmed by an independent appraisal obtained by the Company), received after the Closing Date by the Company from the issuance or sale (other than to any of its Subsidiaries) of shares of Capital Stock of the Company (other than Redeemable Capital Stock) or warrants, options or rights to purchase such shares of Capital Stock; (iii) the aggregate net proceeds, including the Fair Market Value of property other than cash (as determined by the Board of Directors, whose determination shall be conclusive, except that for any property whose Fair Market Value exceeds $10 million such Fair Market Value shall be confirmed by an independent appraisal obtained by the Company), received after the Closing Date by the Company from debt securities that have been converted into or exchanged for Capital Stock of the Company (other than Redeemable Capital Stock) to the extent such debt securities were originally sold for such net proceeds plus the aggregate cash received by the Company at the time of such conversion; and (iv) $100 million. Notwithstanding the foregoing limitation, (a) the Company may (i) pay dividends on its Capital Stock within sixty days of the declaration thereof if, on the declaration date, such dividends could have been paid in compliance with the foregoing limitation and (ii), acquire, redeem or retire Capital Stock in exchange for, or in connection with a substantially concurrent issuance of, Capital Stock of the Company (other than Redeemable Capital Stock) and (b) the term "Restricted Payments" shall not include any dividend on, or distribution in respect of, any shares of the Capital Stock of a Person that is acquired by the Company in a business combination accounted for as a pooling of interests in accordance with Accounting Principles Board Opinions No. 16 (or any successor thereto) ("APB 16") provided such dividend or distribution is declared and paid prior to the date of such acquisition and was not in contemplation of such acquisition within the requirements and interpretations of APB 16. SECTION 1009. LIMITATION ON TRANSACTIONS WITH AFFILIATES. -75- 83 (a) The Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly enter into or suffer to exist any transaction or series of related transactions (including, without limitation, the sale, purchase, exchange or lease of assets, property or services) with any Affiliate of the Company (other than a Wholly Owned Subsidiary of the Company) involving aggregate consideration in excess of $5.0 million unless (a) such transaction or series of transactions is on terms that are no less favorable to the Company or such Subsidiary, as the case may be, than would be available at the time of such transaction or series of transactions in a comparable arm's-length transaction with a Person that is not an Affiliate of the Company, (b) such transaction or series of transactions is in the best interests of the Company and (c) with respect to a transaction or series of transactions involving aggregate consideration in excess of $50.0 million, a majority of disinterested members of the Board of Directors determines that such transaction or series of transactions complies with clauses (a) and (b) above, as evidenced by a Board Resolution. (b) Notwithstanding the foregoing limitation, the Company and its Subsidiaries may enter into or suffer to exist the following: (i) any transaction pursuant to any contract in existence on the Closing Date; (ii) any Restricted Payment permitted to be made pursuant to the provisions of Section 1008; (iii) any transaction or series of transactions between the Company and one or more of its Subsidiaries or between two or more of its Subsidiaries (provided that no more than 5% of the Capital Stock in any such Subsidiary is owned, directly or indirectly (other than by direct or indirect ownership of Capital Stock in the Company), by any Affiliate of the Company other than a Subsidiary) and (iv) the payment of compensation (including amounts paid pursuant to employee benefit plans) for the personal services of officers, directors and employees of the Company or any of its Subsidiaries. SECTION 1010. LIMITATION ON SENIOR SUBORDINATED INDEBTEDNESS. The Company will not incur, create, issue, assume, guarantee or otherwise become liable for any Indebtedness that is subordinate or junior in right of payment to any Senior Indebtedness and senior in right of payment to the Securities. SECTION 1011. CHANGE OF CONTROL. Upon the occurrence of a Change of Control, the Company will be required to make an offer (a "Change of Control Offer") to purchase all Outstanding Securities at a purchase price equal to 101% of their principal amount plus accrued and unpaid interest, if any, to the date of purchase. Within 30 days following the date upon which the Change of Control occurred, the Company must send, by first class mail, a notice to each Holder, with a copy to the Trustee, which notice shall govern the terms of the Change of Control Offer. Such notice will state, among other things, the purchase date, which must be no earlier than 30 days nor later than 60 days from the date such notice is mailed, other than as may be required by law (the "Change of Control -76- 84 Payment Date"). The Change of Control Offer is required to remain open for at least 20 Business Days and until the close of business on the Change of Control Payment Date. In the event that the Company makes a Change of Control Offer to purchase the Securities pursuant to this Section 1011, the Company will comply with any applicable securities laws and regulations, including any applicable requirements of Section 14(e) of, and Rule 14e-1 under, the Exchange Act. SECTION 1012. PROVISION OF FINANCIAL INFORMATION. Whether or not the Company is subject to the reporting requirements of the Exchange Act, or any successor provision thereto, the Company will furnish without cost to each Holder of Securities and file with the Commission and the Trustee (i) within 135 days after the end of each fiscal year of the Company (x) audited year-end consolidated financial statements (including a balance sheet, income statement and statement of cash flows) prepared in accordance with GAAP and (y) the information described in Item 303 of Regulation S-K under the Securities Act, with respect to such period, and (ii) within 60 days after the end of each of the first three fiscal quarters of each fiscal year of the Company, (x) unaudited quarterly consolidated financial statements (including a balance sheet, income statement and statement of cash flows) prepared in accordance with GAAP and (y) the information described in Item 303 of Regulation S-K under the Securities Act, with respect to such period. In addition, the Company will furnish to any prospective purchaser of Securities or beneficial owner of Securities in connection with any sale thereof the information required by Rule 144A(d)(4) under the Securities Act, until such time as the Company has either exchanged the Securities for the Exchange Securities or until such time as the Holders thereof have disposed of such Securities pursuant to a Shelf Registration Statement. SECTION 1013. STATEMENT AS TO COMPLIANCE. The Company shall deliver to the Trustee, within 30 days after the end of each fiscal year of the Company ending after the date hereof (which on the date hereof ends on the Thursday closest to December 31), a brief certificate of its principal executive officer, principal financial officer or principal accounting officer stating that a review of the Company's activities during such year and of performance under this Indenture has been made under his supervision and that, to such officer's knowledge, the Company is in compliance with all covenants and conditions to be complied with by it under this Indenture. For purposes of this Section 1013, such compliance shall be determined without regard to any period of grace or requirement of notice under this Indenture. When a Default has occurred and is continuing or if the Trustee, any Holder or the trustee for or the holder of any other evidence of Indebtedness of the Company or any Subsidiary gives any notice or takes any other action with respect to a claimed default, the Company shall deliver to the Trustee an Officers' Certificate specifying such Default, notice or other action within 10 Business Days of its occurrence. -77- 85 SECTION 1014. WAIVER OF CERTAIN COVENANTS. The Company may omit in any particular instance to comply with any covenant or condition set forth in Sections 1005 to 1012, if before the time for such compliance, the Holders of a majority in aggregate principal amount of the Securities at the time Outstanding shall, by Act of such Holders, waive such compliance in such instance with such covenant or condition, but no such waiver shall extend to or affect such covenant or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Company and the duties of the Trustee in respect of any such covenant or condition shall remain in full force and effect. SECTION 1015. FALL-AWAY OF CERTAIN COVENANTS. In the event that the Securities attain Investment Grade Status and no Event of Default or Default shall have occurred and be continuing (the occurrence of the foregoing events, being collectively referred to as the "Fall-away Event"), the covenants described under Sections 801(c) and 1007 to 1010 will no longer be applicable to the Company and its Subsidiaries; provided that the Company delivers to the Trustee (i) an Officers' Certificate certifying that the Fall-away Event shall have occurred and (ii) a letter from Moody's or S&P, as the case may be, dated not more than three days prior to the date such covenants are to become subject to this Section 1015, verifying the Investment Grade Status of the Securities. As a result, upon the occurrence of the Fall-away Event the Securities will be entitled to substantially no covenant protection. ARTICLE ELEVEN REDEMPTION OF SECURITIES SECTION 1101. RIGHT OF REDEMPTION. The Securities may be redeemed at the election of the Company, as a whole or in part and from time to time, at any time on or after October 1, 2002 subject to the conditions and at the Redemption Prices specified in the form of Security in Sections 203, 204 and 205 hereto, together with accrued and unpaid interest to the Redemption Date. SECTION 1102. APPLICABILITY OF ARTICLE. Redemption of Securities at the election of the Company or otherwise, as permitted or required by any provision of this Indenture, shall be made in accordance with such provision and this Article. -78- 86 SECTION 1103. ELECTION TO REDEEM; NOTICE TO TRUSTEE. The election of the Company to redeem the Securities pursuant to Section 1101 shall be evidenced by a Board Resolution. In case of any redemption at the election of the Company, the Company shall, at least 60 days prior to the Redemption Date fixed by it (unless a shorter notice period shall be satisfactory to the Trustee), notify the Trustee of such Redemption Date and of the principal amount of Securities to be redeemed. Such notice shall be accompanied by an Officers' Certificate and an Opinion of Counsel from the Company to the effect that such redemption shall comply with the conditions herein. SECTION 1104. SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED. If less than all the Securities are to be redeemed, the particular Securities to be redeemed shall be selected not more than 60 days prior to the Redemption Date by the Trustee, from the Outstanding Securities not previously called for redemption, by such method as the Trustee shall deem fair and appropriate and which may provide for the selection for redemption of portions of the principal of Securities; provided, however, that no such partial redemption shall reduce the portion of the principal amount of a Security not redeemed to less than $1,000. Securities and any portions of such Securities selected by the Trustees shall be in amounts of $1,000 or integral multiples thereof. The Trustee shall promptly notify the Company in writing of the Securities selected for redemption and, in the case of any Securities selected for partial redemption, the principal amount thereof to be redeemed. For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to redemption of Securities shall relate, in the case of any Security redeemed or to be redeemed only in part, to the portion of the principal amount of such Security which has been or is to be redeemed. SECTION 1105. NOTICE OF REDEMPTION. Notice of redemption shall be given by first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption Date, to each Holder of Securities to be redeemed, at his address appearing in the Security Register. All notices of redemption shall state (including CUSIP number, if any): (a) the principal amount of each Security held by such Holder to be redeemed; (b) the Redemption Date; (c) the Redemption Price and the amount of accrued interest, if any, to be paid; -79- 87 (d) that on the Redemption Date the Redemption Price will become due and payable upon each such Security, that such Securities must be surrendered to the Paying Agent to collect the Redemption Price plus accrued interest, if any, and that interest thereon shall cease to accrue on and after said date; (e) the CUSIP number; (f) if fewer than all of the Outstanding Securities are to be redeemed, then the identification and principal amounts at Maturity of the particular Securities (or portions thereof) to be redeemed as well as the aggregate principal amount of Securities to be redeemed and the aggregate principal amount of Securities to be outstanding after such partial redemption; (g) if any Security is being redeemed in part, the portion of the principal amount of such Security to be redeemed and that, after the Redemption Date, and upon surrender of such Security, a new Security or Securities in the aggregate principal amount equal to the unredeemed portion thereof will be issued; and (h) the name and address of the Paying Agent and the place or places where such Securities are to be surrendered for payment of the Redemption Price. Notice of redemption of Securities to be redeemed at the election of the Company shall be given by the Company or, at its request, by the Trustee in the name and at the expense of the Company. SECTION 1106. DEPOSIT OF REDEMPTION PRICE. On or prior to any Redemption Date, the Company shall deposit or cause to be deposited with the Trustee or with a Paying Agent, prior to 11:00 a.m., New York City time (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 1003), an amount of money in same day funds (or New York Clearing House funds if such deposit is made prior to the applicable Redemption Date) sufficient to pay the Redemption Price of, and (except if the Redemption Date shall be an Interest Payment Date) accrued interest on, all the Securities which are to be redeemed on that date. SECTION 1107. SECURITIES PAYABLE ON REDEMPTION DATE. Once notice of redemption is mailed in accordance with Section 1105, such notice of redemption shall be irrevocable and Securities called for redemption become due and payable on the Redemption Date and at the Redemption Price plus accrued interest as of such date, if any. Upon surrender to the Trustee or Paying Agent, such Securities called for redemption shall be paid at the Redemption Price plus accrued interest thereon to the Redemption Date, but installments of interest, the maturity of which is on or prior to the Redemption Date, shall be payable to -80- 88 Holders of record at the close of business on the relevant record dates referred to in the Securities. Interest shall accrue on or after the Redemption Date and shall be payable only if the Company defaults in payment of the Redemption Price. If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal thereof (and premium, if any, thereon) shall, until paid, bear interest from the Redemption Date at the rate borne by such Security. SECTION 1108. SECURITIES PURCHASED IN PART. Any Security that is to be purchased only in part shall be surrendered to the Paying Agent at the office of the Paying Agent or to the office or agency referred to in Section 1002 (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or such Holder's attorney duly authorized in writing) and the Company shall execute and the Trustee shall authenticate and deliver to the Holder of such Security, without service charge, a replacement Security or Securities, of any authorized denomination as requested by such Holder in an aggregate principal amount equal to, and in exchange for, the principal amount of the Security so surrendered that is not purchased. ARTICLE TWELVE SUBORDINATION OF SECURITIES SECTION 1201. SECURITIES SUBORDINATE TO SENIOR INDEBTEDNESS. The Company covenants and agrees, and each Holder of a Security, by his acceptance thereof, likewise covenants and agrees, that, to the extent and in the manner hereinafter set forth in this Article, the Obligations in respect of the Securities (the "Subordinated Obligations") are hereby expressly made subordinate and postponed to and subject in right of payment as provided in this Article to the prior payment in full in cash or Cash Equivalents of all Senior Indebtedness. All provisions of this Article Twelve shall be subject to Section 1214. This Article 12 shall constitute a continuing offer to all Persons who, in reliance upon such Article, become holders of, or continue to hold, Senior Indebtedness, and such provisions are made for the benefit of the holders of Senior Indebtedness, and such holders are made obligee hereunder and they or each of them may enforce such provisions. SECTION 1202. PAYMENT OVER OF PROCEEDS UPON DISSOLUTION, ETC. In the event of (a) any insolvency or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or other similar case or proceeding in connection therewith, relative to the Company or to its assets, whether voluntary or involuntary from any source, or (b) any -81- 89 liquidation, dissolution or other winding-up of the Company, whether voluntary or involuntary and whether or not involving insolvency or bankruptcy, or (c) any assignment for the benefit of creditors or any other marshalling of assets or liabilities of the Company, then and in any such event: (1) the holders of Senior Indebtedness shall receive payment in full in cash or Cash Equivalents of all amounts due on or in respect of all Senior Indebtedness, or provision shall be made for such payment in full in cash or Cash Equivalents to the satisfaction of the holders of Senior Indebtedness, before the Holders of the Securities are entitled to receive any payment or distribution of any kind or character from any source (other than a payment or distribution in the form of equity securities or subordinated securities of the Company or any successor obligor with respect to the Senior Indebtedness provided for by a plan of reorganization or readjustment that, in the case of any such subordinated securities, are subordinate in right of payment to all Senior Indebtedness that may at the time be outstanding to at least the same extent as the Securities are so subordinated as provided in this Article (such equity securities or subordinated securities hereinafter being "Permitted Junior Securities")) on account of the Subordinated Obligations or on account of the purchase or redemption or other acquisition of Securities; and (2) any payment or distribution of assets of the Company of any kind or character from any source, whether in cash, property or securities (other than a payment or distribution in the form of Permitted Junior Securities), including by way of set-off or enforcement of any guarantee or otherwise, which the Trustee or the Holders would be entitled to receive but for the provisions of this Article shall be paid by the liquidating trustee or agent or other person making such payment or distribution, whether a trustee in bankruptcy, a receiver or liquidating trustee or otherwise, directly to the holders of Senior Indebtedness or their authorized representative or representatives or to the trustee or trustees under any indenture under which any instruments evidencing any of such Senior Indebtedness may have been issued, ratably according to the aggregate amounts remaining unpaid on account of the Senior Indebtedness held or represented by each, to the extent necessary to make payment in full in cash or Cash Equivalents of all Senior Indebtedness of the Company remaining unpaid, after giving effect to any concurrent payment or distribution, or provision therefor to the satisfaction of the holders of the Senior Indebtedness, to or for the holders of such Senior Indebtedness; and (3) any Taxes that have been withheld or deducted from any payment or distribution in respect of the Securities, or any Taxes that ought to have been withheld or deducted from any such payment or distribution that have been remitted to the relevant taxing authority, shall not be considered to be an amount that a Holder or the Trustee is entitled to receive for the purposes of Section 1202(2). -82- 90 The consolidation of the Company with, or the merger of the Company into, another Person or the liquidation or dissolution of the Company following the conveyance, transfer, lease or other disposal of its properties and assets substantially as an entirety to another Person upon the terms and conditions set forth in Article Eight shall not be deemed a dissolution, winding-up, liquidation, reorganization, assignment for the benefit of creditors or marshalling of assets and liabilities of the Company for the purposes of this Section if the Person formed by such consolidation or into which the Company is merged or the Person which acquires such assets substantially as an entirety, as the case may be, shall, as a part of such consolidation, merger, conveyance, transfer, lease or disposal, comply with the conditions set forth in Article Eight. SECTION 1203 SUSPENSION OF PAYMENT WHEN SENIOR INDEBTEDNESS IN DEFAULT. (a) Unless Section 1202 shall be applicable, upon (1) the occurrence of a Payment Default and (2) receipt by the Trustee from the Company or a holder of Senior Indebtedness of written notice of such occurrence, no payment (other than any payments made pursuant to the provisions contained in Sections 402 and 403 from monies or U.S. Government Obligations previously deposited with the Trustee) or distribution of any assets of the Company of any kind or character from any source, whether in cash, property or securities (other than Permitted Junior Securities), shall be made by the Company including by way of set-off or enforcement of any guarantee or otherwise, on account of the Subordinated Obligations or on account of the purchase or redemption, deposit for defeasance or other acquisition of Securities unless and until such Payment Default shall have been cured or waived in writing or shall have ceased to exist or such Senior Indebtedness shall have been discharged or paid in full in cash or Cash Equivalents, after which the Company shall resume making any and all required payments in respect of the Securities, including any missed payments. (b) Unless Section 1202 shall be applicable, upon (1) the occurrence of a Non-payment Default and (2) receipt by the Trustee from an authorized representative of the holders of Designated Senior Indebtedness of written notice of such occurrence, then no payment (other than any payments made pursuant to the provisions contained in Sections 402 and 403 from monies or U.S. Government Obligations previously deposited with the Trustee) or distribution of any assets of the Company of any kind or character from any source, whether in cash, property or securities (other than Permitted Junior Securities), shall be made by the Company including by way of set-off or enforcement of any guarantee or otherwise, on account of the Subordinated Obligations or on account of the purchase or redemption, deposit for defeasance or other acquisition of Securities for a period ("Payment Blockage Period") commencing on the date of receipt by the Trustee of such notice from an authorized representative of the holders of Designated Senior Indebtedness or the Company at the direction of the such representative unless and until (subject to any blockage of payments that may then be in effect under subsection (a) of this Section) (w) more than 179 days shall have elapsed since receipt of such written notice by the Trustee, (x) such Nonpayment Default shall have been cured or waived in writing or shall have ceased to exist or such Designated Senior Indebtedness is discharged or shall have been paid in full in cash or Cash Equivalents, (y) -83- 91 such Designated Senior Indebtedness has been discharged or paid in full in cash or Cash Equivalents or (z) such Payment Blockage Period shall have been terminated by written notice to the Trustee from an authorized representative of the holders of Designated Senior Indebtedness initiating such Payment Blockage Period or from the holders of at least a majority in principal amount of such Designated Senior Indebtedness ), after which, in the case of clause (w), (x), (y) or (z), the Company shall resume making any and all required payments in respect of the Securities, including any missed payments. Notwithstanding any other provision of this Indenture, in no event shall a Payment Blockage Period extend beyond 179 days from the date of the receipt by the Trustee of the notice referred to in clause (2) above (the "Initial Blockage Period"). No more than one Payment Blockage Period may be commenced during any period of 365 consecutive days calculated from the day on which the Payment Blockage Period began. Notwithstanding any other provision of this Indenture, no event of default with respect to Designated Senior Indebtedness which existed or was continuing on the date of the commencement of any Payment Blockage Period initiated by an authorized representative of the holders of Designated Senior Indebtedness for such Designated Senior Indebtedness shall be, or be made, the basis for the commencement of a second Payment Blockage Period for such Designated Senior Indebtedness, whether or not within the Initial Blockage Period, unless such event of default shall have been cured or waived for a period of not less than 90 consecutive days. (c) In the event that, notwithstanding the foregoing provisions of this Section, the Company shall make any payment to the Trustee (which is not paid over to Holders of Securities) prohibited by the foregoing provisions of this Section, then and in such event such payment shall be paid over to the authorized representatives of such Designated Senior Indebtedness initiating the Payment Blockage Period, to be held in trust for distribution to the holders of Senior Indebtedness or, to the extent amounts are not then due in respect of Senior Indebtedness, promptly returned to the Company, or otherwise as a court of competent jurisdiction shall direct. SECTION 1204. PAYMENT PERMITTED IF NO DEFAULT. Nothing contained in this Article or elsewhere in this Indenture or in any of the Securities shall prevent the Company, at any time except during the pendency of any event referred to in clause (a), (b) or (c) of Section 1202 or under the conditions described in Section 1203, from making payments at any time of principal of (and premium, if any) or interest on the Securities. SECTION 1205. SUBROGATION TO RIGHTS OF HOLDERS OF SENIOR INDEBTEDNESS. Subject to the payment in full of all Senior Indebtedness in cash or Cash Equivalents, the Holders of the Securities shall be subrogated (equally and ratably with the holders of all indebtedness of the Company which by its express terms is subordinated and postponed to Senior Indebtedness to the same extent as the Securities are subordinated and postponed and which is entitled to like rights of subrogation) to the rights of the holders of such Senior Indebtedness to the extent that payment of Senior Indebtedness has been made under Section 1202 of this Indenture from amounts otherwise payable to Holders of the Securities, to receive payments and distributions -84- 92 of assets of the Company of any kind or character from any source, whether in cash, property or securities applicable to the Senior Indebtedness until the Subordinated Obligations shall be paid in full. For purposes of such subrogation, no payments or distributions to the holders of Senior Indebtedness of any cash, property or securities to which the Holders of the Securities or the Trustee would be entitled except for the provisions of this Article, and no payments over pursuant to the provisions of this Article to the holders of Senior Indebtedness by Holders of the Securities or the Trustee, shall, as between the Company, its creditors other than holders of Senior Indebtedness, and the Holders of the Securities, be or be deemed to be a payment or distribution by the Company to or on account of the Senior Indebtedness. SECTION 1206. PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS. The provisions of this Article are and are intended solely for the purpose of defining the relative rights of the Holders of the Securities on the one hand and the holders of Senior Indebtedness on the other hand. Nothing contained in this Article or elsewhere in this Indenture or in the Securities is intended to or shall: (a) impair, as between the Company and the Holders of the Securities, the obligation of the Company, which is absolute and unconditional, to pay to the Holders of the Securities the principal of (and premium, if any) and interest on the Securities as and when the same shall become due and payable in accordance with their terms; or (b) affect the relative rights against the Company of the Holders of the Securities and creditors of the Company other than the holders of Senior Indebtedness; or (c) prevent the Trustee or the Holder of any Security from exercising all remedies otherwise permitted by applicable law upon default under this Indenture including filing and voting claims in any proceeding under any Bankruptcy Law, subject to the rights, if any, under this Article of the holders of Senior Indebtedness in respect of cash, property or securities of the Company received upon the exercise of any such remedy. For greater certainty, if the Trustee or the Holder of any Security shall have received any payment or distribution of assets of the Company of any kind or character from any source, whether in cash, property or securities, to which neither the Trustee nor the Holder is, at the time of such receipt, entitled pursuant to the terms of this Indenture read without reference to this Article Twelve, such payment or distribution shall not be subject to Section 1202 and shall be promptly remitted by the Trustee or the Holder of the Security, as the case may be, to the Company. -85- 93 SECTION 1207. TRUSTEE TO EFFECTUATE SUBORDINATION. Each Holder of a Security by his acceptance thereof authorizes and directs the Trustee on his behalf to take such action as may be necessary or appropriate to acknowledge or effectuate the subordination provided in this Article and appoints the Trustee his attorney-in-fact for any and all such purposes. Upon the written direction of the Company and upon being furnished with an Officers' Certificate stating that one or more named persons are holders of Senior Indebtedness and specifying the amount and nature of such Senior Indebtedness, the Trustee, from time to time, for and on behalf of all present and future Holders of the Securities, shall execute and deliver deeds of subordination in favor of the person or persons named or referred to in such Officers' Certificate providing that such person or persons and his or their successors or assigns are entitled to all the rights and benefits of this Article as the holder or holders of Senior Indebtedness. An executed counterpart of each such deed shall be delivered by the Trustee to the Company and another such counterpart shall be retained by the Trustee. Nothing contained