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Exhibit 1.1
EXECUTION COPY
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KINGPIN MERGER SUB, INC.
(a Delaware corporation)
(to be merged with and into
AMF Bowling Worldwide, Inc.
at the time of the Merger)
$150,000,000
10% Senior Subordinated Notes due 2010
PURCHASE AGREEMENT
Dated: February 19, 2004
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SECTION 1. Representations
and Warranties
.................................................................3
(a)
Representations and Warranties by the Company
..................................................3
(i)
Offering Memorandum
..................................................................3
(ii)
Independent Accountants
..............................................................3
(iii) Financial
Statements
.................................................................3
(iv) No
Material Adverse Change in Business
...............................................4
(v) Good
Standing of AMF and the Company
.................................................4
(vi) Good
Standing of Subsidiaries
........................................................4
(vii) Capitalization
.......................................................................4
(viii)
Authorization of Purchase Agreement and Registration Rights
Agreement. ...............4
(ix)
Authorization of the Joinder Agreements
..............................................5
(x)
Authorization of the Indenture
.......................................................5
(xi)
Authorization of the Securities
......................................................5
(xii) Authorization of
the Escrow Agreement
................................................6
(xiii)
Authorization of the Merger Agreement
................................................6
(xiv) Authorization of
the New Senior Secured Credit Facility
..............................6
(xv)
Authorization of the Sale-Leaseback Facility
.........................................6
(xvi) Power and
Authority
..................................................................6
(xvii)
Description of the Securities, the Indenture, the Escrow Agreement,
the
Registration Rights Agreement, the New Senior Secured Credit
Facility, the
Sale-Leaseback Facility and the Merger Agreement
.....................................6
(xviii) Absence
of Defaults and Conflicts
....................................................6
(xix) Absence of Labor
Dispute
.............................................................7
(xx) Absence of
Proceedings
...............................................................7
(xxi) Absence of
Manipulation
..............................................................8
(xxii)
Possession of Intellectual Property
..................................................8
(xxiii) Absence
of Further Requirements
......................................................8
(xxiv)
Possession of Licenses and Permits
...................................................8
(xxv) Title to
Property
....................................................................8
(xxvi)
Environmental Laws
...................................................................9
(xxvii)
Investment Company Act
...............................................................9
(xxviii) Similar
Offerings
....................................................................9
(xxix)
Rule 144A Eligibility
................................................................9
(xxx) No General
Solicitation
.............................................................10
(xxxi) No
Registration Required
............................................................10
(xxxii) No
Directed Selling Efforts
.........................................................10
(xxxiii) Accounting
Controls
.................................................................10
(xxxiv)
Disclosure Controls
.................................................................10
(xxxv)
Related Party Transactions
..........................................................10
(xxxvi) Tax
Returns
.........................................................................11
(xxxvii) Insurance
...........................................................................11
(xxxviii) Solvency
............................................................................11
(xxxix)
Suppliers
...........................................................................11
(x1) AMF's
Representation and Warranties in the Merger Agreement
.........................11
(x1i) Foreign Corrupt
Practices
...........................................................11
(b)
Officers' Certificates
........................................................................11
SECTION 2. Sale and
Delivery to Initial Purchasers; Closing
..............................................12
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(a)
Securities
....................................................................................12
(b)
Payment
.......................................................................................12
(c)
Denominations; Registration
...................................................................12
SECTION 3. Covenants of the
Company
......................................................................12
(a)
Offering Memorandum
...........................................................................12
(b)
Notice and Effect of Material Events
..........................................................12
(c)
Amendment to Offering Memorandum and Supplements
..............................................13
(d)
Qualification of Securities for Offer and Sale
................................................13
(e)
Rating of Securities
..........................................................................13
(f) DTC
...........................................................................................13
(g) Use
of Proceeds
...............................................................................13
(h)
Restriction on Sale of Securities
.............................................................13
(i)
PORTAL Designation
............................................................................13
(j)
Reporting Requirements
........................................................................13
(k) Rule
144A Information
.........................................................................14
(l)
Joinder Agreements and Supplemental Indenture
.................................................14
(m)
Legends
.......................................................................................14
SECTION 4. Payment of
Expenses
...........................................................................14
(a)
Expenses
......................................................................................14
(b)
Termination of Agreement
......................................................................15
SECTION 5. Conditions of
Initial Purchasers' Obligations
.................................................15
(a)
Opinion of Counsel for Company, AMF and the Guarantors
........................................15
(b)
Opinion of Counsel for Initial Purchasers
.....................................................15
(c)
Additional Opinions
...........................................................................15
(d)
Officers' Certificate
.........................................................................15
(e)
Accountants' Comfort Letter
...................................................................16
(f)
Bring-down Comfort Letter
.....................................................................16
(g)
Maintenance of Rating
.........................................................................16
(h)
PORTAL
........................................................................................16
(i)
Financial Officer's Certificate
...............................................................16
(j)
Registration Rights Agreement and Indenture
...................................................16
(k)
Escrow Agreement
..............................................................................16
(1) New
Senior Secured Credit Facility
............................................................16
(m)
Consent Solicitation and Tender Offer
.........................................................17
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(n)
Sale-Leaseback Facility
.......................................................................17
(o) The
Merger Agreement
..........................................................................17
(p)
Purchase Agreement Joinder Agreement
..........................................................17
(q)
Additional Documents
..........................................................................17
(r)
Termination of Agreement
......................................................................17
SECTION 6. Subsequent
Offers and Resales of the Securities
...............................................17
(a)
Offer and Sale Procedures
.....................................................................17
(i)
Offers and
Sales
....................................................................17
(ii) No General
Solicitation
.............................................................17
(iii) Purchases by
Non-Bank Fiduciaries
...................................................18
(iv) Subsequent
Purchaser Notification
...................................................18
(v)
Minimum Principal Amount
............................................................18
(b)
Covenants of the Company
......................................................................18
(i)
Integration
.........................................................................18
(ii) Rule 144A
Information
...............................................................18
(iii) Restriction on
Repurchases
..........................................................18
(c)
Resale Pursuant to Rule 903 of Regulation S or Rule 144A
......................................18
(d)
Qualified Institutional Buyer
.................................................................19
SECTION 7. Indemnification.
..............................................................................19
(a)
Indemnification of Initial Purchasers
.........................................................19
(b)
Indemnification of Company
....................................................................20
(c)
Actions against Parties; Notification
.........................................................20
(d)
Settlement without Consent if Failure to Reimburse
............................................20
SECTION 8. Contribution
..................................................................................20
SECTION 9. Representations,
Warranties and Agreements to Survive
.........................................21
SECTION 10. Termination of
Agreement
......................................................................22
(a)
Termination; General
..........................................................................22
(b)
Liabilities
...................................................................................22
SECTION 11. Default by One or More
of the Initial Purchasers
..............................................22
SECTION 12. Tax Disclosure
................................................................................23
SECTION 13. Notices
.......................................................................................23
SECTION 14. Parties
.......................................................................................23
SECTION 15. Mergers
.......................................................................................23
SECTION 16. Governing Law
.................................................................................23
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SECTION 17. Time
..........................................................................................23
SECTION 18. Counterparts
..................................................................................24
SECTION 19. Effect of Headings
............................................................................24
Schedule A --
Initial Purchasers
Schedule B --
List of Guarantors
Schedule C --
Notes
Exhibit A --
Form of Opinion of Kirkland & Ellis LLP
Exhibit B --
Form of Opinion of Fried, Frank, Harris, Shriver & Jacobson
LLP
Exhibit C --
Form of Purchase Agreement Joinder Agreement
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KINGPIN MERGER SUB, INC.
(a Delaware corporation)
(to be merged with and into
AMF Bowling Worldwide, Inc.
at the time of the Merger)
$150,000,000
PURCHASE AGREEMENT
February 19, 2004
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner &
Smith
Incorporated
Credit Suisse First Boston LLC
as Representatives of the several Initial Purchasers
c/o Merrill Lynch & Co.