in this Section 1207 shall impair the rights of any holders of Senior Indebtedness in whose favor such a deed of subordination has not been so executed and delivered. SECTION 1208. NO WAIVER OF SUBORDINATION PROVISIONS. (a) No right of any present or future holder of any Senior Indebtedness to enforce subordination as herein provided shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the Company or the Trustee or by any act or failure to act by any such holder, or by any non-compliance by the Company or the Trustee with the terms, provisions and covenants of this Indenture, regardless of any knowledge thereof any such holder may have or be otherwise charged with. (b) Without in any way limiting the generality of subsection (a) of this Section, the holders of Senior Indebtedness may, at any time and from time to time, without the consent of or notice to the Trustee or the Holders of the Securities, without incurring responsibility to the Holders of the Securities and without impairing or releasing the subordination provided in this Article or the obligations hereunder of the Holders of the Securities to the holders of Senior Indebtedness, do any one or more of the following: (1) change the manner, place or terms of payment or extend the time of payment of, or renew or alter, the terms of Senior Indebtedness or the terms of any instrument evidencing the same or any agreement under which Senior Indebtedness is outstanding (including any increase in the aggregate principal amount of any indebtedness thereunder, it being understood that any such additional indebtedness shall not constitute Senior Indebtedness to the extent incurred in violation of Section 1007 of this Indenture); (2) sell, exchange, release or otherwise deal with any property pledged, mortgaged or otherwise securing Senior Indebtedness; (3) release any Person liable in any manner for the collection of Senior Indebtedness; and (4) exercise or refrain from exercising any rights against the Company and/or any other Person. -86- 94 (c) If the Trustee on behalf of the Holders or any Holders should fail to file a proof of claim in any bankruptcy, insolvency, receivership or similar proceeding relating to the Company at least 30 days before the expiration of the time to file such claim or claims, each holder of Senior Indebtedness (or its representative) is hereby authorized to file an appropriate claim for and on behalf of all or any of the Holders. SECTION 1209. NOTICE TO TRUSTEE. (a) The Company shall give prompt written notice to the Trustee of any fact known to it which would prohibit the making of any payment or distribution to or by the Trustee in respect of the Securities. Notwithstanding the provisions of this Article or any other provision of this Indenture, the Trustee shall not be charged with knowledge of the existence of any facts which would prohibit the making of any payment to or by the Trustee in respect of the Securities, unless and until the Trustee shall have received written notice thereof from the Company and an authorized representative for the holders of Senior Indebtedness or any trustee, fiduciary or agent therefor; and, prior to the receipt of any such written notice, the Trustee, subject to the provisions of Section 601, shall be entitled in all respects to assume that no such facts exist; provided, however, that, if the Trustee shall not have received the notice provided for in this Section or Section 1203 hereof at least three Business Days prior to the date on which by the terms of this Indenture any money may become payable for any purpose (including the payment of the principal of (and premium, if any) or interest on or any amounts payable in connection with any Security), then, anything herein contained to the contrary notwithstanding, the Trustee shall have full power and authority to receive such money and to apply the same to the purpose for which such money was received and shall not be affected with respect to such action taken by any notice to the contrary which may be received by it on or after such date. (b) Subject to the provisions of Trust Indenture Act Sections 315(a) through (d), the Trustee shall be entitled to rely on any written notice delivered to it from time to time by an authorized representative for the holders of Senior Indebtedness for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the holders of the Senior Indebtedness and other indebtedness of the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article Twelve. In the event that the Trustee determines in good faith that further evidence is required with respect to the right of any Person as a holder of Senior Indebtedness to participate in any payment or distribution pursuant to this Article, the Trustee may request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and any other facts pertinent to the rights of such Person under this Article and, if such evidence is not furnished, the Trustee may defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment. -87- 95 SECTION 1210. RELIANCE ON BANKRUPTCY ORDER OR CERTIFICATE OF LIQUIDATING AGENT BANK. Upon any payment or distribution of assets of the Company referred to in this Article, the Trustee, subject to the provisions of Trust Indenture Act Sections 315(a) through (d), and the Holders of the Securities shall be entitled to rely on any Bankruptcy Order entered by any court of competent jurisdiction, or a certificate of (i) the trustee in bankruptcy as to matters over which it has authority, or (ii) assignee for the benefit of all creditors as to matters over which it has authority, delivered to the Trustee or to the Holders of Securities from time to time by any Person, for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the holders of Senior Indebtedness and other indebtedness of the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article. SECTION 1211. RIGHTS OF TRUSTEE AS A HOLDER OF SENIOR INDEBTEDNESS; PRESERVATION OF TRUSTEE'S RIGHTS. Subject to the terms of this Article, the Trustee in its individual capacity shall be entitled to all the rights set forth in this Article with respect to any Senior Indebtedness which may at any time be held by it, to the same extent as any other holder of Senior Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of its rights as such holder. Nothing in this Article shall subordinate to Senior Indebtedness the claims of, or payments to, the Trustee under or pursuant to Section 606. SECTION 1212. ARTICLE APPLICABLE TO PAYING AGENTS. In case at any time any Paying Agent other than the Trustee shall have been appointed by the Company and be then acting hereunder, the term "Trustee" as used in this Article shall in such case (unless the context otherwise requires) be construed as extending to and including such Paying Agent within its meaning as fully for all intents and purposes as if such Paying Agent were named in this Article in addition to or in place of the Trustee; provided, however, that this Section 1212 shall not apply to the Company or any Affiliate of the Company if any of them or any such Affiliate acts as Paying Agent. SECTION 1213. NO SUSPENSION OF REMEDIES. Nothing contained in this Article shall limit the right of the Trustee or the Holders of Securities to take any action to accelerate the Maturity of the Securities pursuant to Article Five or to pursue any rights or remedies hereunder or under applicable law; provided, however, that, so long as any Indebtedness permitted by this Indenture to be incurred pursuant to the Credit Facility shall be outstanding (including letters of credit and bankers' acceptances), upon the occurrence and during the continuance of an Event of Default under this Indenture, neither the Trustee nor any Holder shall be entitled to accelerate all or any of the Subordinated Obligations -88- 96 until the earlier to occur of the fifth Business Day following receipt by the Company and by an authorized representative of the holders of Designated Senior Indebtedness of a written declaration of acceleration as provided in Section 502 and the date of acceleration of any such Indebtedness under the Credit Facility. SECTION 1214. TRUST MONEYS NOT SUBORDINATED. Notwithstanding anything contained herein to the contrary, payments from cash or the proceeds of U.S. Government Obligations held in trust under Article Four of this Indenture by the Trustee (or such other trustee who shall have satisfied the requirements of Section 608 and who shall agree to comply with the provisions of Article Four applicable to it) and which were deposited in accordance with the terms of Article Four of this Indenture and not in violation of Section 1203 of this Indenture for the payment of principal of (and premium, if any) and interest on the Securities shall not be subordinated to the prior payment of any Senior Indebtedness or subject to the restrictions set forth in this Article Twelve and none of the Holders shall be obligated to pay over any such amount to the Company or any holder of Senior Indebtedness or any other creditor of the Company. SECTION 1215. DUTIES OWED BY TRUSTEE TO HOLDERS OF SENIOR INDEBTEDNESS. The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Indebtedness and shall not be liable for any such holders if it shall mistakenly (in the absence of gross negligence or willful misconduct) pay over or distribute to Holders of Securities or to the Company or to any other Person cash, property or securities which any holders of Senior Indebtedness shall be entitled by virtue of this Article or otherwise. The Trustee shall not be charged with knowledge of the existence of Senior Indebtedness or of any facts that would prohibit any payment hereunder unless a Trust Officer of the Trustee shall have received notice to that effect at the address of the Trustee set forth in Section 106. With respect to the holders of Senior Indebtedness, the Trustee undertakes to perform or to observe only such of its covenants or obligations as are specifically set forth in this Article and no implied covenants or obligations with respect to holders of Senior Indebtedness shall be read into this Indenture against the Trustee. * * * -89- 97 This Indenture may be signed in any number of counterparts with the same effect as if the signatures to each counterpart were upon a single instrument, and all such counterparts together shall be deemed an original of this Indenture. IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, and their respective corporate seals to be hereunto affixed and attested, all as of the day and year first above written. REGAL CINEMAS, INC. By /s/ MICHAEL L. CAMPBELL ------------------------------- Title: Chief Executive Officer By /s/ LEWIS FRAZER III ------------------------------- Title: Chief Financial Officer Attest: /s/ SUSAN SEAGRAVES ----------------------------- Title: Vice President and Corporate Controller IBJ SCHRODER BANK & TRUST COMPANY By /s/ BARBARA MCCLUSKEY ------------------------------- Title: Vice President Attest: /s/ MAX VOLMAR ----------------------------- Title: Assistant Secretary -90- 98 EXHIBIT A-1 FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER FROM RESTRICTED GLOBAL SECURITY TO REGULATION S GLOBAL SECURITY IBJ Schroder Bank & Trust Company One State Street New York, New York 10004 Re: 8 1/2% Senior Subordinated Notes due 2007 of Regal Cinemas, Inc. Reference is hereby made to the Indenture, dated as of September 24, 1997 (the "Indenture"), between Regal Cinemas, Inc., as issuer (the "Company"), and IBJ Schroder Bank & Trust Company, as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture. This letter relates to $_________ principal amount of Securities which are evidenced by the Restricted Global Security (CUSIP No. 758754AA3) and held with the Depositary in the name of Cede & Co. (the "Transferor"). The Transferor has requested a transfer of such beneficial interest in the Securities to a Person who will take delivery thereof in the form of an equal principal amount of Securities evidenced by the Regulation S Global Security (CUSIP No. U75844AA5). In connection with such request and in respect of such Securities, the Transferor hereby certifies that such transfer has been effected in compliance with the transfer restrictions applicable to the Global Securities and pursuant to and in accordance with Rule 903, Rule 904 or Rule 144 under the United States Securities Act of 1933, as amended (the "Securities Act"), and accordingly the Transferor hereby further certifies that: (A) if the transfer has been effected pursuant to Rule 903 or Rule 904: (1) the offer of the Securities was not made to a person in the United States; (2) either: (a) at the time the buy order was originated, the transferee was outside the United States or the Transferor and any person acting on its behalf reasonably believed and believes that the transferee was outside the United States; or 99 (b) the transaction was executed in, on or through the facilities of a designated offshore securities market and neither the Transferor nor any person acting on its behalf knows that the transaction was prearranged with a buyer in the United States; (3) no directed selling efforts have been made in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S, as applicable; (4) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act; (5) if the transfer is being requested prior to November 4, 1997, upon completion of the transaction, the beneficial interest being transferred as described above is to be held with the Depositary through Euroclear or Cedel Bank or both (Common Code ____________); and (B) If the transfer has been effected pursuant to Rule 144, the Securities have been transferred in a transaction permitted by Rule 144 under the Securities Act. Upon giving effect to this request to exchange a beneficial interest in such Restricted Global Security for a beneficial interest in a Regulation S Global Security, the resulting beneficial interest shall be subject to the restrictions on transfer applicable to Regulation S Global Security pursuant to the Indenture and the Securities. This certificate and the statements contained herein are made for your benefit and the benefit of the Company. Terms used in this certificate and not otherwise defined in the Indenture have the meanings set forth in Regulation S under the Securities Act. [Insert Name of Transferor] By: Name: Title: Dated: ____________, ____ Signature Guarantee ________________________________ A-1-2 100 EXHIBIT A-2 FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER FROM REGULATION S GLOBAL SECURITY TO RESTRICTED GLOBAL SECURITY IBJ Schroder Bank & Trust Company One State Street New York, New York 10004 Re: 8 1/2% Senior Subordinated Notes due 2007 of Regal Cinemas, Inc. Reference is hereby made to the Indenture, dated as of September 24, 1997 (the "Indenture"), between Regal Cinemas, Inc., as issuer (the "Company"), and IBJ Schroder Bank & Trust Company, as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture. This letter relates to $____________ principal amount of the Securities which are evidenced by the Regulation S Global Security (CUSIP No. U75844AA5) and held with the Depositary in the name of Cede & Co. (the "Transferor"). The Transferor has requested a transfer of such beneficial interest in the Securities to a Person who will take delivery thereof in the form of an equal principal amount of Securities evidenced by the Restricted Global Security (CUSIP No. 758754AA3), to be held with the Depositary. In connection with such request and in respect of such Securities, the Transferor hereby certifies that such transfer is being effected pursuant to and in accordance with Rule 144A under the United States Securities Act of 1933, as amended (the "Securities Act"), and, accordingly, the Transferor hereby further certifies that the Securities are being transferred to a Person that the Transferor reasonably believes is purchasing the Securities for its own account, or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a "qualified institutional buyer" within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A and such Securities are being transferred in compliance with any applicable blue sky securities laws of any state of the United States. Upon giving effect to this request to exchange a beneficial interest in Regulation S Global Securities for a beneficial interest in the Restricted Global Security, the resulting beneficial interest shall be subject to the restrictions on transfer applicable to the U.S Global Securities pursuant to the Indenture and the Securities Act. 101 This certificate and the statements contained herein are made for your benefit and the benefit of the Company. Terms used in this certificate and not otherwise defined in the Indenture have the meanings set forth in Regulation S under the Securities Act. [Insert Name of Transferor] By: Name: Title: Dated: ____________, ____ Signature Guarantee ________________________________ A-2-2 102 EXHIBIT A-3 FORM OF CERTIFICATE FOR TRANSFER OF U.S. PHYSICAL SECURITIES TO REGULATION S GLOBAL SECURITY OR RESTRICTED GLOBAL SECURITY IBJ Schroder Bank & Trust Company One State Street New York, New York 10004 Re: 8 1/2% Senior Subordinated Notes due 2007 of Regal Cinemas, Inc. Reference is hereby made to the Indenture, dated as of September 24, 1997 (the "Indenture"), between Regal Cinemas, Inc., as issuer (the "Company"), and IBJ Schroder Bank & Trust Company, as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture. This letter relates to $___________ principal amount of Securities which are evidenced by a definitive Physical Security (Certificate No. __________, CUSIP No. __________, in the name of _________________) (the "Transferor"). The Transferor has requested a transfer of such interest in the Securities to a Person that will take delivery thereof in the form of an equal principal amount of Securities evidenced by the [Restricted Global Security CUSIP No. 758754AA3] [Regulation S Global Security (CUSIP No. U75844AA5)]. In connection with such request and in respect of such Securities, the Transferor does hereby certify that: [if such request is made for transfer to the Regulation S Global Security: such transfer has been effected pursuant to and in accordance with Rule 903, Rule 904 or Rule 144 under the United States Securities Act of 1933, as amended (the "Securities Act") and accordingly the Transferor does hereby further certify that: (1) if the transfer has been effected pursuant to Rule 903 or Rule 904: (A) the offer of the Securities was not made to a person in the United States; (B) either: (i) at the time the buy order was originated, the transferee was outside the United States or the Transferor and any person acting on its behalf reasonably believed that the transferee was outside the United States, or 103 (ii) the transaction was executed in, on or through the facilities of a designated offshore securities market and neither the Transferor nor any person acting on its behalf knows that the transaction was prearranged with a buyer in the United States; (C) no directed selling efforts have been made in contravention of the requirements of Rule 903(b) or 904(b) of Regulation S, as applicable; [and] (D) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act; [and (E) if the transfer is being requested prior to November 4, 1997: Upon completion of the transaction, the beneficial interest being transferred as described above is to be held with the Depositary through Euroclear or Cedel Bank or both (Common Code __________);] or (2) if the transfer has been effected pursuant to Rule 144, the Securities have been transferred in a transaction permitted by Rule 144.] (3) if such request is made for transfer to the Restricted Global Security: Such transfer is being effected pursuant to and in accordance with Rule 144A under the Securities Act, and, accordingly, the Transferor hereby further certifies that the Securities are being transferred to a person that the Transferor reasonably believes is purchasing the Securities for its own account, or for one or more accounts with respect to which such person exercises sole investment discretion, and such person and each such account is a "qualified institutional buyer" within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A. This certificate and the statements contained herein are made for your benefit and the benefit of the Company. Terms used in this certificate and not otherwise defined in the Indenture have the meanings set forth in Regulation S under the Securities Act. A-3-2 104 Upon completion of the transaction, the beneficial interest being transferred as described above is to be held with the Depositary through Euroclear or Cedel Bank or both (Common Code_____). [Insert Name of Transferor] By: Name: Title: Dated: ____________, ____ Signature Guarantee ________________________________ A-3-3 105 EXHIBIT A-4 FORM OF CERTIFICATE FOR TRANSFER OR EXCHANGE AFTER TWO YEARS IBJ Schroder Bank & Trust Company One State Street New York, New York 10004 Re: 8 1/2% Senior Subordinated Notes due 2007 of Regal Cinemas, Inc. Reference is hereby made to the Indenture, dated as of September 24, 1997 (the "Indenture"), between Regal Cinemas, Inc., as issuer (the "Company"), and IBJ Schroder Bank & Trust Company, as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture. [For transfers: This letter relates to $125,000,000 principal amount of Securities which are evidenced by a [Restricted Global Security (CUSIP No. 758754AA3) and held with the Depositary in the name of Cede & Co.] [a U.S. Physical Security (CUSIP No. ________________) registered in the name of _________________] [and held for the benefit of _________________] (the "Beneficial Owner"). The Beneficial Owner has requested that its beneficial interest in such Securities be transferred to a Person that will take delivery thereof in the form of an equal principal amount of Securities evidenced by the Regulation S Global Security (CUSIP No. U75844AA5). In connection with such request and in respect of such Securities, the Beneficial Owner does hereby certify that upon such transfer, (a) a period of at least two years will have elapsed since September 24, 1997, (b) the Beneficial Owner during the three months preceding the date of such transfer was not an "affiliate" of the Company (as defined in Rule 144 under the Securities Act), and it was not acting on behalf of such an affiliate and (c) such Person to whom such transfer is being made is not an "affiliate" of the Company.] [For exchanges: This letter relates to $125,000,000 principal amount of Securities that are evidenced by a [Restricted Global Security (CUSIP No. 758754AA3) and held with the Depositary in the name of [ ] [and held for the benefit of ] ] (the "Beneficial Owner"). The Beneficial Owner has requested that its beneficial interest in such Securities be exchanged for a beneficial interest in an equal principal amount of Securities evidenced by the Regulation S Global Security (CUSIP No. U75844AA5). 106 In connection with such request and in respect of such Securities, the Beneficial Owner does hereby certify that [it is located and acquired such securities outside the United States (if the Restricted Period has ended) and that such transfer is being made in accordance with Rule 903 or 904 of Regulation S promulgated under the U.S. Securities Act of 1933][, upon such exchange, (a) it will be the beneficial owner of such Securities, (b) a period of at least two years will have elapsed since September 24, 1997 and (c) the Beneficial Owner will not be, and during the three months preceding the date of such exchange will not have been, an "affiliate" of the Company (as defined in Rule 144 under the Securities Act), and it is not acting on behalf of such an affiliate.]] This certificate and the statements contained herein are made for your benefit and the benefit of the Company. Dated: [Insert Name of Beneficial Owner] By: Name: Title: A-4-2 EX-4.5 3 EXCHANGE AND REGISTRATION RIGHTS AGREEMENT 1 Exhibit 4.5 EXCHANGE AND REGISTRATION RIGHTS AGREEMENT EXCHANGE AND REGISTRATION RIGHTS AGREEMENT, dated as of September 24, 1997, among Regal Cinemas, Inc., a Tennessee corporation (the "Company"), Goldman, Sachs & Co. and Lehman Brothers Inc., as representatives of the purchasers (the "Purchasers") identified on Schedule I to the Note Purchase Agreement (as defined herein), of the 82% Senior Subordinated Notes due October 1, 2007 of the Company. The Company proposes to issue and sell to the Purchasers (as defined herein) upon the terms set forth in the Note Purchase Agreement the Securities (as defined herein). As an inducement to the Purchasers to enter into the Note Purchase Agreement and in satisfaction of a condition to the obligations of the Purchasers thereunder, the Company agrees with the Purchasers for the benefit of holders (as defined herein) from time to time of the Registrable Securities (as defined herein) as follows: 1 Certain Definitions. For purposes of this Exchange and Registration Rights Agreement, the following terms shall have the following respective meanings: "Base Interest" shall mean the interest, if any, that would otherwise accrue on the Securities under the terms thereof and the Indenture, without giving effect to the provisions of this Agreement. The term "broker-dealer" shall mean any broker or dealer registered with the Commission under the Exchange Act. "Closing" shall mean the date of the closing of the issuance and sale of the Securities pursuant to the Note Purchase Agreement. "Commission" shall mean the United States Securities and Exchange Commission, or any other federal agency at the time administering the Exchange Act or the Securities Act, whichever is the relevant statute for the particular purpose. "Effective Time," in the case of (i) an Exchange Registration, shall mean the time and date as of which the Commission declares the Exchange Registration Statement effective or as of which the Exchange Registration Statement otherwise becomes effective and (ii) a Shelf Registration, shall mean the time and date as of which the Commission declares the Shelf Registration Statement effective or as of which the Shelf Registration Statement otherwise becomes effective. 2 "Electing Holder" shall mean any holder of Registrable Securities that has returned a completed and signed Notice and Questionnaire to the Company in accordance with Section 3(d)(ii) or 3(d)(iii) hereof. "Exchange Act" shall mean the Securities Exchange Act of 1934, or any successor thereto, as the same shall be amended from time to time. "Exchange Offer" shall have the meaning assigned thereto in Section 2(a) hereof. "Exchange Registration" shall have the meaning assigned thereto in Section 3(c) hereof. "Exchange Registration Statement" shall have the meaning assigned thereto in Section 2(a) hereof. "Exchange Securities" shall have the meaning assigned thereto in Section 2(a) hereof. The term "holder" shall mean each of the Purchasers and other persons who acquire Registrable Securities from time to time (including any successors or assigns), in each case for so long as such person owns any Registrable Securities. "Indenture" shall mean the Indenture, dated as of September 24, 1997, between the Company and IBJ Schroder Bank & Trust Company, as Trustee, as the same shall be amended from time to time. "Note Purchase Agreement" shall mean the Purchase Agreement, dated as of September 19, 1997, between the Purchasers and the Company relating to the Securities. "Notice and Questionnaire" means a Notice of Registration Statement and Selling Securityholder Questionnaire substantially in the form of Exhibit A hereto. The term "person" shall mean a corporation, association, partnership, organization, business, individual, government or political subdivision thereof or governmental agency. "Registrable Securities" shall mean the Securities; provided, however, that a Security shall cease to be a Registrable Security when (i) in the circumstances contemplated by Section 2(a) hereof, the Security has been exchanged for an Exchange Security in an Exchange Offer as contemplated in Section 2(a) hereof (provided that any Exchange Security received by a broker-dealer in an Exchange Offer in exchange for a Registrable 2 3 Security that was not acquired by the broker-dealer directly from the Company will also be a Registrable Security through and including the earlier of the 90th day after the Exchange Offer is completed or such time as such broker-dealer no longer owns such Security); (ii) in the circumstances contemplated by Section 2(b) hereof, a Shelf Registration Statement registering such Security under the Securities Act has been declared or becomes effective and such Security has been sold or otherwise transferred by the holder thereof pursuant to and in a manner contemplated by such effective Shelf Registration Statement; (iii) such Security is sold pursuant to Rule 144 under circumstances in which any legend borne by such Security relating to restrictions on transferability thereof, under the Securities Act or otherwise, is removed by the Company or pursuant to the Indenture; (iv) such Security is eligible to be sold pursuant to paragraph (k) of Rule 144; or (v) such Security shall cease to be outstanding. "Registration Default" shall have the meaning assigned thereto in Section 2(c) hereof. "Registration Expenses" shall have the meaning assigned thereto in Section 4 hereof. "Resale Period" shall have the meaning assigned thereto in Section 2(a) hereof. "Restricted Holder" shall mean (i) a holder that is an affiliate of the Company within the meaning of Rule 405, (ii) a holder who acquires Exchange Securities outside the ordinary course of such holder's business, (iii) a holder who has arrangements or understandings with any person to participate in the Exchange Offer for the purpose of distributing Exchange Securities and (iv) a holder that is a broker-dealer, but only with respect to Exchange Securities received by such broker-dealer pursuant to an Exchange Offer in exchange for Registrable Securities acquired by the broker-dealer directly from the Company. "Rule 144," "Rule 405" and "Rule 415" shall mean, in each case, such rule promulgated under the Securities Act (or any successor provision), as the same shall be amended from time to time. "Securities" shall mean, collectively, the 82% Senior Subordinated Notes due October 1, 2007 of the Company to be issued and sold to the Purchasers, and securities issued in exchange therefor or in lieu thereof pursuant to the Indenture. "Securities Act" shall mean the Securities Act of 1933, or any successor thereto, as the same shall be amended from time to time. "Shelf Registration" shall have the meaning assigned thereto in Section 2(b) hereof. 3 4 "Shelf Registration Statement" shall have the meaning assigned thereto in Section 2(b) hereof. "Trust Indenture Act" shall mean the Trust Indenture Act of 1939, or any successor thereto, and the rules, regulations and forms promulgated thereunder, all as the same shall be amended from time to time. Unless the context otherwise requires, any reference herein to a "Section" or "clause" refers to a Section or clause, as the case may be, of this Exchange and Registration Rights Agreement, and the words "herein," "hereof" and "hereunder" and other words of similar import refer to this Exchange and Registration Rights Agreement as a whole and not to any particular Section or other subdivision. 2 Registration Under the Securities Act. (a) Except as set forth in Section 2(b) below, the Company agrees to file under the Securities Act, as soon as practicable, but no later than 60 days after the Closing, a registration statement relating to an offer to exchange (such registration statement, the "Exchange Registration Statement," and such offer, the "Exchange Offer") any and all of the Securities for a like aggregate principal amount at maturity of debt securities issued by the Company, which debt securities are substantially identical to the Securities, respectively (and are entitled to the benefits of a trust indenture which is substantially identical to the Indenture or is the Indenture and which has been qualified under the Trust Indenture Act), except that they have been registered pursuant to an effective registration statement under the Securities Act and do not contain provisions for the additional interest contemplated in Section 2(c) below (such new debt securities hereinafter called "Exchange Securities"). The Company agrees to use its best efforts to cause the Exchange Registration Statement to become effective under the Securities Act as soon as practicable, but no later than 150 days after the Closing. The Exchange Offer will be registered under the Securities Act on the appropriate form and will comply with all applicable tender offer rules and regulations under the Exchange Act. The Company further agrees to use its best efforts to commence and complete the Exchange Offer promptly, but no later than 45 days after such registration statement has become effective, hold the Exchange Offer open for at least 30 days and issue Exchange Securities for all Registrable Securities that have been properly tendered and not withdrawn on or prior to the expiration of the Exchange Offer. The Exchange Offer will be deemed to have been Acompleted" only if the debt securities received by holders other than Restricted Holders in the Exchange Offer for Registrable Securities are, upon receipt, transferable by each such holder without need for further compliance with Section 5 of the Securities Act and the Exchange Act (except for the requirement to deliver a prospectus included in the Exchange Registration Statement applicable to resales by any broker-dealer of Exchange Securities received by such broker-dealer pursuant to an Exchange Offer in exchange for Registrable Securities other than those acquired by the broker-dealer directly from the Company), and without material restrictions under the blue sky or securities laws of a substantial majority of the States of the United States of America. The Exchange Offer shall be deemed to have been completed upon the earlier to occur of (i) the Company having exchanged the Exchange Securities for all outstanding Registrable Securities pursuant to the Exchange Offer and (ii) the Company having exchanged, pursuant to the Exchange Offer, Exchange Securities for all Registrable Securities that have been properly tendered and not withdrawn before the expiration of the Exchange Offer, which shall be on a date that is at least 30 days following the commencement of the Exchange Offer. The Company agrees (x) to include in the Exchange Registration Statement a prospectus for use in connection with any resales of Exchange Securities by a broker-dealer, other than resales of Exchange Securities received by a broker-dealer pursuant to an Exchange Offer in exchange for Registrable Securities acquired by the broker-dealer directly from the Company, and (y) to keep such Exchange Registration Statement effective for a period (the "Resale Period") beginning when Exchange Securities are first issued in the Exchange Offer and ending upon the earlier of the expiration of the 90th day after the Exchange Offer has been completed or such time as such broker-dealers no longer own any Registrable Securities. With respect to such Exchange Registration Statement, each broker-dealer that holds 4 5 Exchange Securities received in an Exchange Offer in exchange for Registerable Securities not acquired by it directly from the Company shall have the benefit of the rights of indemnification and contribution set forth in Sections 6(a), (c), (d) and (e) hereof. (b) If prior to the time the Exchange Offer is completed existing Commission interpretations are changed such that the Securities received by holders other than Restricted Holders in the Exchange Offer for Registrable Securities are not or would not be, upon receipt, transferable by each such holder without need for further compliance with Section 5 of the Securities Act (except for the requirement to deliver a prospectus included in the Exchange Registration Statement applicable to resales by broker-dealers of Exchange Securities received by such broker-dealer pursuant to an Exchange Offer in exchange for Registrable Securities other than those acquired by the broker-dealer directly from the Company), in lieu of conducting the Exchange Offer contemplated by Section 2(a) the Company shall file under the Securities Act as soon as practicable, but no later than the later of 30 days after the time such obligation to file arises and 60 days after the Closing, a "shelf" registration statement providing for the registration of, and the sale on a continuous or delayed basis by the holders of, all of the Registrable Securities, pursuant to Rule 415 or any similar rule that may be adopted by the Commission (such filing, the "Shelf Registration" and such registration statement, the "Shelf Registration Statement"). In addition, in the event that the Purchasers shall not have resold all of the Securities initially purchased by them from the Company pursuant to the Note Purchase Agreement prior to the consummation of the Exchange Offer, the Company shall file under the Securities Act as soon as practicable a Shelf Registration Statement. The Company agrees to use its best efforts (i) to cause the Shelf Registration Statement to become or be declared effective no later than 120 days after such Shelf Registration Statement is filed and to keep such Shelf Registration Statement continuously effective in order to permit the prospectus forming a part thereof to be usable by holders for resales of Registrable Securities for a period ending on the earlier of the second anniversary of the Closing or such time as there are no longer any Registrable Securities outstanding, provided, however, that no holder shall be entitled to be named as a selling securityholder in the Shelf Registration Statement or to use the prospectus forming a part thereof for resales of Registrable Securities unless such holder is an Electing Holder, and (ii) after the Effective Time of the Shelf Registration Statement, promptly upon the request of any holder of Registrable Securities that is not then an Electing Holder, to take any action reasonably necessary to enable such holder to use the prospectus forming a part thereof for resales of Registrable Securities, including, without limitation, any action necessary to identify such holder as a selling securityholder in the Shelf Registration Statement, provided, however, that nothing in this Clause (ii) shall relieve any such holder of the obligation to return a completed and signed Notice and Questionnaire to the Company in accordance with Section 3(d)(iii) hereof. The Company further agrees to supplement or make amendments to the Shelf Registration Statement, as and when required by the rules, regulations or instructions applicable to the registration form used by the Company for such Shelf Registration Statement or by the Securities Act or rules and regulations thereunder for shelf registration, and the Company agrees to furnish to each Electing Holder copies 5 6 of any such supplement or amendment prior to its being used or promptly following its filing with the Commission. Notwithstanding the immediately preceding sentence, the Company may postpone, for a period not to exceed 30 days, supplementing or amending the Shelf Registration Statement if (i) the Company is in possession of material non-public information related to a proposed financing, recapitalization, acquisition, business combination or other material transaction and the Board of Directors of the Company determines (in good faith in a written resolution) that disclosure of such information would have a material adverse effect on the business or operations of the Company and its subsdiaries and disclosure of such information is not otherwise required by law and (ii) the Company delivers notice (which shall include a copy of the resolution of the Board of Directors with respect to such determination) to the Electing Holders and any placement agent or underwriting as contemplated by Section 3(d)(viii)(F) to the effect that Electing Holders may not make offers or sales under the Shelf Registration Statement; provided, however, that the Company may deliver only two such notices within any 12-month period. Promptly upon the earlier of (x) public disclosure of such material non-public information, (y) the date on which such non-public information is no longer material and (z) 30 days after the date notice is given by the Company pursuant to clause (ii) above, the Company shall supplement or amend the Shelf Registration Statement as required by the immediately preceding sentence and give notice to the Electing Holders that offers and sales under the Shelf Registration Statement may be resumed. (c) In the event that (i) the Company has not filed the Exchange Registration Statement on or prior to the 60th day after the Closing, or (ii) such Exchange Registration Statement has not become effective or been declared effective by the Commission on or before the 150th day after the Closing, or (iii) the Exchange Offer is not consummated or a Shelf Registration Statement is not declared effective on or prior to the 180th day after the Closing, or (iv) any Exchange Registration Statement or Shelf Registration Statement required by Section 2(a) or 2(b) hereof is filed and declared effective but shall thereafter either be withdrawn by the Company or shall become subject to an effective stop order issued pursuant to Section 8(d) of the Securities Act suspending the effectiveness of such registration statement (except as specifically permitted herein) without being succeeded immediately by an additional registration statement filed and declared effective (each such event referred to in clauses (i) through (iv), a "Registration Default", then, as liquidated damages for each such Registration Default, subject to the provisions of Section 9(b), the interest rate borne by the Registrable Securities shall be increased by 0.50% per annum following such 60-day period in the case of clause (i) above, following such 150-day period in the case of clause (ii) above, following such 180-day period in the case of clause (iii) above and following the date on which such Exchange Offer Registration Statement or the Shelf Registration Statement, as the case may be, ceases to become effective in the case of clause (iv) above; provided that the aggregate amount of such increase in the interest rate will in no event exceed 1.00% per annum. Upon (w) the filing of the Exchange Offer Registration Statement after the 60-day period described in clause (i) above, (x) the effectiveness of the Exchange Offer Registration Statement after the 150-day period described in clause (ii) above, (y) the consummation of the Exchange Offer or the effectiveness of the Shelf Registration Statement, as the case may be, after the 180-day period described in clause 6 7 (iii) above or (z) the effectiveness of a succeeding registration statement after the date in clause (iv) above, the interest rate borne by the Registrable Securities from the date of filing, effectiveness or consummation, as the case may be, will be reduced to the original interest rate. (d) The Company shall take all reasonable actions necessary or advisable to be taken by it to ensure that the transactions contemplated herein are effected as so contemplated. (e) Any reference herein to a registration statement as of any time shall be deemed to include any document incorporated, or deemed to be incorporated, therein by reference as of such time and any reference herein to any post-effective amendment to a registration statement as of any time shall be deemed to include any document incorporated, or deemed to be incorporated, therein by reference as of such time. 3 Registration Procedures. If the Company files a registration statement pursuant to Section 2(a) or Section 2(b), the following provisions shall apply: (a) At or before the Effective Time of the Exchange Offer or the Shelf Registration, as the case may be, the Company shall qualify the Indenture under the Trust Indenture Act. (b) In the event that such qualification would require the appointment of a new trustee under the Indenture, the Company shall appoint a new trustee thereunder pursuant to the applicable provisions of the Indenture. (c) In connection with the Company's obligations with respect to the registration of Exchange Securities as contemplated by Section 2(a) (the "Exchange Registration"), if applicable, the Company shall, as soon as practicable (or as otherwise specified): (i) prepare and file with the Commission, as soon as practicable but no later than 60 days after the Closing, an Exchange Registration Statement on any form which may be utilized by the Company and which shall permit the Exchange Offer and resales of Exchange Securities by broker-dealers during the Resale Period to be effected as contemplated by Section 2(a), and use its best efforts to cause such Exchange Registration Statement to become effective as soon as practicable thereafter, but no later than 150 days after the Closing; (ii) as soon as practicable prepare and file with the Commission such amendments and supplements to such Exchange Registration Statement and the prospectus included therein as may be necessary to effect and maintain the effectiveness of such Exchange Registration Statement for the periods and purposes contemplated in Section 2(a) hereof and 7 8 as may be required by the applicable rules and regulations of the Commission and the instructions applicable to the form of such Exchange Registration Statement, and promptly provide each broker-dealer holding Exchange Securities with such number of copies of the prospectus included therein (as then amended or supplemented), in conformity in all material respects with the requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission thereunder, as such broker-dealer reasonably may request prior to the expiration of the Resale Period, for use in connection with resales of Exchange Securities; (iii) promptly notify each broker-dealer that has requested or received copies of the prospectus included in such registration statement, and confirm such advice in writing, (A) when such Exchange Registration Statement or the prospectus included therein or any prospectus amendment or supplement or post-effective amendment has been filed, and, with respect to such Exchange Registration Statement or any post-effective amendment, when the same has become effective, (B) of any comments by the Commission and by the blue sky or securities commissioner or regulator of any state with respect thereto or any request by the Commission for amendments or supplements to such Exchange Registration Statement or prospectus or for additional information, (C) of the issuance by the Commission of any stop order suspending the effectiveness of such Exchange Registration Statement or the initiation or threatening of any proceedings for that purpose, (D) if at any time the representations and warranties of the Company contemplated by Section 5 cease to be true and correct in all material respects, (E) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Exchange Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose or (F) at any time during the Resale Period when a prospectus is required to be delivered under the Securities Act, that such Exchange Registration Statement, prospectus, prospectus amendment or supplement or post-effective amendment does not conform in all material respects to the applicable requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission thereunder or contains an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing; (iv) in the event that the Company would be required, pursuant to Section 3(c)(iii)(F) above, to notify any broker-dealers holding Exchange Securities, without unreasonable delay prepare and furnish to each such holder a reasonable number of copies of a prospectus supplemented or amended so that, as thereafter delivered to purchasers of such Exchange Securities during the Resale Period, such prospectus shall conform in all material respects to the applicable requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission thereunder and shall not contain an untrue statement of a material fact or omit to state a material fact required to be 8 9 stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing; (v) use its reasonable best efforts to obtain the withdrawal of any order suspending the effectiveness of such Exchange Registration Statement or any post-effective amendment thereto at the earliest practicable date; (vi) use its reasonable best efforts to (A) register or qualify the Exchange Securities under the securities laws or blue sky laws of such jurisdictions as are contemplated by Section 2(a), if such registration or qualification is required by such laws, no later than the commencement of the Exchange Offer, (B) keep such registrations or qualifications in effect and comply with such laws so as to permit the continuance of offers, sales and dealings therein in such jurisdictions until the expiration of the Resale Period and (C) take any and all other actions as may be reasonably necessary or advisable to enable each broker-dealer holding Exchange Securities to consummate the disposition thereof in such jurisdictions; provided, however, that the Company shall not be required for any such purpose to (1) qualify as a foreign corporation in any jurisdiction wherein it would not otherwise be required to qualify but for the requirements of this Section 3(c)(vi), (2) consent to general service of process in any such jurisdiction or (3) make any changes to its articles of incorporation or bylaws or any agreement between it and its shareholders; (vii) use its reasonable best efforts to obtain the consent or approval of each governmental agency or authority, whether federal, state or local, which may be required to effect the Exchange Registration, the Exchange Offer and the offering and sale of Exchange Securities by broker-dealers during the Resale Period; (viii) provide a CUSIP number for all Exchange Securities, not later than the applicable Effective Time; (ix) comply with all applicable rules and regulations of the Commission, and make generally available to its securityholders as soon as practicable but no later than eighteen months after the effective date of such Exchange Registration Statement, an earning statement of the Company and its subsidiaries complying with Section 11(a) of the Securities Act (including, at the option of the Company, Rule 158 thereunder). (d) In connection with the Company's obligations with respect to the Shelf Registration, if applicable, the Company shall, as soon as practicable (or as otherwise specified): (i) prepare and file with the Commission, as soon as practicable but in any case within the time periods specified in Section 2(b), a Shelf Registration Statement on any form which may be utilized by the Company and which shall register all of the Registrable 9 10 Securities for resale by the holders thereof in accordance with such method or methods of disposition as may be specified by such of the holders as, from time to time, may be Electing Holders and use its reasonable best efforts to cause such Shelf Registration Statement to become effective as soon as practicable but in any case within the time periods specified in Section 2(b); (ii) not less than 30 calendar days prior to the Effective Time of the Shelf Registration Statement, mail the Notice and Questionnaire to the holders of Registrable Securities; no holder shall be entitled to be named as a selling securityholder in the Shelf Registration Statement as of the Effective Time, and no holder shall be entitled to use the prospectus forming a part thereof for resales of Registrable Securities at any time, unless such holder has returned a completed and signed Notice and Questionnaire to the Company by the deadline for response set forth therein; provided, however, holders of Registrable Securities shall have at least 28 calendar days from the date on which the Notice and Questionnaire is first mailed to such holders to return a completed and signed Notice and Questionnaire to the Company; (iii) after the Effective Time of the Shelf Registration Statement, upon the request of any holder of Registrable Securities that is not then an Electing Holder, promptly send a Notice and Questionnaire to such holder; provided that the Company shall not be required to take any action to name such holder as a selling securityholder in the Shelf Registration Statement or to enable such holder to use the prospectus forming a part thereof for resales of Registrable Securities until such holder has returned a completed and signed Notice and Questionnaire to the Company; (iv) as soon as practicable prepare and file with the Commission such amendments and supplements to such Shelf Registration Statement and the prospectus included therein as may be necessary to effect and maintain the effectiveness of such Shelf Registration Statement for the period specified in Section 2(b) hereof and as may be required by the applicable rules and regulations of the Commission and the instructions applicable to the form of such Shelf Registration Statement, and furnish to the Electing Holders copies of any such supplement or amendment simultaneously with or prior to its being used or filed with the Commission; (v) comply with the provisions of the Securities Act with respect to the disposition of all of the Registrable Securities covered by such Shelf Registration Statement in accordance with the intended methods of disposition by the Electing Holders provided for in such Shelf Registration Statement; (vi) provide (A) the Electing Holders, (B) the underwriters (which term, for purposes of this Exchange and Registration Rights Agreement, shall include a person 10 11 deemed to be an underwriter within the meaning of Section 2(11) of the Securities Act), if any, thereof, (C) any sales or placement agent therefor, (D) counsel for any such underwriter or agent and (E) not more than one counsel for all the Electing Holders the opportunity to participate in the preparation of such Shelf Registration Statement, each prospectus included therein or filed with the Commission and each amendment or supplement thereto; (vii) for a reasonable period prior to the filing of such Shelf Registration Statement, and throughout the period specified in Section 2(b), make available at reasonable times at the Company's principal place of business or such other reasonable place for inspection by the persons referred to in Section 3(d)(vi) who shall certify to the Company that they have a current intention to sell the Registrable Securities pursuant to the Shelf Registration such financial and other information and books and records of the Company, and cause the officers, employees, counsel and independent certified public accountants of the Company to respond to such inquiries, as shall be reasonably necessary, in the judgment of the respective counsel referred to in such Section, to conduct a reasonable investigation within the meaning of Section 11 of the Securities Act; provided, however, that each such party shall be required to maintain in confidence and not to disclose to any other person any information or records reasonably designated by the Company as being confidential, until such time as (A) such information becomes a matter of public record (whether by virtue of its inclusion in such registration statement or otherwise) other than as a result of a breach of this Section 3(d)(vii), (B) such person shall be required so to disclose such information pursuant to a subpoena or order of any court or other governmental agency or body having jurisdiction over the matter (subject to the requirements of such order, and only after such person shall have given the Company prompt prior written notice of such requirement) or (C) such information is required to be set forth in such Shelf Registration Statement or the prospectus included therein or in an amendment to such Shelf Registration Statement or an amendment or supplement to such prospectus in order that such Shelf Registration Statement, prospectus, amendment or supplement, as the case may be, complies with applicable requirements of the federal securities laws and the rules and regulations of the Commission and does not contain an untrue statement of a material fact or omit to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing; (viii) promptly notify each of the Electing Holders, any sales or placement agent therefor and any underwriter thereof (which notification may be made through any managing underwriter that is a representative of such underwriter for such purpose) and confirm such advice in writing, (A) when such Shelf Registration Statement or the prospectus included therein or any prospectus amendment or supplement or post-effective amendment has been filed and, with respect to such Shelf Registration Statement or any post-effective amendment, when the same has become effective, (B) of any comments by 11 12 the Commission and by the blue sky or securities commissioner or regulator of any state with respect thereto or any request by the Commission for amendments or supplements to such Shelf Registration Statement or prospectus or for additional information, (C) of the issuance by the Commission of any stop order suspending the effectiveness of such Shelf Registration Statement or the initiation or threatening of any proceedings for that purpose, (D) if at any time the representations and warranties of the Company contemplated by Section 3(d)(xvii) or Section 5 cease to be true and correct in all material respects, (E) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Registrable Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose or (F) if at any time when a prospectus is required to be delivered under the Securities Act, such Shelf Registration Statement, prospectus, prospectus amendment or supplement or post-effective amendment does not conform in all material respects to the applicable requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission thereunder or contains an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing; (ix) use its reasonable best efforts to obtain the withdrawal of any order suspending the effectiveness of such registration statement or any post-effective amendment thereto at the earliest practicable date; (x) if requested by any managing underwriter or underwriters, any placement or sales agent or any Electing Holder, promptly incorporate in a prospectus supplement or post-effective amendment such information as is required by the applicable rules and regulations of the Commission and as such managing underwriter or underwriters, such agent or such Electing Holder specifies should be included therein relating to the terms of the sale of such Registrable Securities, including information with respect to the principal amount at maturity of Registrable Securities being sold by such Electing Holder or agent or to any underwriters, the name and description of such Electing Holder, agent or underwriter, the offering price of such Registrable Securities and any discount, commission or other compensation payable in respect thereof, the purchase price being paid therefor by such underwriters and with respect to any other terms of the offering of the Registrable Securities to be sold by such Electing Holder or agent or to such underwriters; and make all required filings of such prospectus supplement or post-effective amendment promptly after notification of the matters to be incorporated in such prospectus supplement or post-effective amendment; (xi) furnish to each Electing Holder, each placement or sales agent, if any, therefor, each underwriter, if any, thereof and the respective counsel referred to in Section 3(d)(vi) an executed copy (or, in the case of an Electing Holder, a conformed copy) of such 12 13 Shelf Registration Statement, each such amendment and supplement thereto (in each case including all exhibits thereto (in the case of an Electing Holder of Registrable Securities, upon request) and documents incorporated by reference therein) and such number of copies of such Shelf Registration Statement (excluding exhibits thereto and documents incorporated by reference therein unless specifically so requested by such Electing Holder, agent or underwriter, as the case may be) and of the prospectus included in such Shelf Registration Statement (including each preliminary prospectus and any summary prospectus), in conformity in all material respects with the applicable requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission thereunder, and such other documents, as such Electing Holder, agent, if any, and underwriter, if any, may reasonably request in order to facilitate the offering and disposition of the Registrable Securities owned by such Electing Holder, offered or sold by such agent or underwritten by such underwriter and to permit such Electing Holder, agent and underwriter to satisfy the prospectus delivery requirements of the Securities Act; and the Company hereby consents to the use of such prospectus (including such preliminary and summary prospectus) and any amendment or supplement thereto by each such Electing Holder and by any such agent and underwriter, in each case in the form most recently provided to such person by the Company, in connection with the offering and sale of the Registrable Securities covered by the prospectus (including such preliminary and summary prospectus) or any supplement or amendment thereto; (xii) use its reasonable best efforts to (A) register or qualify the Registrable Securities to be included in such Shelf Registration Statement under such securities laws or blue sky laws of such jurisdictions as any Electing Holder and each placement or sales agent, if any, therefor and underwriter, if any, thereof shall reasonably request, (B) keep such registrations or qualifications in effect and comply with such laws so as to permit the continuance of offers, sales and dealings therein in such jurisdictions during the period the Shelf Registration is required to remain effective under Section 2(b) above and for so long as may be necessary to enable any such Electing Holder, agent or underwriter to complete its distribution of Securities pursuant to such Shelf Registration Statement and (C) take any and all other actions as may be reasonably necessary or advisable to enable each such Electing Holder, agent, if any, and underwriter, if any, to consummate the disposition in such jurisdictions of such Registrable Securities; provided, however, that the Company shall not be required for any such purpose to (1) qualify as a foreign corporation in any jurisdiction wherein it would not otherwise be required to qualify but for the requirements of this Section 3(d)(xii), (2) consent to general service of process in any such jurisdiction or (3) make any changes to its articles of incorporation or bylaws or any agreement between it and its shareholders; (xiii) use its reasonable best efforts to obtain the consent or approval of each governmental agency or authority, whether federal, state or local, which may be required 13 14 to effect the Shelf Registration or the offering or sale in connection therewith or to enable the selling holder or holders to offer, or to consummate the disposition of, their Registrable Securities; (xiv) cooperate with the Electing Holders and the managing underwriters, if any, to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold, which certificates shall be printed, lithographed or engraved, or produced by any combination of such methods, and which shall not bear any restrictive legends; and, in the case of an underwritten offering, enable such Registrable Securities to be in such denominations and registered in such names as the managing underwriters may request at least two business days prior to any sale of the Registrable Securities; (xv) provide a CUSIP number for all Registrable Securities, not later than the applicable Effective Time; (xvi) enter into one or more underwriting agreements, engagement letters, agency agreements, "best efforts" underwriting agreements or similar agreements, as appropriate, including customary provisions relating to indemnification and contribution, and take such other actions in connection therewith as any Electing Holders aggregating at least 20% in aggregate principal amount at maturity of the Registrable Securities at the time outstanding shall reasonably request in order to expedite or facilitate the disposition of such Registrable Securities; (xvii) whether or not an agreement of the type referred to in Section 3(d)(xvi) hereof is entered into and whether or not any portion of the offering contemplated by the Shelf Registration is an underwritten offering or is made through a placement or sales agent or any other entity, (A) make such representations and warranties to the Electing Holders and the placement or sales agent, if any, therefor and the underwriters, if any, thereof in form, substance and scope as are customarily made in connection with an offering of debt securities pursuant to any appropriate agreement or to a registration statement filed on the form applicable to the Shelf Registration; (B) obtain an opinion of counsel to the Company in customary form and covering such matters, of the type customarily covered by such an opinion, as the managing underwriters, if any, or as any Electing Holders of at least 20% in aggregate principal amount at maturity of the Registrable Securities at the time outstanding may reasonably request, addressed to such Electing Holder or Electing Holders and the placement or sales agent, if any, therefor and the underwriters, if any, thereof and dated the effective date of such Shelf Registration Statement (and if such Shelf Registration Statement contemplates an underwritten offering of a part or all of the Registrable Securities, dated the date of the closing under the underwriting agreement relating thereto) (it being agreed that the matters to be covered by such opinion shall include the due 14 15 incorporation and good standing of the Company and its subsidiaries; the qualification of the Company and its subsidiaries to transact business as foreign corporations; the due authorization, execution and delivery of the relevant agreement of the type referred to in Section 3(d)(xvi) hereof; the due authorization, execution, authentication and issuance, and the validity and enforceability, of the Securities; the absence of material legal or governmental proceedings involving the Company; the absence of a breach by the Company or any of its subsidiaries of, or a default under, material agreements binding upon the Company or any subsidiary of the Company; the absence of governmental approvals required to be obtained in connection with the Shelf Registration, the offering and sale of the Registrable Securities, this Exchange and Registration Rights Agreement or any agreement of the type referred to in Section 3(d)(xvi) hereof, except such approvals, if any, as may be required under state securities or blue sky laws; the material compliance as to form of such Shelf Registration Statement and any documents incorporated by reference therein (in each case other than the financial statements and other financial information contained therein) and of the Indenture with the requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission thereunder, respectively; and, as of the date of the opinion and of the Shelf Registration Statement or most recent post-effective amendment thereto, as the case may be, the absence from such Shelf Registration Statement and the prospectus included therein, as then amended or supplemented, and from the documents incorporated by reference therein (in each case other than the financial statements and other financial information contained therein) of an untrue statement of a material fact or the omission to state therein a material fact necessary to make the statements therein not misleading (in the case of such documents, in the light of the circumstances existing at the time that such documents were filed with the Commission under the Exchange Act)); (C) obtain a "cold comfort" letter or letters from the independent certified public accountants of the Company addressed to the selling Electing Holders, the placement or sales agent, if any, therefor or the underwriters, if any, thereof, dated (i) the effective date of such Shelf Registration Statement and (ii) the effective date of any prospectus supplement to the prospectus included in such Shelf Registration Statement or post-effective amendment to such Shelf Registration Statement which includes unaudited or audited financial statements as of a date or for a period subsequent to that of the latest such statements included in such prospectus (and, if such Shelf Registration Statement contemplates an underwritten offering pursuant to any prospectus supplement to the prospectus included in such Shelf Registration Statement or post-effective amendment to such Shelf Registration Statement which includes unaudited or audited financial statements as of a date or for a period subsequent to that of the latest such statements included in such prospectus, dated the date of the closing under the underwriting agreement relating thereto), such letter or letters to be in customary form and covering such matters of the type customarily covered by letters of such type; (D) deliver such documents and certificates, including officers' certificates, as may be reasonably requested by any Electing Holders of at least 20% in aggregate principal amount at maturity of the Registrable Securities at the 15 16 time outstanding or the placement or sales agent, if any, therefor and the managing underwriters, if any, thereof to evidence the accuracy of the representations and warranties made pursuant to clause (A) above or those contained in Section 5(a) hereof and the compliance with or satisfaction of any agreements or conditions contained in the underwriting agreement or other agreement entered into by the Company; and (E) undertake such obligations relating to expense reimbursement, indemnification and contribution as are provided in Section 6 hereof; (xviii) notify in writing each holder of Registrable Securities of any proposal by the Company to amend or waive any provision of this Exchange and Registration Rights Agreement pursuant to Section 9(h) hereof and of any amendment or waiver effected pursuant thereto, each of which notices shall contain the text of the amendment or waiver proposed or effected, as the case may be; (xix) in the event that any broker-dealer registered under the Exchange Act shall underwrite any Registrable Securities or participate as a member of an underwriting syndicate or selling group or "assist in the distribution" (within the meaning of the Rules of Fair Practice and the By-Laws of the National Association of Securities Dealers, Inc. ("NASD") or any successor thereto, as amended from time to time) thereof, whether as a holder of such Registrable Securities or as an underwriter, a placement or sales agent or a broker or dealer in respect thereof, or otherwise, assist such broker-dealer in complying with the requirements of such Rules and By-Laws, including by (A) if such Rules or By-Laws shall so require, engaging a "qualified independent underwriter" (as defined in such Schedule (or any successor thereto)) to participate in the preparation of the Shelf Registration Statement relating to such Registrable Securities, to exercise usual standards of due diligence in respect thereto and, if any portion of the offering contemplated by such Shelf Registration Statement is an underwritten offering or is made through a placement or sales agent, to recommend the yield of such Registrable Securities, (B) indemnifying any such qualified independent underwriter to the extent of the indemnification of underwriters provided in Section 6 hereof (or to such other customary extent as may be requested by such underwriter) and (C) providing such information to such broker-dealer as may be required in order for such broker-dealer to comply with the requirements of the Rules of Fair Practice of the NASD; and (xx) comply with all applicable rules and regulations of the Commission, and make generally available to its securityholders as soon as practicable but in any event not later than eighteen months after the effective date of such Shelf Registration Statement, an earning statement of the Company and its subsidiaries complying with Section 11(a) of the Securities Act (including, at the option of the Company, Rule 158 thereunder). 16 17 (e) In the event that the Company would be required, pursuant to Section 3(d)(viii)(F) above, to notify the Electing Holders, the placement or sales agent, if any, therefor and the managing underwriters, if any, thereof, the Company shall without delay prepare and furnish to each of the Electing Holders, to each placement or sales agent, if any, and to each such underwriter, if any, a reasonable number of copies of a prospectus supplemented or amended so that, as thereafter delivered to purchasers of Registrable Securities, such prospectus shall conform in all material respects to the applicable requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission thereunder and shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing. Each Electing Holder agrees that upon receipt of any notice from the Company pursuant to Section 3(d)(viii)(F) hereof, such Electing Holder shall forthwith discontinue the disposition of Registrable Securities pursuant to the Shelf Registration Statement applicable to such Registrable Securities until such Electing Holder shall have received copies of such amended or supplemented prospectus, and if so directed by the Company, such Electing Holder shall deliver to the Company (at the Company's expense) all copies, other than permanent file copies, then in such Electing Holder's possession of the prospectus covering such Registrable Securities at the time of receipt of such notice. (f) In the event of a Shelf Registration, in addition to the information required to be provided by each Electing Holder in its Notice and Questionnaire, the Company may require such Electing Holder to furnish to the Company such additional information regarding such Electing Holder and such Electing Holder's intended method of distribution of Registrable Securities as may be required in order to comply with the Securities Act. Each such Electing Holder agrees to notify the Company as promptly as practicable of any inaccuracy or change in information previously furnished by such Electing Holder to the Company or of the occurrence of any event in either case as a result of which any prospectus relating to such Shelf Registration contains or would contain an untrue statement of a material fact regarding such Electing Holder or such Electing Holder's intended method of disposition of such Registrable Securities or omits to state any material fact regarding such Electing Holder or such Electing Holder's intended method of disposition of such Registrable Securities required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing, and promptly to furnish to the Company any additional information required to correct and update any previously furnished information or required so that such prospectus shall not contain, with respect to such Electing Holder or the disposition of such Registrable Securities, an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing. (g) Until the expiration of two years after the Closing, the Company will not, and will not permit any of its "affiliates" (as defined in Rule 144) to, resell any of the Securities that have been 17 18 reacquired by any of them except pursuant to an effective registration statement under the Securities Act. 4. Registration Expenses. The Company agrees to bear and to pay or cause to be paid promptly all expenses incident to the Company's performance of or compliance with this Exchange and Registration Rights Agreement, including (a) all Commission and any NASD registration, filing and review fees and expenses including fees and disbursements of counsel for the placement or sales agent or underwriters in connection with such registration, filing and review, (b) all fees and expenses in connection with the qualification of the Securities for offering and sale under the State securities and blue sky laws referred to in Section 3(d)(xii) hereof and determination of their eligibility for investment under the laws of such jurisdictions as any managing underwriters or the Electing Holders may designate, including any fees and disbursements of counsel for the Electing Holders (subject to the limitations of Clause (i) below) or underwriters in connection with such qualification and determination, (c) all expenses relating to the preparation, printing, production, distribution and reproduction of each registration statement required to be filed hereunder, each prospectus included therein or prepared for distribution pursuant hereto, each amendment or supplement to the foregoing, the expenses of preparing the Securities for delivery and the expenses of printing or producing any underwriting agreements, agreements among underwriters, selling agreements and blue sky or legal investment memoranda and all other documents in connection with the offering, sale or delivery of Securities to be disposed of (including certificates representing the Securities), (d) messenger, telephone and delivery expenses relating to the offering, sale or delivery of Securities and the preparation of documents referred in clause (c) above, (e) fees and expenses of the Trustee under the Indenture, any agent of the Trustee and any counsel for the Trustee and of any collateral agent or custodian, (f) internal expenses (including all salaries and expenses of the Company's officers and employees performing legal or accounting duties), (g) fees, disbursements and expenses of counsel and independent certified public accountants of the Company (including the expenses of any opinions or "cold comfort" letters required by or incident to such performance and compliance), (h) fees, disbursements and expenses of any "qualified independent underwriter" engaged pursuant to Section 3(d)(xix) hereof, (i) fees, disbursements and expenses of one counsel for the Electing Holders retained in connection with a Shelf Registration, as selected by the Electing Holders of at least a majority in aggregate principal amount at maturity of the Registrable Securities held by Electing Holders (which counsel shall be reasonably satisfactory to the Company), (j) any fees charged by securities rating services for rating the Securities, and (k) fees, expenses and disbursements of any other persons, including special experts, retained by the Company in connection with such registration (collectively, the "Registration Expenses"). To the extent that any Registration Expenses are incurred, assumed or paid by any holder of Registrable Securities or any placement or sales agent therefor or underwriter thereof, the Company shall reimburse such person for the full amount of the Registration Expenses so incurred, assumed or paid promptly after receipt of a request therefor. Notwithstanding the foregoing, the holders of the Registrable Securities being registered shall pay all agency fees and commissions and underwriting discounts and commissions attributable to the sale of such Registrable Securities and the fees and disbursements of any counsel or other advisors or experts retained by such holders (severally or jointly), other than the counsel and experts specifically referred to above. 18 19 5. Representations and Warranties. The Company represents and warrants to, and agrees with, each Purchaser and each of the holders from time to time of Registrable Securities that: (a) Each registration statement covering Registrable Securities and each prospectus (including any preliminary or summary prospectus) contained therein or furnished pursuant to Section 3(d) or Section 3(c) hereof and any further amendments or supplements to any such registration statement or prospectus, when it becomes effective or is filed with the Commission, as the case may be, and, in the case of an underwritten offering of Registrable Securities, at the time of the closing under the underwriting agreement relating thereto, will conform in all material respects to the applicable requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission thereunder and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and at all times subsequent to the Effective Time when a prospectus would be required to be delivered under the Securities Act, other than from (i) such time as a notice has been given to holders of Registrable Securities pursuant to Section 3(d)(viii)(F) or Section 3(c)(iii)(F) hereof until (ii) such time as the Company furnishes an amended or supplemented prospectus pursuant to Section 3(e) or Section 3(c)(iv) hereof, each such registration statement, and each prospectus (including any summary prospectus) contained therein or furnished pursuant to Section 3(d) or Section 3(c) hereof, as then amended or supplemented, will conform in all material respects to the applicable requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission thereunder and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by a holder of Registrable Securities expressly for use therein. (b) Any documents incorporated by reference in any prospectus referred to in Section 5(a) hereof, when they become or became effective or are or were filed with the Commission, as the case may be, will conform or conformed in all material respects to the requirements of the Securities Act or the Exchange Act, as applicable, and none of such documents will contain or contained an untrue statement of a material fact or will omit or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by a holder of Registrable Securities expressly for use therein. 19 20 (c) The compliance by the Company with all of the provisions of this Exchange and Registration Rights Agreement and the consummation of the transactions herein contemplated will not conflict with or result in a breach of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any subsidiary of the Company is a party or by which the Company or any subsidiary of the Company is bound or to which any of the property or assets of the Company or any subsidiary of the Company is subject, nor will such action result in any violation of the provisions of the articles of incorporation, or the bylaws of the Company or any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any subsidiary of the Company or any of their properties; and no consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the consummation by the Company of the transactions contemplated by this Exchange and Registration Rights Agreement, except the registration under the Securities Act of the Securities, qualification of the Indenture under the Trust Indenture Act and such consents, approvals, authorizations, registrations or qualifications, if any, as may be required under State securities or blue sky laws in connection with the offering and distribution of the Securities. (d) This Exchange and Registration Rights Agreement has been duly authorized, executed and delivered by the Company. 6. Indemnification. (a) Indemnification by the Company. The Company shall indemnify and hold harmless each of the holders of Registrable Securities included in an Exchange Registration Statement, each of the Electing Holders of Registrable Securities included in a Shelf Registration Statement and each person who participates as a placement or sales agent or as an underwriter in any offering or sale of such Registrable Securities against any losses, claims, damages or liabilities, joint or several, to which such holder, agent or underwriter may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Exchange Registration Statement or Shelf Registration Statement, as the case may be, under which such Registrable Securities were registered under the Securities Act, or any preliminary, final or summary prospectus contained therein or furnished by the Company to any such holder, Electing Holder, agent or underwriter, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and the Company shall, and it hereby agrees to, reimburse such holder, such Electing Holder, such agent and such underwriter for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that the Company shall not be liable to any such person in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in such registration statement, or preliminary, final or summary prospectus, or amendment or supplement thereto, in reliance upon and in conformity with written information furnished to the Company by such person expressly for use therein. (b) Indemnification by the Holders and any Agents and Underwriters. The Company may require, as a condition to including any Registrable Securities in any registration statement filed pursuant to Section 2(b) hereof and to entering into any underwriting agreement with respect thereto, that the Company shall have received an undertaking reasonably satisfactory to it from the Electing Holder of such Registrable Securities and from each underwriter named in any such underwriting agreement, severally and not jointly, to (i) indemnify and hold harmless the Company, and all other holders of Registrable Securities, against any losses, claims, damages or liabilities to which the Company or such other holders of Registrable Securities may become subject, under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in such registration statement, or any preliminary, final or summary prospectus contained therein or furnished by the Company to any such Electing Holder, agent or underwriter, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company by 20 21 such Electing Holder or underwriter expressly for use therein, and (ii) reimburse the Company for any legal or other expenses reasonably incurred by the Company in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that no such Electing Holder shall be required to undertake liability to any person under this Section 6(b) for any amounts in excess of the dollar amount of the proceeds to be received by such Electing Holder from the sale of such Electing Holder's Registrable Securities pursuant to such registration. (c) Notices of Claims, Etc. Promptly after receipt by an indemnified party under subsection (a) or (b) above of written notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against an indemnifying party pursuant to the indemnification provisions of or contemplated by this Section 6, notify such indemnifying party in writing of the commencement of such action; but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to any indemnified party other than under the indemnification provisions of or contemplated by Section 6(a) or 6(b) hereof. In case any such action shall be brought against any indemnified party and it shall notify an indemnifying party of the commencement thereof, such indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, such indemnifying party shall not be liable to such indemnified party for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation. No indemnifying party shall, without the written consent of the indemnified party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (i) includes an unconditional release of the indemnified party from all liability arising out of such action or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party. (d) Contribution. If for any reason the indemnification provisions contemplated by Section 6(a) or Section 6(b) are unavailable to or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified party in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative fault of such indemnifying party and indemnified party shall 21 22 be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by such indemnifying party or by such indemnified party, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The parties hereto agree that it would not be just and equitable if contributions pursuant to this Section 6(d) were determined by pro rata allocation (even if the holders or any agents or underwriters or all of them were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in this Section 6(d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages, or liabilities (or actions in respect thereof) referred to above shall be deemed to include any legal or other fees or expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 6(d), no holder shall be required to contribute any amount in excess of the amount by which the dollar amount of the proceeds received by such holder from the sale of any Registrable Securities (after deducting any fees, discounts and commissions applicable thereto) exceeds the amount of any damages which such holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission, and no underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Registrable Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The holders' and any underwriters' obligations in this Section 6(d) to contribute shall be several in proportion to the principal amount at maturity of Registrable Securities registered or underwritten, as the case may be, by them and not joint. (e) The obligations of the Company under this Section 6 shall be in addition to any liability which the Company may otherwise have and shall extend, upon the same terms and conditions, to each officer, director and partner of each holder, agent and underwriter and each person, if any, who controls any holder, agent or underwriter within the meaning of the Securities Act; and the obligations of the holders and any agents or underwriters contemplated by this Section 6 shall be in addition to any liability which the respective holder, agent or underwriter may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the Company (including any person who, with his consent, is named in any registration statement as about to become a director of the Company) and to each person, if any, who controls the Company within the meaning of the Securities Act. 22 23 7. Underwritten Offerings. (a) Selection of Underwriters. If any of the Registrable Securities covered by the Shelf Registration are to be sold pursuant to an underwritten offering, the managing underwriter or underwriters thereof shall be designated by Electing Holders holding at least a majority in aggregate principal amount at maturity of the Registrable Securities to be included in such offering, provided that such designated managing underwriter or underwriters is or are reasonably acceptable to the Company. (b) Participation by Holders. Each holder of Registrable Securities hereby agrees with each other such holder that no such holder may participate in any underwritten offering hereunder unless such holder (i) agrees to sell such holder's Registrable Securities on the basis provided in any underwriting arrangements approved by the persons entitled hereunder to approve such arrangements and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements. 8. Rule 144. The Company covenants to the holders of Registrable Securities that to the extent it shall be required to do so under the Exchange Act, the Company shall timely file the reports required to be filed by it under the Exchange Act or the Securities Act (including the reports under Section 13 and 15(d) of the Exchange Act referred to in subparagraph (c)(1) of Rule 144 adopted by the Commission under the Securities Act) and the rules and regulations adopted by the Commission thereunder, and shall take such further action as any holder of Registrable Securities may reasonably request, all to the extent required from time to time to enable such holder to sell Registrable Securities without registration under the Securities Act within the limitations of the exemption provided by Rule 144 under the Securities Act, as such Rule may be amended from time to time, or any similar or successor rule or regulation hereafter adopted by the Commission. Upon the request of any holder of Registrable Securities in connection with that holder's sale pursuant to Rule 144, the Company shall deliver to such holder a written statement as to whether it has complied with such requirements. 9. Miscellaneous. (a) No Inconsistent Agreements. The Company represents, warrants, covenants and agrees that it has not granted, and shall not grant, registration rights with respect to Registrable Securities or any other securities which would be inconsistent with the terms contained in this Exchange and Registration Rights Agreement. 23 24 (b) Specific Performance. The parties hereto acknowledge that there would be no adequate remedy at law if the Company fails to perform any of its obligations hereunder and that the Purchasers and the holders from time to time of the Registrable Securities may be irreparably harmed by any such failure, and accordingly agree that the Purchasers and such holders, in addition to any other remedy to which they may be entitled at law or in equity, shall be entitled to compel specific performance of the obligations of the Company under this Exchange and Registration Rights Agreement in accordance with the terms and conditions of this Exchange and Registration Rights Agreement, in any court of the United States or any State thereof having jurisdiction. (c) Notices. All notices, requests, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been duly given when delivered by hand, if delivered personally or by courier, or three days after being deposited in the mail (registered or certified mail, postage prepaid, return receipt requested) as follows: If to the Company, to it at 7132 Commercial Park Drive, Knoxville, Tennessee 37918, Attention: Executive Vice President-Chief Financial Officer, with a copy to Bass, Berry & Sims, 2700 First American Center, Nashville, Tennessee 37238-2700, Attention: F. Mitchell Walker, Jr., and if to a holder, to the address of such holder set forth in the security register or other records of the Company, or to such other address as the Company or any such holder may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt. (d) Parties in Interest. All the terms and provisions of this Exchange and Registration Rights Agreement shall be binding upon, shall inure to the benefit of and shall be enforceable by the parties hereto and the holders from time to time of the Registrable Securities and the respective successors and assigns of the parties hereto and such holders. In the event that any transferee of any holder of Registrable Securities shall acquire Registrable Securities, in any manner, whether by gift, bequest, purchase, operation of law or otherwise, such transferee shall, without any further writing or action of any kind, be deemed a beneficiary hereof for all purposes and such Registrable Securities shall be held subject to all of the terms of this Exchange and Registration Rights Agreement, and by taking and holding such Registrable Securities such transferee shall be entitled to receive the benefits of, and be conclusively deemed to have agreed to be bound by all of the applicable terms and provisions of this Exchange and Registration Rights Agreement. If the Company shall so request, any such successor, assign or transferee shall agree in writing to acquire and hold the Registrable Securities subject to all of the applicable terms hereof. (e) Survival. The respective indemnities, agreements, representations, warranties and each other provision set forth in this Exchange and Registration Rights Agreement or made pursuant hereto shall remain in full force and effect regardless of any investigation (or statement as to the results thereof) made by or on behalf of any holder of Registrable Securities, any director, officer or partner of such holder, any agent or underwriter or any director, officer or partner thereof, or any controlling person of any of the foregoing, and shall survive delivery of and payment for the 24 25 Registrable Securities pursuant to the Note Purchase Agreement and the transfer and registration of Registrable Securities by such holder and the consummation of an Exchange Offer. (f) LAW GOVERNING. THIS EXCHANGE AND REGISTRATION RIGHTS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK. (g) Headings. The descriptive headings of the several Sections and paragraphs of this Exchange and Registration Rights Agreement are inserted for convenience only, do not constitute a part of this Exchange and Registration Rights Agreement and shall not affect in any way the meaning or interpretation of this Exchange and Registration Rights Agreement. (h) Entire Agreement; Amendments. This Exchange and Registration Rights Agreement and the other writings referred to herein (including the Indenture and the form of Securities) or delivered pursuant hereto which form a part hereof contain the entire understanding of the parties with respect to its subject matter. This Exchange and Registration Rights Agreement supersedes all prior agreements and understandings between the parties with respect to its subject matter. This Exchange and Registration Rights Agreement may be amended and the observance of any term of this Exchange and Registration Rights Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively) only by a written instrument duly executed by the Company and the holders of at least a majority in aggregate principal amount at maturity of the Registrable Securities at the time outstanding. Each holder of any Registrable Securities at the time or thereafter outstanding shall be bound by any amendment or waiver effected pursuant to this Section 9(h), whether or not any notice, writing or marking indicating such amendment or waiver appears on such Registrable Securities or is delivered to such holder. (i) Inspection. For so long as this Exchange and Registration Rights Agreement shall be in effect, this Exchange and Registration Rights Agreement and a complete list of the names and addresses of all the holders of Registrable Securities shall be made available for inspection and copying on any business day by any holder of Registrable Securities for proper purposes only (which shall include any purpose related to the rights of the holders of Registrable Securities under the Securities, the Indenture and this Agreement) at the offices of the Company at the address thereof set forth in Section 9(c) above and at the office of the Trustee under the Indenture. (j) Counterparts. This agreement may be executed by the parties in counterparts, each of which shall be deemed to be an original, but all such respective counterparts shall together constitute one and the same instrument. Agreed to and accepted as of the date referred to above. REGAL CINEMAS, INC. By: /S/ MICHAEL L. CAMPBELL ------------------------------ Name: Michael L. Campbell Title: Chief Executive Officer GOLDMAN, SACHS & CO. LEHMAN BROTHERS INC. As Representatives of the several Purchasers By: /S/ GOLDMAN, SACHS & CO. ----------------------------- (Goldman, Sachs & Co.) On behalf of each of the Purchasers 25 26 Exhibit A REGAL CINEMAS, INC. INSTRUCTION TO DTC PARTICIPANTS (Date of Mailing) URGENT - IMMEDIATE ATTENTION REQUESTED DEADLINE FOR RESPONSE: [DATE](1) The Depository Trust Company ("DTC") has identified you as a DTC Participant through which beneficial interests in Regal Cinemas, Inc. (the "Company") 82% Senior Subordinated Notes due 2007 (the "Securities") are held. The Company is in the process of registering the Securities under the Securities Act of 1933 for resale by the beneficial owners thereof. In order to have their Securities included in the registration statement, beneficial owners must complete and return the enclosed Notice of Registration Statement and Selling Securityholder Questionnaire. It is important that beneficial owners of the Securities receive a copy of the enclosed materials as soon as possible as their rights to have the Securities included in the registration statement depend upon their returning the Notice and Questionnaire by [DEADLINE FOR RESPONSE]. Please forward a copy of the enclosed documents to each beneficial owner that holds interests in the Securities through you. If you require more copies of the enclosed materials or have any questions pertaining to this matter, please contact Regal Cinemas, Inc., 7132 Commercial Park Drive, Knoxville, Tennessee 37918, Attention: Executive Vice-President-Chief Financial Officer, - ---------- (1) Not less than 28 calendar days from date of mailing. 27 REGAL CINEMAS, INC. Notice of Registration Statement and Selling Securityholder Questionnaire (Date) Reference is hereby made to the Exchange and Registration Rights Agreement (the "Exchange and Registration Rights Agreement") between Regal Cinemas, Inc. (the "Company") and the Purchasers named therein. Pursuant to the Exchange and Registration Rights Agreement, the Company has filed with the United States Securities and Exchange Commission (the "Commission") a registration statement on Form [___] (the "Shelf Registration Statement") for the registration and resale under Rule 415 of the Securities Act of 1933, as amended (the "Securities Act"), of the Company's 82% Senior Subordinated Notes due 2007 (the "Securities"). A copy of the Exchange and Registration Rights Agreement is attached hereto. All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Exchange and Registration Rights Agreement. Each beneficial owner of Registrable Securities (as defined below) is entitled to have the Registrable Securities beneficially owned by it included in the Shelf Registration Statement. In order to have Registrable Securities included in the Shelf Registration Statement, this Notice of Registration Statement and Selling Securityholder Questionnaire ("Notice and Questionnaire") must be completed, executed and delivered to the Company's counsel at the address set forth herein for receipt ON OR BEFORE [DEADLINE FOR RESPONSE]. Beneficial owners of Registrable Securities who do not complete, execute and return this Notice and Questionnaire by such date (i) will not be named as selling securityholders in the Shelf Registration Statement and (ii) may not use the Prospectus forming a part thereof for resales of Registrable Securities. Certain legal consequences arise from being named as a selling securityholder in the Shelf Registration Statement and related Prospectus. Accordingly, holders and beneficial owners of Registrable Securities are advised to consult their own securities law counsel regarding the consequences of being named or not being named as a selling securityholder in the Shelf Registration Statement and related Prospectus. The term "Registrable Securities" is defined in the Exchange and Registration Rights Agreement. A-2 28 ELECTION The undersigned holder (the "Selling Securityholder") of Registrable Securities hereby elects to include in the Shelf Registration Statement the Registrable Securities beneficially owned by it and listed below in Item (3). The undersigned, by signing and returning this Notice and Questionnaire, agrees to be bound with respect to such Registrable Securities by the terms and conditions of this Notice and Questionnaire and the Exchange and Registration Rights Agreement, including, without limitation, Section 6 of the Exchange and Registration Rights Agreement, as if the undersigned Selling Securityholder were an original party thereto. Upon any sale of Registrable Securities pursuant to the Shelf Registration Statement, the Selling Securityholder will be required to deliver to the Company and Trustee the Notice of Transfer set forth in Appendix A to the Prospectus and as Exhibit B to the Exchange and Registration Rights Agreement. The Selling Securityholder hereby provides the following information to the Company and represents and warrants that such information is accurate and complete: A-3 29 QUESTIONNAIRE (i (A) Full Legal Name of Selling Securityholder: ______________________________________________________________ (B) Full Legal Name of Registered Holder (if not the same as in (a) above) of Registrable Securities Listed in Item (3) below: ______________________________________________________________ (C) Full Legal Name of DTC Participant (if applicable and if not the same as (b) above) Through Which Registrable Securities Listed in Item (3) below are Held: ______________________________________________________________ (ii Address for Notices to Selling Securityholder: _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ Telephone: ___________________________ Fax: ___________________________ Contact Person: ___________________________ (iii) Beneficial Ownership of Securities: Except as set forth below in this Item (3), the undersigned does not beneficially own any Securities. (A) Principal amount at maturity of Registrable Securities beneficially owned: _________________________________________ CUSIP No(s). of such Registrable Securities:_________________ (B) Principal amount at maturity of Securities other than Registrable Securities beneficially owned:___________________ A-4 30 CUSIP No(s). of such other Securities:_______________________ (C) Principal amount at maturity of Registrable Securities which the undersigned wishes to be included in the Shelf Registration Statement:______________________________________ CUSIP No(s). of such Registrable Securities to be included in the Shelf Registration Statement:____________________________ (iv) Beneficial Ownership of Other Securities of the Company: Except as set forth below in this Item (4), the undersigned Selling Securityholder is not the beneficial or registered owner of any other securities of the Company, other than the Securities listed above in Item (3). State any exceptions here: (v) Relationships with the Company: Except as set forth below, neither the Selling Securityholder nor any of its affiliates, officers, directors or principal equity holders (5% or more) has held any position or office or has had any other material relationship with the Company (or its predecessors or affiliates) during the past three years. State any exceptions here: (vi) Plan of Distribution: Except as set forth below, the undersigned Selling Securityholder intends to distribute the Registrable Securities listed above in Item (3) only as follows (if at all): Such Registrable Securities may be sold from time to time directly by the undersigned Selling Securityholder or, alternatively, through underwriters, broker-dealers or agents. Such Registrable Securities may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of sale, at varying prices determined at the time of sale, or at negotiated prices. Such sales may be effected in transactions (which may involve crosses or block transactions) (i) on any national securities exchange or quotation service on which the Registered Securities may be listed or quoted at the A-5 31 time of sale, (ii) in the over-the-counter market, (iii) in transactions otherwise than on such exchanges or services or in the over-the-counter market, or (iv) through the writing of options. In connection with sales of the Registrable Securities or otherwise, the Selling Securityholder may enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the Registrable Securities in the course of hedging the positions they assume. The Selling Securityholder may also sell Registrable Securities short and deliver Registrable Securities to close out such short positions, or loan or pledge Registrable Securities to broker-dealers that in turn may sell such securities. State any exceptions here: By signing below, the Selling Securityholder acknowledges that it understands its obligation to comply, and agrees that it will comply, with the provisions of the Exchange Act and the rules and regulations thereunder, particularly Regulation M (which governs manipulation, stabilization and trading activity during a distribution of securities). In the event that the Selling Securityholder transfers all or any portion of the Registrable Securities listed in Item (3) above after the date on which such information is provided to the Company, the Selling Securityholder agrees to notify the transferee(s) at the time of the transfer of its rights and obligations under this Notice and Questionnaire and the Exchange and Registration Rights Agreement. By signing below, the Selling Securityholder consents to the disclosure of the information contained herein in its answers to Items (1) through (6) above and the inclusion of such information in the Shelf Registration Statement and related Prospectus. The Selling Securityholder understands that such information will be relied upon by the Company, and any underwriters in an underwritten offering of such Selling Securityholder's Registrable Securities listed in Item(3) above, in connection with the preparation of the Shelf Registration Statement and related Prospectus. In accordance with the Selling Securityholder's obligation under Section 3(d) of the Exchange and Registration Rights Agreement to provide such information as may be required by law for inclusion in the Shelf Registration Statement, the Selling Securityholder agrees to promptly notify the Company of any inaccuracies or changes in the information provided herein which may A-6 32 occur subsequent to the date hereof at any time while the Shelf Registration Statement remains in effect. All notices hereunder and pursuant to the Exchange and Registration Rights Agreement shall be made in writing, by hand-delivery, first-class mail, or air courier guaranteeing overnight delivery as follows: (i) To the Company: Regal Cinemas, Inc. 7132 Commercial Park Drive Knoxville, Tennessee 37918 Attention: Executive Vice-President-Chief Financial Officer (423) 922-1123 (ii) With a copy to: Bass, Berry & Sims 2700 First American Center Nashville, Tennessee 37238-2700 Attention: F. Mitchell Walker, Jr. (615) 742-6200 Once this Notice and Questionnaire is executed by the Selling Securityholder and received by the Company's counsel, the terms of this Notice and Questionnaire, and the representations and warranties contained herein, shall be binding on, shall inure to the benefit of and shall be enforceable by the respective successors, heirs, personal representatives, and assigns of the Company and the Selling Securityholder (with respect to the Registrable Securities beneficially owned by such Selling Securityholder and listed in Item (3) above. This Agreement shall be governed in all respects by the laws of the State of New York. A-7 33 IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused this Notice and Questionnaire to be executed and delivered either in person or by its duly authorized agent. Dated: ________________ _________________________________________ Selling Securityholder (Print/type full legal name of beneficial owner of Registrable Securities) By:______________________________________ Name: Title: PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE FOR RECEIPT ON OR BEFORE [DEADLINE FOR RESPONSE] TO THE COMPANY'S COUNSEL AT: Bass, Berry & Sims 2700 First American Center Nashville, Tennessee 37238-2700 Attention: F. Mitchell Walker, Jr. (615) 742-6200 A-8 34 Exhibit B NOTICE OF TRANSFER PURSUANT TO REGISTRATION STATEMENT First Bank National Association Regal Cinemas, Inc. c/o First Bank National Association First Trust Center 180 East Fifth Street St. Paul, MN 55101 Attention: Trust Officer Re: Regal Cinemas, Inc. (the "Company") 8 1/2% Senior Subordinated Notes due 2007 ----------------------------------------- Dear Sirs: Please be advised that _____________________ has transferred $___________ aggregate principal amount at maturity of the above-referenced Notes pursuant to an effective Registration Statement on Form [___] (File No. 333-_______) filed by the Company. We hereby certify that the prospectus delivery requirements, if any, of the Securities Act of 1933, as amended, have been satisfied and that the above-named beneficial owner of the Notes is named as a "Selling Holder" in the Prospectus dated ___________, 199__ or in supplements thereto, and that the aggregate principal amount at maturity of the Notes transferred are the Notes listed in such Prospectus opposite such owner's name. Dated: Very truly yours, ------------------------------ (Name) By: --------------------------- (Authorized Signature) B-1 EX-4.6 4 REGISTRATION RIGHTS AGREEMENT DATED 7/31/97 1 Exhibit 4.6 REGISTRATION RIGHTS AGREEMENT REGISTRATION RIGHTS AGREEMENT dated as of July 31, 1997 by and between Regal Cinemas, Inc. (the "Company") and Cobb Theatres, L.L.C. ("Cobb Theatres"), each of the former affiliate holders of membership interests of Cobb Theatres and each of the former affiliate holders of Partnership Interests (as hereinafter defined) (Cobb Theatres, the former holders of membership interests in Cobb Theatres and the former holders of Partnership Interests being collectively referred to herein as the "former Cobb Affiliate Holders"). WHEREAS, as of the date of this Agreement, the former Cobb Affiliate Holders own 2,837,594 shares of the Company's Common Stock, no par value per share (the "Stock"); WHEREAS, the Board of Directors has authorized the officers of the Company to prepare and execute this Agreement, in the name and on behalf of the Company, to offer certain registration rights to the Holders (as hereinafter defined), the acceptance of which shall be evidenced by their execution of this Agreement; NOW, THEREFORE, the Company and the Holders agree as follows: 1. Definitions. As used in this Agreement, the following terms shall have the following meanings: "Holder" means each former Cobb Affiliate Holder that owns Registrable Securities. For purposes of this Agreement, the Company may deem and treat the registered holder of a Registrable Security as the Holder and absolute owner thereof, and the Company shall not be affected by any notice to the contrary. "Registrable Securities" means (a) the Stock received by Holders in the Mergers of R.C. Cobb, Inc. ("Cobb I"), Cobb Theatres II, Inc. ("Cobb II") and Cobb Finance Corp ("Cobb Finance"), each a wholly-owned subsidiary of Cobb Theatres with Regal Acquisition Corporation, RAC Corporation and RAC Finance Corp., each an Alabama corporation and a wholly owned subsidiary of the Company (the "Mergers") or any distribution to Holders from Cobb Theatres, (b) the stock received by Holders in the acquisition of all of the interests of Tricob Partnership (the "Partnership Interests") and (c) any securities issued or issuable in respect of the Stock referred to above by way of stock dividend or stock split or in connection with a combination of shares, recapitalization, reclassification, merger or consolidation, and any other securities issued pursuant to any other pro rata distribution with respect to such Stock. For purposes of this Agreement, a Registrable Security ceases to be a Registrable Security when (x) it has been effectively registered under the Securities Act and sold or distributed to the public in accordance with an effective registration statement covering it, or (y) it is eligible for sale or sold, distributed or otherwise disposed of pursuant to Rule 144 or 145 (or any successor or similar provision) under the Securities Act. 2 "SEC" means the Securities and Exchange Commission. "Securities Act" means the Securities Act of 1933, as amended from time to time. 2. Demand Registration. (a) Subject to the terms and conditions set forth herein, if at any time any Holder shall request the Company in writing to register under the Securities Act all or a part of the Registrable Securities held by such Holders (a "Demand Registration"), within five business days of receipt of such request the Company shall serve written notice of such registration request to all Holders and the Company will include in such registration all Registrable Securities of such Holders with respect to which the Company has received written requests for inclusion therein within 5 days after receipt by the Holders of such notice. The Company shall use all reasonable efforts to cause to be filed and declared effective as soon as reasonably practicable a registration statement, on such appropriate form as the Company in its discretion shall determine, providing for the sale of all of such Registrable Securities by such Holders; provided, however, that such request shall express the present intention of the Holders to offer or cause the offering of such Registrable Securities for distribution in an underwritten public offering thereof. The registration statement filed pursuant to this Section 2(a) is hereinafter referred to as the "Demand Registration Statement." The Company's obligation to use all reasonable efforts to cause Registrable Securities to be registered in accordance with this Section 2(a) is subject to each of the following limitations, conditions and qualifications: (i) No notice given by the Holders shall be effective hereunder, with respect to the Demand Registration Statement, until after such time as results covering at least 30 days of combined operations of Cobb I, Cobb II and Cobb Finance and the Company have been published by the Company, in the form of a quarterly earnings report, an effective registration statement filed with the SEC, a report to the SEC on Form 10-Q or 8-K, or any other public filing or announcement which includes such combined results of operations. (ii) The Company may postpone for a reasonable period of time, not to exceed 60 days, the filing or the effectiveness of the registration requested pursuant to this Section 2(a) if the Company determines that (A) such registration might have an adverse effect on any plan or proposal by the Company or any of its subsidiaries with respect to any financing, acquisition, recapitalization, reorganization or other material transaction or (B) the Company is in possession of material non-public information and disclosure of such information is not in the best interests of the Company or any of its subsidiaries; provided, however, that (i) the Company shall give written notice of such postponement to the Holders and (ii) as soon as the conditions permitting such delay no longer obtain, the Company shall give notice of that fact to the Holders participating in the registration, and shall proceed with the registration unless such Holders shall have elected, at any time prior to the close of 2 3 business on the tenth business day after the Company has so notified such Holders, to withdraw their request for registration, and such withdrawn request shall not constitute a request hereunder. (iii) The Company shall not be required to effect any registration pursuant to this Section 2(a) unless such registration relates to 1,000,000 Registrable Securities, subject to adjustment and for a stock split or stock dividend. (iv) The obligation of the Company to register Registrable Securities pursuant to this Section 2(a) shall expire after one Demand Registration Statement filed by reason of a request pursuant to Section 2(a) shall have become effective and remained effective for the period specified in Section 4(a)(ii) hereof. (b) The Company agrees that, except as otherwise permitted by Section 2(d) hereof, it will not effect any public sale or distribution (or any registration with respect thereto) of any of its Stock during a period beginning on the 30th day prior to, and ending on the earlier of the 30th day after, the date such Demand Registration Statement is declared effective or the date when attempts to effect such registration are abandoned by or at the request of the Holders participating in such registration (the "Hold-Back Period"). (c) The Company shall have the right to select any recognized investment banking firm(s) to administer the offering. (d) The Company and, at the Company's election, any other holders of Stock with registration rights, may include in any registration requested pursuant to Section 2(a) any shares of Stock which it or they shall determine so to include (the "Additional Registrable Securities") and the consent of the Holders shall not be required with respect thereto; provided, however, that, if, in the opinion of the managing underwriter of such offering, the inclusion in such registration statement of all Additional Registrable Securities would materially interfere with the successful marketing of the Holders' Registrable Securities, then the number of the Additional Registrable Securities shall be reduced to such number, if any, that, in the opinion of such managing underwriter(s), can be included in such underwriting without such interference with the successful marketing of the Holders' Registrable Securities. (e) If, in the opinion of the managing underwriter(s) of any offering, the distribution of a specified portion of the Holders' shares would materially interfere with the registration and sale, in accordance with the intended method thereof, of the initially proposed shares to be offered by all Holders, then the number of Holders' shares to be included in such registration statement shall be reduced (pro rata among the Holders on the basis of the number of shares that each such Holder requested be included) to such number, if any, that, in the opinion of such managing underwriter(s), can be included without such interference. If, as a result of the cutback provisions of the preceding sentence, all Holders are not entitled to include at least 75% of such Holders' requested shares in such registration, such Holders (as a group) may elect to withdraw their request 3 4 to include Holders' shares in such registration (a "Withdrawal Election"); if a Withdrawal Election is made in accordance with this sentence, then no Demand Registration shall be deemed to have been made. (f) As a condition to each Holder's right to include shares in a registration pursuant to this Section, such Holder shall, if requested by the Company or the managing underwriter(s) in connection with such registration and distribution, (A) agree to sell the shares on the basis provided in any underwriting arrangements entered into in connection therewith and (B) complete and execute all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents which are customary in similar transactions and required under the terms of such underwriting arrangements. 3. Piggy-back Registration. (a) If at any time or times after the date hereof the Company proposes to make an underwritten registered public offering of its Common Stock under the Securities Act, other than an offering pursuant to a demand registration under Section 2 hereof or an offering registered on Form S-8, Form S-4, or comparable forms, the Company shall, not less than 5 business days prior to the proposed filing date of the registration form, give written notice of the proposed registration to the Holders, and at the written request of the Holders delivered to the Company within 2 business days after the receipt of such notice, shall include in such registration and offering, and in any underwriting of such offering, all shares of Common Stock that may have been designated in the Holders' request. (b) If a registration in which the Holders have the right to participate pursuant to this Section 3 is an underwritten primary offering on behalf of the Company, and the managing underwriters advise the Company in writing that in their opinion the number of securities requested to be included in such registration, together with the securities being offered by the Company, exceeds the number which can be effectively sold in such offering, the Company shall include in such registration (i) first, the securities of the Company proposed to be sold by the Company, and (ii) second, to the extent possible, the Registrable Securities proposed to be sold by the Holder pursuant to such registration on a pro rata basis among such Holders. If a registration in which the Holders have the right to participate pursuant to this Section 3 is partly or wholly an underwritten secondary offering and the managing underwriters advise the Company and the Holders in writing that in their opinion the number of securities requested to be included in such registration, together with the securities being offered by the Company, exceeds the number which can be effectively sold in such offering and the reasons therefor, then the Company shall include in such registration (i) first the number of shares of Common Stock to be sold by the Company, and (ii) second, to the extent possible, the Registrable Securities proposed to be sold by the Holders and the other selling shareholders pursuant to such registration, in proportion to the number of shares of Common Stock so requested by each of them to be included. 4 5 4. Registration Procedures. (a) Whenever the Company is required to use all reasonable efforts to effect the registration of any Registrable Securities under the Securities Act pursuant to the terms and conditions of Section 2(a) or Section 3 (such Registrable Securities being hereinafter referred to as the "Subject Shares"), the Company will use all reasonable efforts to effect the registration of the Subject Shares in accordance with the intended method of disposition thereof. Without limiting the generality of the foregoing, the Company will as soon as practicable: (i) prepare and file with the Securities and Exchange Commission (the "SEC") a registration statement on any appropriate form under the Securities Act with respect to the Subject Shares and use all reasonable efforts to cause such registration statement to become effective; (ii) prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective and to comply with the provisions of the Securities Act with respect to the disposition of all Subject Shares and other securities covered by such registration statement until the earlier of (A) such time as all of such Subject Shares and other securities have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof set forth in such registration statement and (B) the expiration of 15 days after such registration statement becomes effective; provided, that, if the offering of Subject Shares pursuant to such registration statement is terminated or suspended by any stop order, injunction or other order or requirement of the SEC or any other governmental agency or court, the foregoing time period shall be extended by the number of days during the period from and including the date such stop order, injunction or other order or requirement becomes effective to and including the date when such termination or suspension no longer exists; (iii) furnish the Holders of the Subject Shares covered by such registration statement, without charge, such number of conformed copies of such registration statement and of each such amendment and supplement thereto (in each case without exhibits unless specifically requested), such number of copies of the prospectus included in such registration statement (including each preliminary prospectus), such documents incorporated by reference in such registration statement or prospectus, and such other documents, as such Holders may reasonably request; (iv) use all reasonable efforts to register or qualify the Subject Shares cov ered by such registration statement under the securities or blue sky laws of such jurisdictions as the managing underwriter(s) shall reasonably recommend, and do any and all other acts and things which may be reasonably necessary or advisable to enable the Holders to consummate the disposition in such jurisdictions of the Subject Shares covered by such registration statement, except that the Company shall not for any such purpose be required to (A) qualify generally to do business as a foreign 5 6 corporation in any jurisdiction wherein it is not so qualified, (B) subject itself to taxation in any such jurisdiction wherein it is not so subject, or (C) consent to general service of process in any such jurisdiction or otherwise take any action that would subject it to the general jurisdiction of the courts of any jurisdiction in which it is not so subject; (v) otherwise use all reasonable efforts to comply with all applicable rules and regulations of the SEC; (vi) furnish, at the Company's expense, unlegended certificates representing ownership of the securities being sold in such denominations as shall be requested and instruct the transfer agent to release any stop transfer orders with respect to the Subject Shares being sold; (vii) notify each Holder at any time when a prospectus relating to the Subject Shares is required to be delivered under the Securities Act of the happening of any event as a result of which the prospectus included in such Registration Statement contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements therein (in the case of the prospectus or any preliminary prospectus, in light of the circumstances under which they were made) not misleading, and the Company will, as promptly as practicable thereafter, prepare and file with the SEC and furnish a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of Subject Shares such prospectus will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; (viii) enter into customary agreements (including an underwriting agreement in customary form in the case of an underwritten offering); make such representations and warranties to the Holders and underwriter(s) (in the case of underwritten offerings) in form, substance and scope as are customarily made by issuers to sellers or underwriter(s) in similar offerings; (ix) make available for inspection by the Holders, any underwriter or agent participating in any disposition pursuant to such Registration Statement, and any attorney, accountant or other similar professional advisor retained by any such Holders, underwriter(s) or agents (collectively, the "Inspectors"), all pertinent financial and other records, pertinent corporate documents and properties of the Company (collectively, the "Records"), as shall be reasonably necessary to enable them to exercise their due diligence responsibility, and cause the Company's officers, directors and employees to supply all information reasonably requested by any such Inspector in connection with such Registration Statement. The Holders agree that Records and other information which the Company determines to be confidential and 6 7 of which determination the Inspectors are so notified shall not be disclosed by the Inspectors unless (i) the release of such Records is ordered pursuant to a subpoena, court order or regulatory or agency request or (ii) the information in such Records has been generally disseminated to the public. Each Holder agrees that it will, upon learning that disclosure of such Record is sought in a court of competent jurisdiction or by a governmental agency, give notice to the Company and allow the Company, at the Company's expense, to undertake appropriate action to prevent disclosure of the Records deemed confidential; (x) obtain for delivery to the Company, the underwriter(s) or agent, with copies to the Holders, a "cold comfort" letter from the Company's independent public accountants in customary form and covering such matters of the type customarily covered by "cold comfort" letters as the Holders or the managing underwriter(s) reasonably request; (xi) obtain for delivery to the Holders and the underwriter(s) or agent an opinion or opinions from counsel for the Company in customary form and reasonably satisfactory to the Holders, underwriter(s) or agents and their counsel; (xii) make available to its security holders earnings statements, which need not be audited, satisfying the provisions of Section 11(a) of the Securities Act no later than 90 days after the end of the 12-month period beginning with the first month of the Company's first quarter commencing after the effective date of the Registration Statement, which earnings statements shall cover said 12 month period; (xiii) make every reasonable effort to prevent the issuance of any stop order suspending the effectiveness of the registration statement or of any order preventing or suspending the effectiveness of such registration statement at the earliest possible moment; (xiv) cause the Subject Shares to be registered with or approved by such other governmental agencies or authorities within the United States as may be reasonably necessary to enable the Holders or the underwriter(s) to consummate the disposition of such securities; (xv) cooperate with the Holders and the managing underwriter(s), or any other interested party (including any interested broker-dealer) in making any filings or submission reasonably required to be made, and the furnishing of all appropriate information in connection therewith, with the National Association of Securities Dealers, Inc. ("NASD"); 7 8 (xvi) effect the listing of the Subject Shares on the NASDAQ National Market or other national securities exchange on which shares of the Company's Stock shall then be listed; and (xvii) take all other steps necessary to effect the registration of the Subject Shares contemplated hereby. (b) The Holders shall provide (in writing and signed by the Holders and stated to be specifically for use in the related registration statement, preliminary prospectus, prospectus or other document incident thereto) all such information and materials, including without limitation, the intended plan of distribution, and take all such action as may be required in order to permit the Company to comply with all applicable requirements of the SEC and any applicable state securities laws and to obtain any desired acceleration of the effective date of any registration statement prepared and filed by the Company pursuant to this Agreement. (c) Each Holder agrees, that if the managing underwriter so requires, whether or not any of such Holder's Registrable Securities are included in such registration, not to effect any sale or distribution, including any sale pursuant to Rule 144 or 145 of the Securities Act, of any securities of the Company which are similar to the securities included in such registration (other than as part of the underwritten offering), without the consent of the managing underwriter(s), for a period of 120 days after the date notice is given pursuant to Section 2(a) or Section 3(a) hereof; provided, however, that if the registration statement filed in connection therewith becomes effective within such 120-day period, such 120-day period shall be extended for such period as may be required pursuant to the terms and conditions of any underwriting agreement entered into in connection with such proposed registration. (d) The Holders shall, if requested by the Company or the managing underwriter(s) in connection with any proposed registration and distribution pursuant to this Agreement, (i) agree to sell the Subject Shares on the basis provided in any underwriting arrangements entered into in connection therewith and (ii) complete and execute all questionnaires, powers of attorney, indemnities, underwriting agreement and other documents customary in similar offerings. (e) Upon receipt of any notice from the Company that the Company has become aware that the prospectus (including any preliminary prospectus) included in any registration statement filed pursuant to Section 2(a) or Section 3 hereof, as then in effect, contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading, the Holders shall forthwith discontinue disposition of Subject Shares pursuant to the registration statement covering the same until the Holders' receipt of copies of a supplemented or amended prospectus and, if so directed by the Company, deliver to the Company all copies other than permanent file copies then in the Holder's possession, of the prospectus covering the Subject Shares that was in effect prior to such amendment or supplement. 8 9 (f) Holders of the Subject Shares shall pay all out-of-pocket expenses incurred in connection with the Demand Registration Statement filed pursuant to Section 2(a) (provided, however, that if the Company or any other holders sell shares pursuant to Section 2(d) hereof then the Company or such other holders, as the case may be, shall pay their pro rata share of such expenses), and the Company shall pay expenses incurred in connection with the registration statements filed pursuant to Section 3 of this Agreement. Such expenses shall include, without limitation, all SEC and blue sky registration and filing fees (including NASD fees), printing expenses, transfer agents and registrars' fees, fees and disbursements of the Company's counsel and accountants. Holders shall pay all underwriting discounts, commissions and expenses attributable to the Subject Shares sold pursuant to any registration statement. 5. Investment Representations. Each Holder hereby represents and warrants to, and agrees with the Company that: (a) the Holder has acquired the Stock for investment. (b) the Holder's knowledge and expertise in financial and business matters are such that it is capable of evaluating the merits and risks of the purchase of the Stock. (c) the Holder and such of its representatives as it deems necessary, including professional, tax and legal advisors, have received and had adequate opportunity to review such information concerning the Company as it deems necessary for purposes of evaluating an investment in the Stock, including, but not limited to, the Company's Annual Report on Form 10-K for the year ended January 2, 1997 and the Company's Quarterly Report on Form 10-Q for the quarter ended April 3, 1997, which contain various risk factors relating to an investment in the Stock. (d) the Holder has been advised that the offering, sale and delivery of the Stock to it pursuant to the Mergers and/or acquisition of the Partnership Interests have not been registered under the 1933 Act and that any public offering or sale or other transfer or disposition by the Holder of any of the Stock will, under current law, require either (i) compliance with Rule 144 promulgated by the Commission under the 1933 Act, (ii) the registration under the 1933 Act of the Stock to be offered and sold, or (iii) the availability of another exemption from such registration under the 1933 Act. 6. Conditions Precedent to Registration. The Company's obligations under this Agreement to effect the registration of any Registrable Securities are subject to the agreement to and the performance by the Holders of such Registrable Securities of the obligations of such Holders contained in this Agreement. Unless a Holder shall, if requested by the Company, complete, execute and deliver all agreements, questionnaires, indemnities and other documents customary in a proposed registration or deemed necessary by the Company to evidence such Holder's agreements and obligation under this Agreement, the Company will have no obligation to register such Holder's Registrable Securities. 9 10 7. Notices. Any notice or other communication required or permitted to be given hereunder shall be in writing and shall be effective (a) upon hand delivery or delivery by telecopy (with correct answer back received), telecopy or facsimile at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the first business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual service, fully prepaid, addressed to such address, or upon actual receipt of such mailing whichever shall first occur. The addresses for such communications shall be: If to the Company: Regal Cinemas, Inc. 7132 Commercial Park Drive Knoxville, TN 37918 Telecopy: (423) 922-6085 with a copy to: Wagner, Myers & Sanger, P.C. 1801 Plaza Tower Knoxville, TN 37929 Attention: Herbert S. Sanger, Jr., Esq. Bass, Berry & Sims PLC 1st American Center, 27th Floor Nashville, TN 37238 Telecopy: (615) 742-6298 Attention: F. Mitchell Walker, Jr., Esq. If to a Holder, to the address of such Holder shown on the stock ledger books of the Company. with a copy to: Sirote & Permutt 222 Arlington Avenue South Birmingham, Alabama 35205 Attention: David M. Wooldridge and 10 11 A. V. LaRocca, CPA LaRocca & Co., P.C. 2101 Highland Avenue, South, Suite 500 Birmingham, AL 35205 The Company may from time to time change its address for notices under this Section 7 by giving at least 10 days' written notice of such changed address to each of the Holders. Each Holder may from time to time change its address for notices under this Section 7 by giving at least 10 days' written notice of such changed address to the Company. 9. Heading. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof. 10. Binding Effect; Amendments. This Agreement shall be binding upon and inure to the benefit of the Company and the Holders; provided, however, that the Company may amend, modify, or supplement this Agreement at any time without the consent of the Holders if it determines that such action is in the best interests of the Company and its shareholders as a whole. 11. No Third Party Beneficiaries; No Assignment. This Agreement is intended for the benefit of the Company and the Holders and is not for the benefit of, nor may any provision hereof be enforced by, any other person. The rights of the Holders hereunder are not assignable. 12. Expiration Date. This Agreement shall expire on July 31, 1999. 13. Governing Law. Upon acceptance by the Holders, this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of Tennessee without regard to the principles of conflicts of laws. IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by its authorized officer and the Holders have executed this Agreement, each as of the date hereof. REGAL CINEMAS, INC. By:________________________________________ Name:______________________________________ Title:_____________________________________ 11 12 HOLDERS: _____________________________________________ Rowland C. Cobb, Jr. _____________________________________________ Jefferson R. Cobb _____________________________________________ Robert M. Cobb JEFFERSON R. COBB REVOCABLE MANAGEMENT TRUST By:__________________________________________ Name:________________________________________ Title:_______________________________________ ROBERT M. COBB REVOCABLE MANAGEMENT TRUST By:__________________________________________ Name:________________________________________ Title:_______________________________________ COBB THEATRES, L.L.C. By:__________________________________________ Name:________________________________________ Title:_______________________________________ 12 EX-4.11 5 FOURTH SUPPLEMENTAL INDENTURE 1 Exhibit 4.11 REGAL CINEMAS, INC. COBB FINANCE CORP. R.C. COBB, INC. COBB THEATRES II, INC. --------------- 10 5/8% SENIOR SECURED NOTES DUE 2003 -------------- FOURTH SUPPLEMENTAL INDENTURE --------------- DATED AS OF AUGUST 28, 1997 --------------- SUPPLEMENTING INDENTURE DATED AS OF MARCH 6, 1996 --------------- IBJ SCHRODER BANK & TRUST COMPANY --------------- TRUSTEE 2 FOURTH SUPPLEMENTAL INDENTURE, dated as of August 28, 1997 (the "Fourth Supplemental Indenture"), among REGAL CINEMAS, INC., a Tennessee corporation (the "Company"), COBB FINANCE CORP., an Alabama corporation ("Finance Corp.," and together with the Company, the "Issuers"), R.C. COBB, INC. an Alabama corporation ("R.C. Cobb"), COBB THEATRES II, INC. ("Cobb Theatres II," and together with R.C. Cobb, the "Guarantors"), and IBJ SCHRODER BANK & TRUST COMPANY, a New York banking corporation, as trustee (the "Trustee"). WHEREAS, the Issuers and the Guarantors have executed and delivered to the Trustee that certain Indenture dated as of March 6, 1996 among the Issuers, the Guarantors and the Trustee (the "Original Indenture"), as amended by that certain First Supplemental Indenture dated August 30, 1996 (the "First Supplemental Indenture"), by that certain Second Supplemental Indenture dated July 30, 1997 (the "Second Supplemental Indenture") and by that certain Third Supplemental Indenture dated July 31, 1997 (the "Third Supplemental Indenture") (the Original Indenture as amended by the First Supplemental Indenture, the Second Supplemental Indenture, the Third Supplemental Indenture and this Fourth Supplemental Indenture being herein referred to as the "Indenture"); and WHEREAS, there have been issued and are now outstanding under the Indenture $85,000,000 principal amount of 10 5/8% New Senior Secured Notes due 2003 (the "Notes"); and WHEREAS, pursuant to an Agreement and Plan of Merger dated June 11, 1997 among the Company, Regal Acquisition Corporation, RAC Corporation, RAC Finance Corp., Cobb Theatres, L.L.C., R. C. Cobb, Cobb Theatres II, Finance Corp. and Tricob Partnership, the Company acquired all of the issued and outstanding shares of stock of Finance Corp., R. C. Cobb and Cobb Theatres II (collectively, the "Subsidiaries"); and WHEREAS, in connection with the mergers, the Company assumed all the obligations of Cobb Theatres, L.L.C. under the Indenture; and WHEREAS, Section 4.15 of the Indenture provides that upon a Change of Control, the Company shall, within ten (10) days following a Change of Control, make an offer for the purchase of the Notes at a price payable in cash equal to 101% of the principal amount thereof plus accrued and unpaid interest and Liquidated Damages, if any, thereon until the date of purchase; and WHEREAS, the Company has offered to purchase the Notes for cash, upon the terms and conditions set forth in an Offer to Purchase and Consent Solicitation Statement dated as of August 14, 1997 (the "Statement") from all of the Holders thereof, at a purchase price determined as set forth in the Statement with reference to a fixed spread of 50 basis points over the yield to maturity of the United States Treasury 7 1/8% Notes due February 24, 2000 (of which an amount equal to 1% of the principal amount of each Note purchased shall constitute a consent payment that will 2 3 only be paid for Notes tendered on or prior to the Consent Date (as defined in the Statement)) plus accrued and unpaid interest up to, but not including the date of payment (the "Tender Offer"); and WHEREAS, in connection with the Tender Offer, the Company also solicited consents for certain proposed amendments to the Indenture to eliminate or amend certain of the covenants and other provisions contained in the Indenture; and WHEREAS, Holders who validly tender their Notes are deemed to acknowledge and agree that the Tender Offer constitutes a waiver of the Holders' right to receive, and satisfies the obligation of the Company to provide, a Change of Control Offer, pursuant to Section 4.15 of the Indenture; and WHEREAS, Section 9.03 of the Indenture provides, in relevant part, that the Issuers, the Guarantors and the Trustee may enter into indentures supplemental to the Indenture with the consent of at least 66 2/3% in principal amount of Notes outstanding to, among other things, delete and/or amend certain provisions of the Indenture, such consent having been obtained in connection with the above-described consent solicitation; and WHEREAS, all things necessary to make this Fourth Supplemental Indenture a valid and binding supplemental indenture and agreement according to its terms have been done. NOW THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company, Finance Corp., the Guarantors and the Trustee covenant and agree as follows: ARTICLE ONE DEFINITIONS SECTION 101. Definition of Terms. Unless the context otherwise requires: (a) a term defined in the Original Indenture has the same meaning when used in this Fourth Supplemental Indenture unless otherwise defined herein (in which case the definition set forth herein shall govern); (b) a term defined anywhere in this Fourth Supplemental Indenture has the same meaning throughout; (c) the singular includes the plural and vice versa; and (d) headings are for convenience of reference only and do not affect interpretation. 3 4 ARTICLE TWO AMENDMENT SECTION 201. Deletion of Certain Provisions. Pursuant to the terms of the Statement, and the consent of 66 2/3% of the Holders having been obtained by the Company, the Indenture is hereby amended to delete the following sections in their entirety and any and all references to such sections shall be deleted throughout the Indenture: (a) Section 3.09 -- Offer to Purchase by Application of Excess Proceeds. (b) Section 4.03 -- Reports. (c) Section 4.07 -- Restricted Payments. (d) Section 4.08 -- Dividend and Other Payment Restrictions Affecting Subsidiaries. (e) Section 4.09 -- Incurrence of Indebtedness and Issuance of Disqualified Interests. (f) Section 4.10 -- Asset Sales. (g) Section 4.12 -- Transactions with Affiliates. (h) Section 4.13 -- Liens. (i) Section 4.14 -- Continued Existence. (j) Section 4.15 -- Offer to Repurchase Upon Change of Control. (k) Section 4.16 -- Additional Subsidiary Guarantees. (l) Section 4.17 -- Limitation on Issuances and Sales of Equity Interests of Wholly Owned Subsidiaries. (m) Section 4.18 -- Business Activities. (n) Section 4.19 -- Advances to Subsidiaries. (o) Section 4.20 -- Restriction on Nature of Indebtedness and Activities of Finance Corp. 4 5 (p) Section 4.21 -- Restriction on Indirect Subsidiaries. (q) Section 5.01 -- Merger, Consolidation, or Sale of Assets. SECTION 202. Amendment of Article 10. Article 10 of the Indenture is hereby deleted in its entirety and any and all references to Article 10 (or any Section therein) is hereby deleted throughout the Indenture. The Trustee and the Collateral Agent are hereby authorized to release the Collateral Documents and all Collateral held pursuant thereto. In connection therewith, the Trustee shall instruct the Collateral Agent to release the Liens. SECTION 203. Amendment of Article 11. Article 11 of the Indenture in hereby deleted in its entirety and any and all references to Article 11 (or any Section therein) is hereby deleted throughout the Indenture, and the Trustee is hereby authorized to release the Subsidiary Guarantee executed by each of the Guarantors. SECTION 204. Deletion of Certain Definitions. In connection with the amendment or deletion of the Sections referenced in Sections 201, 202 and 203 hereof, Article 1 of the Indenture is hereby amended to delete the following definitions in their entirety and delete reference to them throughout the Indenture: (a) "Acquired Indebtedness"; (b) "Affiliate Transaction"; (c) "Approved Theatre Swap"; (d) "Asset Sale"; (e) "Asset Sale Offer"; (f) "Capital Lease Obligation"; (g) "Cash Equivalents"; (h) "Change of Control"; (i) "Change of Control Offer"; 5 6 (j) "Change of Control Payment"; (k) "Change of Control Payment Date"; (l) "Collateral"; (m) "Collateral Agent"; (n) "Collateral Documents"; (o) "Consolidated Net Income"; (p) "Consolidated Cash Flow"; (q) "Consolidated Net Worth"; (r) "Disqualified Interests"; (s) "Existing Indebtedness"; (t) "Existing Tricob Contracts"; (u) "Fixed Charges"; (v) "Fixed Charge Coverage Ratio"; (w) "Guarantors"; (x) "Guarantee"; (y) "Headquarters Lease"; (z) "Hedging Obligations"; (aa) "Indebtedness"; (bb) "Lien"; (cc) "Obligations"; (dd) "Operating Agreement"; (ee) "Net Income"; 6 7 (ff) "Net Proceeds"; (gg) "Permitted Investments"; (hh) "Permitted Liens"; (ii) "Permitted Refinancing Indebtedness"; (jj) "Restricted Investment"; (kk) "Restricted Payments"; (ll) "Sipsey River Contract"; (mm) "Subsidiary Guaranties"; and (nn) "Subsidiary Intercompany Notes". SECTION 206. Amendment of Section 6.01. In connection with the amendment or deletion of certain covenants in the Indenture pursuant to Sections 201, 202 and 203 hereof, Section 6.01 of the Indenture, which sets forth certain events constituting a default under the Indenture, is hereby amended as follows: (a) Subsection (a) is hereby amended to delete "or the Guarantors" in the first line. (b) Subsection (b) is hereby amended to delete "or the Guarantors" in the first line. (c) Subsection (c) is hereby deleted in its entirety. (d) Subsection (d) is hereby deleted in its entirety and replaced with the following: "(d) the Issuers fail to observe or perform any other covenant, representation, warranty or other agreement in this Indenture or the Notes and the Default continues for the period and after the notice specified below;" (e) Subsection (g) is hereby deleted in its entirety; (f) Subsection (h) is hereby amended to delete "any Guarantor" in the first line. (g) Subsection (j) is hereby deleted in its entirety. 7 8 SECTION 207. Change of Control Offer. Holders who validly tender their Notes pursuant to the terms of the Tender Offer are deemed to acknowledge and agree that the Tender Offer constitutes a waiver of the Holders' right to receive, and satisfies the obligation of the Company to provide, a Change of Control Offer, pursuant to Section 4.15 of the Indenture. SECTION 208. Name of Notes. The Notes shall hereafter be referred to as "10 5/8% Notes due 2003." SECTION 209. Governing Law. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS FOURTH SUPPLEMENTAL INDENTURE, THE INDENTURE, THE NOTES AND THE GUARANTEES. SECTION 210. Effectiveness. Provided that this Fourth Supplemental Indenture has been executed by all parties hereto and a fully-executed copy has been delivered to the Trustee, the provisions of this Fourth Supplemental Indenture will take effect upon the acceptance by the Company of all Notes validly tendered (and not withdrawn) pursuant to the Tender Offer. SECTION 211. Reaffirmation of Indenture. Except as supplemented by this Fourth Supplemental Indenture, the Original Indenture as supplemented by the First Supplemental Indenture, the Second Supplemental Indenture and the Third Supplemental Indenture is in all respects ratified and confirmed, and the Original Indenture as supplemented by the First Supplemental Indenture, the Second Supplemental Indenture, the Third Supplemental Indenture and this Fourth Supplemental Indenture shall be read, taken and construed as one and the same instrument so that all of the rights, remedies, terms and conditions, covenants and agreements of the Original Indenture, as amended, shall apply and remain in full force and effect. 8 9 IN WITNESS WHEREOF, the parties hereto have caused this Fourth Supplemental Indenture to be duly executed, and their respective corporate seals to be hereunto affixed and attested, all as of the day and year first above written. REGAL CINEMAS, INC. By:____________________________________ Name: Title: Attest: By:_____________________________ Name: Title: COBB FINANCE CORP. By:____________________________________ Name: Title: Attest: By:_____________________________ Name: Title: R.C. COBB, INC. By:____________________________________ Name: Title: Attest: By:_____________________________ Name: Title: 9 10 COBB THEATRES II, INC. By:____________________________________ Name: Title: Attest: By:_____________________________ Name: Title: IBJ SCHRODER BANK & TRUST COMPANY, INC., as Trustee By:____________________________________ Name: Title: Attest: By:_____________________________ Name: Title: 10 EX-5.1 6 OPINION OF BASS BERRY & SIMS PLC 1 Exhibit 5.1 B A S S, B E R R Y & S I M S P L C A PROFESSIONAL LIMITED LIABILITY COMPANY ATTORNEYS AT LAW 2700 FIRST AMERICAN CENTER 1700 RIVERVIEW TOWER NASHVILLE, TENNESSEE 37238-2700 POST OFFICE BOX 1509 TELEPHONE (615) 742-6200 KNOXVILLE, TENNESSEE 37901-1509 TELECOPIER (615) 742-6293 TELEPHONE (423) 521-6200 TELECOPIER (423) 521-6234 November 12, 1997 Regal Cinemas, Inc. 7132 Commercial Park Drive Knoxville, Tennessee 37918 Re: REGISTRATION STATEMENT ON FORM S-4 Ladies and Gentlemen: We have acted as your counsel in connection with your preparation of a Registration Statement on Form S-4 (the "Registration Statement") to be filed by you with the Securities and Exchange Commission (the "Commission") on November 12, 1997, with respect to $125,000,000 aggregate principal amount of 8 1/2% Exchange Senior Subordinated Notes due October 1, 2007 (the "Exchange Notes") of Regal Cinemas, Inc. (the "Company"). The Exchange Notes will be offered in exchange for the Company's issued and outstanding 8 1/2% Senior Subordinated Notes due October 1, 2007 (the "Old Notes"), as described in the Registration Statement. The Exchange Notes are to be issued pursuant to the terms of an indenture (the "Indenture") dated September 24, 1997 between the Company and IBJ Schroder Bank & Trust Company, as trustee (the "Trustee"), and the related Exchange and Registration Rights Agreement among the Company, Goldman Sachs & Co. and Lehman Brothers Inc. (the "Registration Rights Agreement"). In connection with this opinion, we have examined and relied upon such records, documents, certificates, and other instruments as in our judgment are necessary or appropriate in order to express the opinions hereinafter set forth and have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals, and the conformity to original documents of all documents submitted to us as certified or photostatic copies. Based on the foregoing and such other matters as we have deemed relevant, we are of the opinion that the Exchange Notes, when duly executed and authenticated in accordance with the terms of the Indenture, and delivered in exchange for Old Notes in accordance with the terms of the Indenture, will have been validly issued and will be legally binding obligations of the Company. We hereby consent to the reference to our law firm in the Registration Statement under the caption "Legal Matters" and filing of this opinion with the Commission as Exhibit 5 to the Registration Statement. Very truly yours, /s/ Bass, Berry & Sims PLC EX-21 7 SUBSIDIARIES OF THE REGISTRANT 1 EXHIBIT 21 SUBSIDIARIES OF THE REGISTRANT Regal Investment Company, a Delaware corporation R.C. Cobb, Inc., an Alabama corporation Cobb Theatres II, Inc., an Alabama corporation Cobb Finance Corp., an Alabama corporation EX-23.1 8 INDEPENDENT AUDITORS CONSENT 1 Exhibit 23.1 CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS We consent to the reference to our firm under the caption "Experts" and to the incorporation by reference in this Registration Statement (Form S-4) and related Prospectus of Regal Cinemas, Inc. for the registration of $125,000,000 of its senior subordinated notes of our report dated July 2, 1997, with respect to the consolidated financial statements of Cobb Theatres, L.L.C. for the year ended December 31, 1996 included in the Current Report on Form 8-K/A (Amendment No. 1) of Regal Cinemas, Inc. and to the incorporation by reference therein of our report dated October 23, 1996, with respect to the consolidated financial statements of Cobb Theatres, L.L.C. for the years ended August 31, 1996 and 1995 included in the Annual Report (Form 10-K) for the year ended August 31, 1996 of Cobb Theatres, L.L.C., filed with the Securities and Exchange Commission. /s/ Ernst & Young LLP Birmingham, Alabama November 6, 1997 EX-23.2 9 INDEPENDENT AUDITORS CONSENT 1 Exhibit 23.2 CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS We consent to the reference to our firm under the caption "Experts" in this Registration Statement (Form S-4) and related Prospectus of Regal Cinemas, Inc. for the registration of $125,000,000 of its senior subordinated notes and to the incorporation by reference therein of our report dated March 21, 1995 (with respect to the financial statements of Neighborhood Entertainment, Inc. not separately presented), included in the Current Report on Form 8-K/A dated September 10, 1997 of Regal Cinemas, Inc. filed with the Securities and Exchange Commission. /s/ Ernst & Young LLP Richmond, Virginia November 7, 1997 EX-23.3 10 CONSENT OF INDEPENDENT AUDITORS 1 Exhibit 23.3 CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in the registration statement of Regal Cinemas, Inc. on Form S-4 of our report dated November 15, 1994, (with respect to the consolidated financial statements of Cobb Theatres, L.L.C. not separately presented) appearing in Regal Cinemas, Inc. Current Report on Form 8 K/A dated September 10, 1997 filed with the Securities and Exchange Commission. We also consent to the reference of our firm under the caption "Experts." /s/ LaRocca & Co., P.C. LAROCCA & CO., P. C. Birmingham, Alabama November 7, 1997 EX-23.4 11 INDEPENDENT AUDITORS CONSENT 1 Exhibit 23.4 CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in the registration statement of Regal Cinemas, Inc. on Form S-4 of our report dated February 6, 1997, except for the combination with Cobb Theatres, L.L.C. ("Cobb Theatres") described in Note 1 as to which the date is July 31, 1997, on our audits of the supplemental consolidated financial statements of Regal Cinemas, Inc. as of December 28, 1995 and January 2, 1997, and for each of the three years in the period ended January 2, 1997, which report is included in Regal Cinemas, Inc. Current Report on Form 8-K/A, dated September 10, 1997. The supplemental consolidated financial statements give retroactive effect to the acquisitions of Cobb Theatres and Neighborhood Entertainment, Inc. ("Neighborhood"), which have been accounted for as poolings of interests. We also consent to the incorporation by reference in this registration statement of our report dated February 6, 1997, on our audits of the consolidated financial statements of Regal Cinemas, Inc. as of December 28, 1995 and January 2, 1997, and for each of the three years in the period ended January 2, 1997, which report is included in the Annual Report on Form 10-K of Regal Cinemas, Inc. for the year ended January 2, 1997, filed with the Securities and Exchange Commission. We also consent to the reference of our firm under the caption "Experts." /s/ Coopers & Lybrand L.L.P. COOPERS & LYBRAND L.L.P. Knoxville, Tennessee November 7, 1997 EX-25 12 FORM T-1 1 Exhibit 25 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 ---------- FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(B)(2) ---------- IBJ SCHRODER BANK & TRUST COMPANY (Exact name of trustee as specified in its charter) New York 13-5375195 (Jurisdiction of incorporation (I.R.S. Employer or organization if not a U.S. national bank) Identification No.) One State Street, New York, New York 10004 (Address of principal executive offices) (Zip code) IBJ SCHRODER BANK & TRUST COMPANY One State Street New York, New York 10004 (212) 858-2000 (Name, address and telephone number of agent for service) REGAL CINEMAS,INC. (Exact name of obligor as specified in its charter) Tennessee 62-1412720 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 7132 Commercial Park Drive Knoxville, Tennessee 37918 (Address of principal executive offices) (Zip code) ---------- 8 1/2% SENIOR SUBORDINATED NOTES DUE OCTOBER 1, 2007 (Title of indenture securities) - -------------------------------------------------------------------------------- 2 Item 1. General information Furnish the following information as to the trustee: (a) Name and address of each examining or supervising authority to which it is subject. New York State Banking Department Two Rector Street, New York, New York Federal Deposit Insurance Corporation Washington, D.C. Federal Reserve Bank of New York Second District 33 Liberty Street New York, New York (b) Whether it is authorized to exercise corporate trust powers. Yes Item 2. Affiliations with the Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. The obligor is not an affiliate of the trustee. Defaults by the Obligor. (a) State whether there is or has been a default with respect to the securities under this indenture. Explain the nature of any such default. None (b) If the trustee is a trustee under another indenture under which any other securities, or certificates of interest or participation in any other securities, of the obligor are outstanding, or is trustee for more than one outstanding series of securities under the indenture, state whether there has been a default under any such indenture or series, identify the indenture or series affected, and explain the nature of any such default. None Item 13. Defaults by the Obligor. 3 (a) State whether there is or has been a default with respect to the securities under this indenture. Explain the nature of any such default. None (b) If the trustee is a trustee under another indenture under which any other securities, or certificates of interest or participation in any other securities, of the obligor are outstanding, or is trustee for more than one outstanding series of securities under the indenture, state whether there has been a default under any such indenture or series, identify the indenture or series affected, and explain the nature of any such default. Not Applicable Item 16. LIST OF EXHIBITS. List below all exhibits filed as part of this statement of eligibility. *1. A copy of the Charter of IBJ Schroder Bank & Trust Company as amended to date. (See Exhibit 1A to Form T-1, Securities and Exchange Commission File No. 22-18460). *2. A copy of the Certificate of Authority of the trustee to Commence Business (Included in Exhibit 1 above). *3. A copy of the Authorization of the trustee to exercise corporate trust powers, as amended to date (See Exhibit 4 to Form T-1, Securities and Exchange Commission File No. 22-19146). *4. A copy of the existing By-Laws of the trustee, as amended to date (See Exhibit 4 to Form T-1, Securities and Exchange Commission File No. 22-19146). 5. Not Applicable 6. The consent of United States institutional trustee required by Section 321(b) of the Act. 7. A copy of the latest report of condition of the trustee published pursuant to law or the requirements of its supervising or examining authority. 4 * The Exhibits thus designated are incorporated herein by reference as exhibits hereto. Following the description of such Exhibits is a reference to the copy of the Exhibit heretofore filed with the Securities and Exchange Commission, to which there have been no amendments or changes. NOTE In answering any item in this Statement of Eligibility which relates to matters peculiarly within the knowledge of the obligor and its directors or officers, the trustee has relied upon information furnished to it by the obligor. Inasmuch as this Form T-1 is filed prior to the ascertainment by the trustee of all facts on which to base responsive answers to Item 2, the answer to said Item are based on incomplete information. Item 2, may, however, be considered as correct unless amended by an amendment to this Form T-1. Pursuant to General Instruction B, the trustee has responded to Items 1, 2 and 16 of this form since to the best knowledge of the trustee, the obligor is not in default under any indenture under which the applicant is trustee. 5 SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939, the trustee, IBJ Schroder Bank & Trust Company, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York, and State of New York, on the 5th day of November, 1997. IBJ SCHRODER BANK & TRUST COMPANY By: /s/ Stephen J. Giurlando -------------------------------- Stephen J. Giurlando Assistant Vice President 6 EXHIBIT 6 CONSENT OF TRUSTEE Pursuant to the requirements of Section 321(b) of the Trust Indenture Act of 1939, as amended, in connection with the issue by Regal Cinemas, Inc. of its 8 1/2% Senior Subordinated Notes due October 1, 2007, we hereby consent that reports of examinations by Federal, State, Territorial, or District authorities may be furnished by such authorities to the Securities and Exchange Commission upon request therefor. IBJ SCHRODER BANK & TRUST COMPANY By: /s/ Stephen J. Giurlando -------------------------------- Stephen J. Giurlando Assistant Vice President Dated: November 5, 1997 7 EXHIBIT 7 CONSOLIDATED REPORT OF CONDITION OF IBJ SCHRODER BANK & TRUST COMPANY OF NEW YORK, NEW YORK AND FOREIGN AND DOMESTIC SUBSIDIARIES REPORT AS OF JUNE 30, 1997
DOLLAR AMOUNTS IN THOUSANDS -------------- ASSETS Cash and balance due from depository institutions: Noninterest-bearing balances and currency and coin ............................................$ 41,319 Interest-bearing balances........................................................................$ 314,579 Securities: Held-to-maturity securities...........................................................$ 180,111 Available-for-sale securities.........................................................$ 47,600 Federal funds sold and securities purchased under agreements to resell in domestic offices of the bank and of its Edge and Agreement subsidiaries and in IBFs: Federal Funds sold and Securities purchased under agreements to resell...........................$ 694,859 Loans and lease financing receivables: Loans and leases, net of unearned income.......................................$ 1,955,686 LESS: Allowance for loan and lease losses......................................$ 62,876 LESS: Allocated transfer risk reserve..........................................$ -0- Loans and leases, net of unearned income, allowance, and reserve.................................$ 1,892,810 Trading assets held in trading accounts..............................................................$ 603 Premises and fixed assets (including capitalized leases).............................................$ 3,709 Other real estate owned..............................................................................$ 202 Investments in unconsolidated subsidiaries and associated companies..................................$ -0- Customers' liability to this bank on acceptances outstanding.........................................$ 81 Intangible assets....................................................................................$ -0- Other assets.........................................................................................$ 67,092 TOTAL ASSETS.........................................................................................$ 3,242,965
8 LIABILITIES Deposits: In domestic offices.............................................................................$ 1,694,675 Noninterest-bearing ......................................................$ 263,641 Interest-bearing .........................................................$ 1,431,034 In foreign offices, Edge and Agreement subsidiaries, and IBFs...................................$ 1,121,075 Noninterest-bearing ......................................................$ 17,535 Interest-bearing .........................................................$ 1,103,540 Federal funds purchased and securities sold under agreements to repurchase in domestic offices of the bank and of its Edge and Agreement subsidiaries, and in IBFs: Federal Funds purchased and Securities sold under agreements to repurchase......................$ 25,000 Demand notes issued to the U.S. Treasury............................................................$ 60,000 Trading Liabilities.................................................................................$ 140 Other borrowed money: a) With a remaining maturity of one year or less................................................$ 38,369 b) With a remaining maturity of more than one year..............................................$ 1,763 c) With a remaining maturity of more than three years...........................................$ 2,242 Bank's liability on acceptances executed and outstanding............................................$ 81 Subordinated notes and debentures...................................................................$ -0- Other liabilities...................................................................................$ 69,908 TOTAL LIABILITIES...................................................................................$ 3,013,253 Limited-life preferred stock and related surplus....................................................$ -0- EQUITY CAPITAL Perpetual preferred stock and related surplus.......................................................$ -0- Common stock........................................................................................$ 29,649 Surplus (exclude all surplus related to preferred stock)............................................$ 217,008 Undivided profits and capital reserves..............................................................$ (17,000) Net unrealized gains (losses) on available-for-sale securities......................................$ 55 Cumulative foreign currency translation adjustments.................................................$ -0- TOTAL EQUITY CAPITAL................................................................................$ 229,712 TOTAL LIABILITIES AND EQUITY CAPITAL................................................................$ 3,242,965
EX-99.1 13 LETTER OF TRANSMITTAL 1 EXHIBIT 99.1 LETTER OF TRANSMITTAL FOR 8 1/2% SENIOR SUBORDINATED NOTES OF REGAL CINEMAS, INC. PURSUANT TO THE EXCHANGE OFFER IN RESPECT OF ALL OF ITS OUTSTANDING 8 1/2% SENIOR SUBORDINATED NOTES DUE OCTOBER 1, 2007 FOR 8 1/2% EXCHANGE SENIOR SUBORDINATED NOTES DUE OCTOBER 1, 2007 PURSUANT TO THE PROSPECTUS DATED , 1997 THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON , 1997 UNLESS THE EXCHANGE OFFER IS EXTENDED (THE "EXPIRATION DATE"). TENDERS OF OLD NOTES MAY BE WITHDRAWN AT ANY TIME PRIOR TO 5:00 P.M. ON THE BUSINESS DAY PRIOR TO THE EXPIRATION DATE. To: IBJ Schroder Bank & Trust Company as Exchange Agent By Registered or Certified Mail: By Facsimile Transmission: By Hand/Overnight Delivery: (For Eligible Institutions Only) IBJ Schroder Bank & Trust Company (212) 858-2611 IBJ Schroder Bank & Trust Company P.O. Box 84 One State Street Plaza Bowling Green Station Confirm by Telephone: New York, New York 10004 New York, New York 10274-0084 (212) 858-2103 Attention: Securities Processing Attention: Reorganization Operations Department Floor SC-1
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION VIA FACSIMILE, OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS CONTAINED HEREIN SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. HOLDERS WHO WISH TO BE ELIGIBLE TO RECEIVE EXCHANGE NOTES FOR THEIR OLD NOTES PURSUANT TO THE EXCHANGE OFFER MUST VALIDLY TENDER (AND NOT WITHDRAW) THEIR OLD NOTES TO THE EXCHANGE AGENT PRIOR TO THE EXPIRATION DATE. By execution hereof, the undersigned acknowledges receipt of the Prospectus (the "Prospectus"), dated , 1997, of Regal Cinemas, Inc., a Tennessee corporation (the "Company"), which, together with this Letter of Transmittal and the instructions hereto (the "Letter of Transmittal"), constitute the Company's offer (the "Exchange Offer") to exchange $1,000 principal amount of its 8 1/2% Exchange Senior Subordinated Notes due October 1, 2007 (the "Exchange Notes") that have been registered under the Securities Act of 1933, as amended (the "Securities Act"), pursuant to a Registration Statement of which the Prospectus constitutes a part, for each $1,000 principal amount of its outstanding 8 1/2% Senior Subordinated Notes due October 1, 2007 (the "Old Notes"), upon the terms and subject to the conditions set forth in the Prospectus. This Letter of Transmittal is to be used by Holders if: (i) certificates representing Old Notes are to be physically delivered to the Exchange Agent herewith by Holders, (ii) tender of Old Notes is to be made through the Authorized Tender Offer Program ("ATOP") System at The Depository Trust Company ("DTC") pursuant to the procedures set forth in the Prospectus under "The Exchange Offer -- Procedures 2 for Tendering" and "-- Book Entry Transfer;" or (iii) tender of Old Notes is to be made according to the guaranteed delivery procedures set forth in the Prospectus under "The Exchange Offer -- Procedures for Tendering." DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT. Unless the context otherwise requires, the term "Holder" with respect to the Exchange Offer means any person: (i) in whose name Old Notes are registered on the books of the Company or any other person who has obtained a properly completed bond power from the registered Holder; or (ii) whose Old Notes are held of record by DTC who desires to deliver such Old Notes by participating in the ATOP System. The undersigned has completed, executed and delivered this Letter of Transmittal to indicate the action the undersigned desires to take with respect to the Exchange Offer. Holders who wish to tender their Old Notes must complete this letter in its entirety. All capitalized terms used herein and not defined herein shall have the meaning ascribed to them in the Prospectus. The instructions included with this Letter of Transmittal must be followed. Questions and requests for assistance or for additional copies of the Prospectus, this Letter of Transmittal and the Notice of Guaranteed Delivery may be directed to the Exchange Agent. See Instruction 8 herein. HOLDERS WHO WISH TO ACCEPT THE EXCHANGE OFFER AND TENDER THEIR OLD NOTES MUST COMPLETE THIS LETTER OF TRANSMITTAL IN ITS ENTIRETY. List below the Old Notes to which this Letter of Transmittal relates. If the space provided below is inadequate, list the certificate numbers and principal amounts on a separately executed schedule and affix the schedule to this Letter of Transmittal. Tenders of Old Notes will be accepted only in principal amounts equal to $1,000 or integral multiples thereof.
- --------------------------------------------------------------------------------------------------------- DESCRIPTION OF OLD NOTES TENDERED HEREBY - --------------------------------------------------------------------------------------------------------- CERTIFICATE OR PRINCIPAL REGISTRATION AMOUNT NUMBER(S) TENDERED* NAME(S) AND ADDRESS(ES) OF HOLDER(S) (ATTACH SIGNED LIST IF (IF LESS THAN (PLEASE FILL IN) NECESSARY) ALL) - --------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------- TOTAL PRINCIPAL AMOUNT OF OLD NOTES TENDERED - --------------------------------------------------------------------------------------------------------- * Need not be completed by Holders who wish to tender with respect to all Old Notes listed. See Instruction 2. - ---------------------------------------------------------------------------------------------------------
2 3 If Holders desire to tender Old Notes pursuant to the Exchange Offer and (i) certificates representing such Old Notes are not lost but are not immediately available or (ii) time will not permit this Letter of Transmittal, certificates representing such Old Notes or other required documents to reach the Exchange Agent prior to the Expiration Date, such Holders may effect a tender of such Old Notes in accordance with the guaranteed delivery procedures set forth in the Prospectus under "The Exchange Offer -- Procedures for Tendering." [ ] CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY DELIVERED TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING: Name(s) of Holder(s) of Old Notes: --------------------------------------------------------------------------- Window Ticker No. (if any): --------------------------------------------------------------------------- Date of Execution of Notice of Guaranteed Delivery: --------------------------------------------------------------------------- Name of Eligible Institution that Guaranteed Delivery: --------------------------------------------------------------------------- [ ] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO. Name: --------------------------------------------------------------------------- Address: --------------------------------------------------------------------------- 3 4 Gentlemen: Subject to the terms of the Exchange Offer, the undersigned hereby tenders to the Company the principal amount of Old Notes indicated above. Subject to and effective upon the acceptance for exchange of the principal amount of Old Notes tendered in accordance with this Letter of Transmittal, the undersigned sells, assigns and transfers to, or upon the order of, the Company all right, title and interest in and to the Old Notes tendered hereby. The undersigned hereby irrevocably constitutes and appoints the Exchange Agent its agent and attorney-in-fact (with full knowledge that the Exchange Agent also acts as the agent of the Company and as Trustee under the Indenture for the Old Notes and the Exchange Notes) with respect to the tendered Old Notes with full power of substitution to (i) deliver certificates for such Old Notes to the Company, or transfer ownership of such Old Notes on the account books maintained by DTC, together in either such case, with all accompanying evidences of transfer and authenticity to, or upon the order of, the Company and (ii) present such Old Notes for transfer on the books of the Company and receive all benefits and otherwise exercise all rights of beneficial ownership of such Old Notes, all in accordance with the terms of the Exchange Offer. The power of attorney granted in this paragraph shall be deemed irrevocable and coupled with an interest. The undersigned hereby represents and warrants that he or she has full power and authority to tender, sell, assign and transfer the Old Notes tendered hereby and that the Company will acquire good and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claim, when the same are acquired by the Company. The undersigned also acknowledges that this Exchange Offer is being made in reliance upon an interpretation by the staff of the Securities and Exchange Commission that the Exchange Notes issued in exchange for the Old Notes pursuant to the Exchange Offer may be offered for sale, resold and otherwise transferred by holders thereof (other than any such holder that is an "affiliate" of the Company within the meaning of Rule 405 under the Securities Act) without compliance with the registration and prospectus delivery provisions of the Securities Act provided that such Exchange Notes are acquired in the ordinary course of such holders' business and such holders have no arrangement with any person to participate in the distribution of such Exchange Notes. The undersigned represents that (i) the Exchange Notes acquired pursuant to the Exchange Offer are being obtained in the ordinary course of such holder's business, (ii) such holder has no arrangements with any person to participate in the distribution of such Exchange Notes and (iii) such holder is not an "affiliate," as defined under Rule 405 of the Securities Act of the Company or, if such holder is an affiliate, that such holder will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable. If the undersigned is not a broker-dealer or is a broker-dealer but will not receive Exchange Notes for its own account in exchange for Old Notes, the undersigned represents that it is not engaged in, and does not intend to engage in, a distribution of Exchange Notes. If the undersigned is a broker-dealer that will receive Exchange Notes for its own account in exchange for Old Notes, it represents that the Old Notes to be exchanged for Exchange Notes were acquired by it as a result of market-making activities or other trading activities and acknowledges that it will deliver a prospectus meeting the requirements of the Securities Act of 1933, as amended, in connection with any resale of such Exchange Notes acquired pursuant to the Exchange Offer; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. The undersigned will upon request, execute and deliver any additional documents deemed by the Exchange Agent or the Company to be necessary or desirable to complete the assignment and transfer of the Old Notes tendered hereby. For purposes of the Exchange Offer, the Company shall be deemed to have accepted validly tendered Old Notes when, and if, the Company has given oral or written notice thereof to the Exchange Agent. If any tendered Old Notes are not accepted for exchange pursuant to the Exchange Offer for any reason, certificates for any such unaccepted Old Notes will be returned (except with respect to tenders through DTC), without expense, to the undersigned at the address shown below or at a different address shown below or at a different address as may be indicated under "Special Issuance Instructions" as promptly as practicable after the Expiration Date. 4 5 All authority conferred or agreed to be conferred by this Letter of Transmittal shall survive the death, incapacity or dissolution of the undersigned and every obligation under this Letter of Transmittal shall be binding upon the undersigned's heirs, personal representatives, successors and assigns. The undersigned understands that the Company reserves the right, at any time and from time to time, in its sole discretion (subject to its obligation under the Registration Rights Agreement) (i) to delay accepting any Old Notes or to delay the issuance and exchange of Exchange Notes for Old Notes, to extend the Exchange Offer or, if any of the conditions set forth in the Prospectus under the caption "The Exchange Offer -- Conditions" shall not have been satisfied, to terminate the Exchange Offer, by giving oral or written notice of such delay, extension or termination to the Exchange Agent or (ii) to amend the terms of the Exchange Offer in any manner. The undersigned understands that tenders of Old Notes pursuant to the procedures described under the caption "The Exchange Offer -- Procedures for Tendering" in the Prospectus and in the instructions hereto will constitute a binding agreement between the undersigned and the Company upon the terms and subject to the conditions of the Exchange Offer. Any tender of Old Notes pursuant to this Letter of Transmittal may be withdrawn only in accordance with the applicable procedures set forth herein and in the Prospectus. Unless otherwise indicated under "Special Issuance Instructions," please issue the certificates representing the Exchange Notes issued in exchange for the Old Notes accepted for exchange and return any Old Notes not tendered or not exchanged, in the name(s) of the undersigned. Similarly, unless otherwise indicated under "Special Delivery Instructions," please send the certificates representing the Exchange Notes issued in exchange for the Old Notes accepted for exchange and any certificates for Old Notes not tendered or not exchanged (and accompanying documents, as appropriate) to the undersigned at the address shown below the undersigned's signatures, unless, in either event, tender is being made through DTC. In the event that both "Special Issuance Instructions" and "Special Delivery Instructions" are completed, please issue the certificates representing the Exchange Notes issued in exchange for the Old Notes accepted for exchange and return any Old Notes not tendered or not exchanged in the name(s) of, and send said certificates to, the person(s) so indicated. The undersigned recognizes that the Company has no obligation pursuant to the "Special Issuance Instructions" and "Special Delivery Instructions" to transfer any Old Notes from the name of the registered holder(s) thereof if the Company does not accept for exchange any of the Old Notes so tendered. 5 6 SPECIAL ISSUANCE INSTRUCTIONS To be completed ONLY if the Exchange Notes are to be issued in the name of someone other than the undersigned. Name - ------------------------------------------------------- Address - ------------------------------------------------------- - ------------------------------------------------------- Book Entry Transfer Facility Account: - ------------------------------------------------------- Employer Identification or Social Security Number: - ------------------------------------------------------- (Please print or type) SPECIAL DELIVERY INSTRUCTIONS To be completed ONLY if the Exchange Notes are to be sent to someone other than the undersigned, or to the undersigned at an address other than that shown above under "Description of Old Notes Tendered Hereby." Name - ------------------------------------------------------- Address - ------------------------------------------------------- - ------------------------------------------------------- - ------------------------------------------------------- (Please print or type) 6 7 REGISTERED HOLDER(S) OF OLD NOTES SIGN HERE (In addition, complete Substitute Form W-9 below) X - -------------------------------------------------------------------------------- X - -------------------------------------------------------------------------------- (Signature(s) of Registered Holder(s)) Must be signed by registered holder(s) exactly as name(s) appear(s) on the Old Notes or on a security position listing as the owner of the Old Notes or by the person(s) authorized to become registered holder(s) by properly completed bond powers transmitted herewith. If signature is by attorney-in-fact, trustee, executor, administrator, guardian, officer of a corporation or other person acting in a fiduciary capacity, please provide the following information. (Please print or type): Name and Capacity (full title): - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Address (including zip code): - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Area Code and Telephone Number: - -------------------------------------------------------------------------------- Taxpayer Identification or Social Security No: - -------------------------------------------------------------------------------- Dated: - --------------------------- SIGNATURE GUARANTEE (If Required -- See Instruction 3) Authorized Signature: - -------------------------------------------------------------------------------- (Signature of Representative of Signature Guarantor) Name and Title: - -------------------------------------------------------------------------------- Name of Plan: - -------------------------------------------------------------------------------- Area Code and Telephone Number: - -------------------------------------------------------------------------------- Dated: - --------------------------- 7 8 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER 1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND OLD NOTES. The certificates for the tendered Old Notes (or a confirmation of a book-entry transfer into the Exchange Agent's account at DTC in case of Holders participating in the ATOP System), as well as a properly completed and duly executed copy of this Letter of Transmittal or facsimile hereof (or electronic acceptance of and agreement to this Letter of Transmittal in the case of Holders participating through the ATOP System) and any other documents required by this Letter of Transmittal must be received by the Exchange Agent at its address set forth herein prior to 5:00 p.m., New York City time, on the Expiration Date. The method of delivery of the tendered Old Notes, this Letter of Transmittal and all other required documents to the Exchange Agent is at the election and risk of the Holder and, except as otherwise provided below, the delivery will be deemed made only when actually received by the Exchange Agent. Instead of delivery by mail, it is recommended that the Holder use an overnight or hand delivery service. In all cases, sufficient time should be allowed to assure timely delivery. No Letters of Transmittal or Old Notes should be sent to the Company. Holders who wish to tender their Old Notes and (i) whose Old Notes are not immediately available or (ii) who cannot deliver their Old Notes, this Letter of Transmittal or any other documents required hereby to the Exchange Agent prior to the Expiration Date must tender their Old Notes and follow the guaranteed delivery procedures set forth in the Prospectus. Pursuant to such procedures: (i) such tender must be made by or through an Eligible Institution; (ii) prior to the Expiration Date, the Exchange Agent must have received from the Eligible Institution a properly completed and duly executed Notice of Guaranteed Delivery (by facsimile transmission, mail or hand delivery) setting forth the name and address of the Holder of the Old Notes, the certificate number or numbers of such Old Notes and the principal amount of Old Notes tendered, stating that the tender is being made thereby and guaranteeing that, within five business days after the Expiration Date, this Letter of Transmittal (or facsimile or electronic transmission thereof) together with the certificate(s) representing the Old Notes (or electronic transmission thereof) and any of the required documents will be deposited by the Eligible Institution with the Exchange Agent; and (iii) such properly completed and executed Letter of Transmittal (or facsimile hereof), as well as all other documents required by this Letter of Transmittal and the certificate(s) representing all tendered Old Notes in proper form for transfer, must be received by the Exchange Agent within five business days after the Expiration Date, all as provided in the Prospectus under the caption "The Exchange Offer -- Guaranteed Delivery Procedures." Any Holder of Old Notes who wishes to tender Old Notes pursuant to the guaranteed delivery procedures described above must ensure that the Exchange Agent receives the Notice of Guaranteed Delivery prior to 5:00 p.m., New York City time, on the Expiration Date. All questions as to the validity, form, eligibility (including time of receipt), acceptance and withdrawal of tendered Old Notes will be determined by the Company in its sole discretion, which determination will be final and binding. The Company reserves the absolute right to reject any and all Old Notes not properly tendered or any Old Notes the Company's acceptance of which would, in the opinion of counsel for the Company, be unlawful. The Company also reserves the right to waive any irregularities or conditions of tender as to particular Old Notes. The Company's interpretation of the terms and conditions of the Exchange Offer (including the instructions in this Letter of Transmittal) will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of Old Notes must be cured within such time as the Company shall determine. Neither the Company, the Exchange Agent nor any other person shall be under any duty to give notification of defects or irregularities with respect to tenders of Old Notes, nor shall any of them incur any liability for failure to give such notification. Tenders of Old Notes will not be deemed to have been made until such defects or irregularities have been cured or waived. Any Old Notes received by the Exchange Agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned without cost by the Exchange Agent to the tendering Holders of Old Notes, unless otherwise provided in this Letter of Transmittal, as soon as practicable following the Expiration Date. 8 9 2. PARTIAL TENDERS; WITHDRAWALS. Tenders of Old Notes will be accepted in all denominations of $1,000 and integral multiples in excess thereof. If less than the entire principal amount of any Old Notes is tendered, the tendering Holder should fill in the principal amount tendered in the third column of the chart entitled "Description of Old Notes Tendered Hereby." The entire principal amount of Old Notes delivered to the Exchange Agent will be deemed to have been tendered unless otherwise indicated. If the entire principal amount of all Old Notes is not tendered, Old Notes for the principal amount of Old Notes delivered to the Exchange Agent will be deemed to have been tendered unless otherwise indicated. If the entire principal amount of all Old Notes is not tendered, Old Notes for the principal amount of Old Notes not tendered and a certificate or certificates representing Exchange Notes issued in exchange of any Old Notes accepted will be sent to the Holder at his or her registered address, unless a different address is provided in the appropriate box on this Letter of Transmittal or unless tender is made through the ATOP System, promptly after the Old Notes are accepted for exchange. A tender pursuant to the Exchange Offer may be withdrawn subject to the procedures set forth in this Letter of Transmittal and the Prospectus, at any time prior to the Expiration Date, if not theretofore accepted for exchange. To withdraw a tender of Old Notes in the Exchange Offer, a written, facsimile, or where applicable, electronic transmission notice of withdrawal must be received by the Exchange Agent at its address set forth herein prior to 5:00 p.m., New York City time, on the business day prior to the Expiration Date. Any such notice of withdrawal must (i) specify the name of the person having deposited the Old Notes to be withdrawn (the "Depositor"), (ii) specify the serial numbers on the particular certificates evidencing the Old Notes to be withdrawn and the name of the registered holder thereof (if certificates have been delivered or otherwise identified to the Exchange Agent), (iii) be signed by the Holder in the same manner as the original signature on the Letter of Transmittal by which such Old Notes were tendered (including any required signature guarantees) or be accompanied by documents or transfer sufficient to have the Securities Registrar with respect to the Old Notes register the transfer of such Old Notes into the name of the person withdrawing the tender, and (iv) specify the name in which any such Old Notes are to be registered, if different from that of the Depositor, or, in the case of Holders tendering through the ATOP System, otherwise comply with the requirements of DTC. All questions as to the validity, form and eligibility (including time of receipt) of such notices will be determined by the Company in its sole discretion, which determination shall be final and binding on all parties. Any Old Notes so withdrawn will be deemed not to have been validly tendered for purposes of the Exchange Offer and no Exchange Notes will be issued with respect thereto unless the Old Notes so withdrawn are validly retendered. Properly withdrawn Old Notes may be retendered by following one of the procedures described in the Prospectus under the caption "The Exchange Offer -- Procedures for Tendering" at any time prior to the Expiration Date. 3. SIGNATURES ON THE LETTER OF TRANSMITTAL; BOND POWERS AND ENDORSEMENTS; GUARANTEE OF SIGNATURES. If this Letter of Transmittal (or facsimile hereof) is signed by the registered Holder(s) of the Old Notes tendered hereby, the signature must correspond with the name(s) as written on the face of the Old Notes without alteration, enlargement or any change whatsoever. If this Letter of Transmittal (or facsimile hereof) is signed by the registered Holder(s) of Old Notes tendered and the certificate(s) for Exchange Notes issued in exchange therefor is to be issued (or any untendered principal amount of Old Notes is to be reissued) to the registered Holder, such Holder need not and should not endorse any tendered Old Note, nor provide a separate bond power. In any other case, such holder must either properly endorse the Old Notes tendered or transmit a properly completed separate bond power with this Letter of Transmittal, with the signatures on the endorsement or bond power guaranteed by an Eligible Institution. If this Letter of Transmittal (or facsimile hereof) is signed by a person other than the registered Holder(s) of any Old Notes listed, such Old Notes must be endorsed or accompanied by appropriate bond powers signed as the name of the registered Holder(s) appears on the Old Notes and guaranteed by an Eligible Institution. If this Letter of Transmittal (or facsimile hereof) or any Old Notes or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, or officers of corporations or others acting in a 9 10 fiduciary or representative capacity, such persons should so indicate when signing, and unless waived by the Company, evidence satisfactory to the Company of their authority so to act must be submitted with this Letter of Transmittal. Endorsements on Old Notes or signatures on bond powers required by this Instruction 3 must be guaranteed by an Eligible Institution. Signatures on this Letter of Transmittal (or facsimile hereof) must be guaranteed by an Eligible Institution unless the Old Notes tendered pursuant thereto are tendered (i) by a registered Holder who has not completed the box set forth herein entitled "Special Issuance Instructions" or the box entitled "Special Delivery Instructions" or (ii) for the account of an Eligible Institution. 4. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. Tendering Holders should indicate, in the applicable spaces, the name and address to which Exchange Notes or substitute Old Notes for principal amounts not tendered or not accepted for exchange are to be issued or sent, if different from the name and address of the person signing this Letter of Transmittal. In the case of issuance in a different name, the taxpayer identification or social security number of the person named must also be indicated. 5. TRANSFER TAXES. The Company will pay all transfer taxes, if any, applicable to the exchange of Old Notes pursuant to the Exchange Offer. If, however, certificates representing Exchange Notes or Old Notes for principal amounts not tendered or accepted for exchange are to be delivered to, or are to be registered or issued in the name of, any person other than the registered Holder of the Old Notes tendered hereby, or if tendered Old Notes are registered in the name of any person other than the person signing this Letter of Transmittal, or if a transfer tax is imposed for any reason other than the exchange of Old Notes pursuant to the Exchange Offer, then the amount of any such transfer taxes (whether imposed on the registered Holder or any other person) will be payable by the tendering Holder. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted with this Letter of Transmittal, the amount of such transfer taxes will be billed directly to such tendering Holder. Except as provided in this Instruction 5, it will not be necessary for transfer tax stamps to be affixed to the Old Notes listed in this Letter of Transmittal. 6. WAIVER OF CONDITIONS. The Company reserves the absolute right to amend, waive or modify specified conditions in the Exchange Offer in the case of any Old Notes tendered. 7. MUTILATED, LOST, STOLEN OR DESTROYED OLD NOTES. Any tendering Holder whose Old Notes have been mutilated, lost, stolen or destroyed should contact the Exchange Agent at the address indicated herein for further instruction. 8. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests for assistance and requests for additional copies of the Prospectus, this Letter of Transmittal or the Notice of Guaranteed Delivery may be directed to the Exchange Agent at the address specified in the Prospectus. Holders may also contact their broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Exchange Offer. IMPORTANT TAX INFORMATION Under federal income tax laws, a Holder whose tendered Old Notes are accepted for payment is required to provide the Exchange Agent (as payer) with such Holder's correct TIN on Substitute Form W-9 below or otherwise establish a basis for exemption from backup withholding. If such Holder is an individual, the TIN is his social security number. If the Exchange Agent is not provided with the correct TIN, a $500 penalty may be imposed by the Internal Revenue Service, and payments made with respect to Exchange Notes purchased pursuant to the Exchange Offer may be subject to backup withholding. A willful failure to provide a correct TIN may subject a Holder to criminal penalties, including imprisonment. Certain Holders (including, among others, all corporations and certain foreign persons) are not subject to these backup withholding and reporting requirements. Exempt Holders should indicate their exempt status on 10 11 Substitute Form W-9. A foreign person may qualify as an exempt recipient by submitting to the Exchange Agent a properly completed Internal Revenue Service Form W-8, signed under penalties of perjury, attesting to that Holder's exempt status. A Form W-8 can be obtained from the Exchange Agent. See the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for additional instructions. If backup withholding applies, the Exchange Agent is required to withhold 31% of any payments made to the Holder or other payee. Backup withholding is not an additional federal income tax. Rather, the amount of federal income tax liability of persons subject to backup withholding that would have to be paid (through estimated tax payments, other withholding, or other means) will be reduced by the amount of tax withheld. If backup withholding results in an overpayment of taxes, a refund may be obtained from the Internal Revenue Service. PURPOSE OF SUBSTITUTE FORM W-9 To prevent backup withholding on payments made with respect to the Exchange Notes, the Holder is required to provide the Exchange Agent with either: (i) the Holder's correct TIN by completing the form below, certifying that the TIN provided on Substitute Form W-9 is correct (or that such Holder is awaiting a TIN) and that (A) the Holder has not been notified by the Internal Revenue Service that the Holder is subject to backup withholding as a result of failure to report all interest or dividends or (B) the Internal Revenue Service has notified the Holder that the Holder is no longer subject to backup withholding; or (ii) an adequate basis for exemption. WHAT NUMBER TO GIVE THE EXCHANGE AGENT The Holder is required to give the Exchange Agent the TIN (e.g., social security number or employer identification number) of the registered Holder of the Old Notes. If the Old Notes are held in more than one name or are held not in the name of the actual owner, consult the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for additional guidance on which number to report. 11 12 PAYOR'S NAME: REGAL CINEMAS, INC. THIS SUBSTITUTE FORM W-9 MUST BE COMPLETED AND SIGNED Please provide your social security number or other taxpayer identification number on the following Substitute Form W-9 and certify therein that you are subject to backup withholding. ------------------------------------------------------------------------------------------------------------------ SUBSTITUTE FORM W-9 PART 1 -- PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT AND CERTIFY BY SIGNING AND DATING BELOW. PART 2 -- CHECK THE BOX IF YOU ARE NOT SUBJECT TO BACKUP WITHHOLDING UNDER THE PROVISIONS OF SECTION 3406(A)(1)(C) OF THE INTERNAL REVENUE CODE BECAUSE (1) YOU ARE EXEMPT FROM BACKUP WITHHOLDING, (2) YOU HAVE NOT BEEN NOTIFIED THAT YOU ARE SUBJECT TO BACKUP WITHHOLDING AS A RESULT OF FAILURE TO REPORT ALL INTEREST OR DIVIDENDS OR (3) THE INTERNAL REVENUE SERVICE HAS NOTIFIED YOU THAT YOU ARE NO LONGER SUBJECT TO BACKUP WITHHOLDING. [ ] DEPARTMENT OF THE --------------------------- TREASURY SOCIAL SECURITY NUMBER OR EMPLOYER INTERNAL REVENUE IDENTIFICATION SERVICE NUMBER PAYOR'S REQUEST FOR TAXPAYER IDENTIFICATION NUMBER ("TIN") ----------------------------------------------------------------------------------- CERTIFICATION: UNDER PENALTIES OF PERJURY, I CERTIFY THAT THE INFORMATION PROVIDED ON THIS FORM IS TRUE, CORRECT AND COMPLETE. SIGNATURE: ----------------------------------- DATE: ------------------------------------------ PART 3 -- AWAITING TIN [ ] ------------------------------------------------------------------------------------------------------------------ NOTE: ANY FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY CASH PAYMENTS IN EXCESS OF $10.00 MADE TO YOU. YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF SUBSTITUTE FORM W-9. ------------------------------------------------------------------------------------------------------------------ CERTIFICATE OF AWAITING TAX IDENTIFICATION NUMBER I CERTIFY UNDER PENALTIES OF PERJURY THAT A TAXPAYER IDENTIFICATION NUMBER HAS NOT BEEN ISSUED TO ME, AND EITHER (A) I HAVE MAILED OR DELIVERED AN APPLICATION TO RECEIVE A TAXPAYER IDENTIFICATION NUMBER TO THE APPROPRIATE INTERNAL REVENUE SERVICE CENTER OR SOCIAL SECURITY ADMINISTRATION OFFICE, OR (B) I INTEND TO MAIL OR DELIVER AN APPLICATION IN THE NEAR FUTURE. I UNDERSTAND THAT IF I DO NOT PROVIDE A TAXPAYER IDENTIFICATION NUMBER WITHIN 60 DAYS, 31% OF ALL REPORTABLE PAYMENTS MADE TO ME THEREAFTER WILL BE WITHHELD, UNTIL I PROVIDE A NUMBER. ------------------------------------------------------ ------------------------------------------------------ Signature Date ------------------------------------------------------------------------------------------------------------------------------
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12 13 THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS: IBJ SCHRODER BANK & TRUST COMPANY By Registered or Certified Mail: By Facsimile: By Hand or Overnight Courier: IBJ Schroder Bank & Trust Company (212) 858-2611 IBJ Schroder Bank & Trust Company P.O. Box 84 Confirm by Telephone: One State Street Plaza Bowling Green Station (212) 858-2103 New York, New York 10004 New York, New York 10274-0084 Attn: Securities Processing Attn: Reorganization Operations Floor SC-1 Department
13 EX-99.2 14 FORM OF NOTICE OF GUARANTEED DELIVERY 1 EXHIBIT 99.2 NOTICE OF GUARANTEED DELIVERY FOR 8 1/2% SENIOR SUBORDINATED NOTES DUE OCTOBER 1, 2007 OF REGAL CINEMAS, INC. As set forth in the Prospectus, dated , 1997 (the "Prospectus"), of Regal Cinemas, Inc. (the "Company") in the section entitled "The Exchange Offer -- Procedures for Tendering," and in the accompanying Letter of Transmittal and instructions thereto (the "Letter of Transmittal"), this form or one substantially equivalent hereto must be used to accept the Company's exchange offer (the "Exchange Offer") to purchase all of its outstanding 8 1/2% Senior Subordinated Notes due October 1, 2007 (the "Old Notes") if (i) certificates representing the Old Notes to be tendered for purchase and payment are not lost but are not immediately available or (ii) time will not permit the Letter of Transmittal, certificates representing such Old Notes or other required documents to reach the Exchange Agent prior to the Expiration Date. This form may be delivered by an Eligible Institution by mail or hand delivery or transmitted, via telegram, telex or facsimile, to the Exchange Agent as set forth below. All capitalized terms used herein but not defined herein shall have the meanings ascribed to them in the Prospectus. THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON , 1997 UNLESS THE OFFER IS EXTENDED (THE "EXPIRATION DATE"). TENDERS OF OLD NOTES MAY BE WITHDRAWN AT ANY TIME PRIOR TO 5:00 P.M. ON THE BUSINESS DAY PRIOR TO THE EXPIRATION DATE. THE EXCHANGE AGENT IBJ SCHRODER BANK & TRUST COMPANY By Registered or Certified By Facsimile Transmission: By Hand/Overnight Delivery: Mail: (For Eligible Institutions Only) IBJ Schroder Bank & Trust (212) 858-2611 IBJ Schroder Bank & Trust Company Company P.O. Box 84 One State Street Plaza Bowling Green Station New York, New York 10004 New York, New York 10274-0084 Confirm by Telephone: Attention: Securities Attention: Reorganization (212) 858-2103 Processing Operations Department Floor SC-1
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS, OR TRANSMISSION VIA TELEGRAM, TELEX OR FACSIMILE, OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. This form is not to be used to guarantee signatures. If a signature on the Letter of Transmittal is required to be guaranteed by an "Eligible Institution" under the instructions thereto, such signature guarantee must appear in the applicable space provided in the signature box on the Letter of Transmittal. Ladies and Gentlemen: The undersigned hereby tender(s) to the Company, upon the terms and subject to the conditions set forth in the Exchange Offer and the Letter of Transmittal, receipt of which is hereby acknowledged, the aggregate principal amount of Old Notes set forth below pursuant to the guaranteed delivery procedures set forth in the Prospectus (and Letter of Transmittal). 2 The undersigned understands that tenders of Old Notes will be accepted only in principal amounts equal to $1,000 or integral multiples thereof. The undersigned understands that tenders of Old Notes pursuant to the Exchange Offer may not be withdrawn after 5:00 p.m., New York City time on the Business Day prior to the Expiration Date. Tenders of Old Notes may also be withdrawn if the Exchange Offer is terminated without any such Old Notes being purchased thereunder or as otherwise provided in the Prospectus. All authority herein conferred or agreed to be conferred by this Notice of Guaranteed Delivery shall survive the death or incapacity of the undersigned and every obligation of the undersigned under this Notice of Guaranteed Delivery shall be binding upon the heirs, personal representatives, executors, administrators, successors, assigns, trustees in bankruptcy and other legal representatives of the undersigned. Principal Amount of Old Notes Tendered:* $ -------------------------------------------------------------- Certificate No(s). (if available): -------------------------------------------------------------- Total Principal Amount Represented by Certificate(s): $ -------------------------------------------------------------- *Must be in denominations of principal amount of $1,000 and any integral multiple thereof. 2 3 All authority herein conferred or agreed to be conferred shall survive the death or incapacity of the undersigned and every obligation of the undersigned hereunder shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned. PLEASE SIGN HERE X - ----------------------------------------------------- X Date: - ------------------------------------------------------ ----------- Signature(s) of Owner(s) or Authorized Signatory Area Code and Telephone Number: - ----------------------------------------------------- Must be signed by the holder(s) of Old Notes as their name(s) appear(s) on certificates for Old Notes or on a security position listing, or by person(s) authorized to become registered holder(s) by endorsement and documents transmitted with this Notice of Guaranteed Delivery. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer or other person acting in a fiduciary or representative capacity, such person must set forth his or her full title below. If Old Notes will be delivered by book-entry transfer to The Depository Trust Company, provide account number. Please print name(s) and address(es) Name(s): ------------------------------------------------------------------ ------------------------------------------------------------------ ------------------------------------------------------------------ ------------------------------------------------------------------ Capacity: ------------------------------------------------------------------ ------------------------------------------------------------------ Address(es): ------------------------------------------------------------------ ------------------------------------------------------------------ Account Number: --------------------------------------------------------------- ------------------------------------------------------------------ 3 4 GUARANTEE (Not to be used for signature guarantee) The undersigned, a financial institution (including most banks, savings and loan associations and brokerage houses) that is a participant in the Securities Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Program or the Stock Exchanges Medallion Program, hereby guarantees that the undersigned will deliver to the Exchange Agent the certificates representing the Old Notes being tendered hereby or confirmation of book-entry transfer of such Old Notes into the Exchange Agent's account at The Depository Trust Company, in proper form for transfer, together with any other documents required by the Letter of Transmittal within three New York Stock Exchange trading days after the Expiration Date. Name of Firm - -------------------------------------------------------------------------------- Address - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Area Code & Telephone No. - -------------------------------------------------------------------------------- Authorized Signature - -------------------------------------------------------------------------------- Name - -------------------------------------------------------------------------------- (Please Type or Print) Title - -------------------------------------------------------------------------------- Date - -------------------------------------------------------------------------------- NOTE: DO NOT SEND CERTIFICATES OF OLD NOTES WITH THIS FORM. CERTIFICATES OF OLD NOTES SHOULD BE SENT ONLY WITH A COPY OF THE PREVIOUSLY EXECUTED LETTER OF TRANSMITTAL. 4 EX-99.3 15 FORM W-9 1 Exhibit 99.3 GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE PAYER.--Social Security numbers have nine digits separated by two hyphens: i.e., 000-00-0000. Employer identification numbers have nine digits separated by only one hyphen: i.e., 00-0000000. The table below will help determine the number to give the payer.
- ----------------------------------------------------------- ------------------------------------------------------------- GIVE THE GIVE THE EMPLOYER SOCIAL SECURITY FOR THIS TYPE OF ACCOUNT IDENTIFICATION FOR THIS TYPE OF ACCOUNT: NUMBER OF-- NUMBER OF-- - ----------------------------------------------------------- ------------------------------------------------------------- 1. An individual's account. The individual 7. Corporate account The corporation 2. Two or more individuals (joint The actual owner of 8. Partnership account held in The partnership account) the account or, if the name of the business combined funds, the first individual on the 9. Association, club or other tax The organization the account(1) exempt organization 3. Custodian account of a minor The minor(2) 10. A broker or registered nominee The broker or nominee (Uniform Gift to Minors Act) nominee 4. a. The usual revocable savings The grantor-trustee(1) 11. Account with the Department of The public entity trust account (grantor is Agriculture in the name of a also trustee) public entity (such as a State or b. So-called trust account The actual owner(1) local government, school district that is not a legal or valid or prison) that receives trust under state law agricultural program payments 5. Sole proprietorship account The owner(3) 6. A valid trust, estate or Legal entity pension trust (Do not furnish the identifying number of the personal representative or trustee unless the legal entity itself is not designated in the account title)(4) - ----------------------------------------------------------- -------------------------------------------------------------
(1) List first and circle the name of the person whose number you furnish. (2) Circle the minor's name and furnish the minor's social security number. (3) Show the name of the owner. The name of the business or the "doing business as" name may also be entered. Either the social security number or the employer identification number may be used. (4) List first and circle the name of the legal trust, estate or pension trust. Note: If no name is circled when there is more than one name, the number will be considered to be that of the first name listed. 2 GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 PAGE 2 OBTAINING A NUMBER If you don't have a taxpayer identification number ("TIN") or you don't know your number obtain Form SS-5, Application for a Social Security Number Card, or Form SS-4, Application for Employer Identification Number, at the local office of the Social Security Administration or the Internal Revenue Service and apply for a number. PAYEES EXEMPT FROM BACKUP WITHHOLDING Payees specifically exempted from backup withholding on all interest, dividends and broker transactions payments include the following: - A corporation. - A financial institution. - An organization exempt from tax under section 501(a), or an individual retirement plan, or a custodial account under Section 403(b)(7). - The United States or any agency or instrumentality thereof. - A State, the District of Columbia, a possession of the United States or any subdivision or instrumentality thereof. - A foreign government, a political subdivision of a foreign government or any agency or instrumentality thereof. - An international organization or any agency or instrumentality thereof. - A registered dealer in securities or commodities registered in the U.S. or a possession of the U.S. - A real estate investment trust. - A common trust fund operated by a bank under section 584(a). - An exempt charitable remainder trust, or a non-exempt trust described in section 4947(a)(1). - An entity registered at all times under the Investment Company Act of 1940. - A foreign central bank of issue. Payments of dividends and patronage dividends not generally subject to backup withholding include the following: - Payments to nonresident aliens subject to withholding under section 1441. - Payments to partnerships not engaged in a trade or business in the U.S. and which have at least one nonresident partner. - Payments of patronage dividends where the amount received is not paid in money. - Payments made by certain foreign organizations. - Payments made to a nominee. Payments of interest not generally subject to backup withholding include the following: - Payments of interest on obligations issued by individuals. NOTE: You may be subject to backup withholding if this interest is $600 or more, and is paid in the course of the payer's trade or business and you have not provided your correct taxpayer identification number to the payer. - Payments of tax-exempt interest (including exempt-interest dividends under section 852). - Payments described in section 6049(b)(5) to nonresident aliens. - Payments on tax-free covenant bonds under section 1451. - Payments made by certain foreign organizations. - Payments made to a nominee. EXEMPT PAYEES DESCRIBED ABOVE SHOULD FILE FORM W-9 TO AVOID POSSIBLE ERRONEOUS BACKUP WITHHOLDING. COMPLETE THIS SUBSTITUTE FORM W-9 AS FOLLOWS: ENTER YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, SIGN, DATE AND RETURN THE FORM TO THE PAYER. Certain payments other than interest, dividends and patronage dividends, that are not subject to information reporting are also not subject to backup withholding. For details, see the sections 6041, 6041A(a), 6044, 6045, 6049, 6050A and 6050N and the regulations thereunder. PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividends, interest or other payments to give taxpayer identification numbers to payers who must report the payments to IRS. IRS uses the numbers for identification purposes and to help verify the accuracy of tax returns. Payers must be given the numbers whether or not recipients are required to file tax returns. Payers must generally withhold 31% of taxable interest, dividend and certain other payments to a payee who does not furnish a taxpayer identification number to a payer. Certain penalties may also apply. PENALTIES (1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER. If you fail to furnish your correct taxpayer identification number to a payer, you are subject to a penalty of $50 for each such failure which is due to reasonable cause and not to willful neglect. (2) CIVIL PENALTY FOR FALSE STATEMENTS WITH RESPECT TO WITHHOLDING. If you make a false statement with no reasonable basis which results in no imposition of backup withholding, you are subject to a penalty of $500. (3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION. Willfully falsifying certifications or affirmations, may subject you to criminal penalties including fines and/or imprisonment. (4) MISUSE OF TAXPAYER IDENTIFICATION NUMBERS. If the payer discloses or uses taxpayer identification numbers in violation of Federal law, the payer may be subject to civil and criminal penalties. FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE SERVICE. -----END PRIVACY-ENHANCED MESSAGE-----