Merrill Lynch,
Pierce, Fenner & Smith
Incorporated
4 World Financial Center
New York, New York 10080
Ladies and Gentlemen:
Kingpin Merger
Sub, Inc., a Delaware corporation (the "Company") (which
will be merged with and into AMF Bowling
Worldwide, Inc., a Delaware corporation
("AMF"), upon consummation of the Merger
(as defined below) with AMF as the
survivor of the Merger), confirms its
agreement with Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("Merrill Lynch") and each of
the other Initial Purchasers named in
Schedule A hereto (collectively, the
"Initial Purchasers," which term shall also
include any initial purchaser
substituted as hereinafter provided in
Section 11 hereof), for whom Merrill
Lynch and Credit Suisse First Boston LLC
("CSFB") are acting as representatives
(in such capacity, the "Representatives"),
with respect to (i) the issue and
sale by the Company and the purchase by the
Initial Purchasers, acting severally
and not jointly, of the respective
principal amounts set forth in said Schedule
A of $150,000,000 aggregate principal
amount of the Company's 10% Senior
Subordinated Notes due 2010 (the "Notes")
and (ii) the issue and sale by the
Guarantors listed on Schedule B hereto
(each a "Guarantor" and collectively, the
"Guarantors") and the purchase by the
Initial Purchasers, acting severally and
not jointly, of the senior subordinated
guarantees (the "Guarantees") of the
Company's obligations under the Notes. The
Notes and the Guarantees are
collectively referred to as the
"Securities." The Securities are to be issued
pursuant to an indenture to be dated as of
February 27, 2004 (the "Indenture")
by and among, the Company, Wilmington Trust
Company, a Delaware banking
corporation, as trustee (the "Trustee"),
and other parties from time to time
signatories thereto, including each of the
Guarantors. Securities issued in
book-entry form will be issued to Cede
& Co. as nominee of The Depository Trust
Company ("DTC") pursuant to a letter
agreement, to be dated before or as of the
Closing Time (as defined in Section 2(b))
(the "DTC Agreement"), between the
Company and DTC.
The Securities
are being issued as part of the financing to effect the
acquisition of AMF and its subsidiaries by
the merger (the "Merger") of the
Company, with and into AMF, whereby AMF
will be the surviving corporation of the
Merger. The Merger will be effected
pursuant to the Agreement and Plan of Merger
(the "Merger Agreement"), dated as of
November 26, 2003, among Kingpin Holdings
LLC ("Kingpin
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Holdings"), a Delaware limited liability
company, the Company, a direct wholly
owned subsidiary of Kingpin Holdings, and
AMF.
In connection
with the consummation of the Merger, the Merger Agreement and
related documents contemplate the
occurrence of the following acquisition and
related financing transactions including
the issuance of the Securities pursuant
to this Agreement: (i) investment (the
"Equity Investment") by Code Hennessy &
Simmons IV LP, a Delaware limited
partnership, certain of its co-investors and
certain members of AMF's management team
(collectively, the "Equity Investors")
in Kingpin Holdings totaling approximately
$135 million; (ii) payment of $25.00
in cash by the Company for each share of
AMF common stock (the "Merger
Consideration"); (iii) refinancing of
approximately $334 million of AMF's net
existing indebtedness (including repayment
of indebtedness under existing credit
facilities (the "Existing Credit
Facilities") and the consummation of AMF's
consent solicitation and tender offer to
purchase the outstanding 13.00% senior
subordinated notes of AMF, due 2008 (the
"Consent Solicitation and Tender
Offer")); (iv) borrowing by AMF of
approximately $135 million in term loans
under a new senior secured credit facility
(the "New Senior Secured Credit
Facility"); (v) sale of certain of AMF's
real estate under a sale-leaseback
arrangement for aggregate proceeds of $250
million (the "Sale-Leaseback
Facility"); and (vi) payment of certain
fees and expenses incurred in connection
with the foregoing acquisition and related
financing transactions (clauses (i)
through (vi), collectively, the
"Transactions" and documents executed in
connection therewith, the "Transaction
Documents").
The Company
understands that the Initial Purchasers propose to make an
offering of the Securities on the terms and
in the manner set forth herein and
agree that the Initial Purchasers may
resell, subject to the conditions set
forth herein, all or a portion of the
Securities to purchasers ("Subsequent
Purchasers") at any time after this
Agreement has been executed and delivered.
The Securities are to be offered and sold
through the Initial Purchasers without
being registered under the Securities Act
of 1933, as amended (the "1933 Act"),
in reliance upon exemptions therefrom.
Pursuant to the terms of the Securities
and the Indenture, investors that acquire
Securities may only resell or
otherwise transfer such Securities if such
Securities are hereafter registered
under the 1933 Act or if an exemption from
the registration requirements of the
1933 Act is available (including the
exemption afforded by Rule 144A ("Rule
144A") or Regulation S ("Regulation S") of
the rules and regulations promulgated
under the 1933 Act by the Securities and
Exchange Commission (the
"Commission")).
The Company has
prepared and delivered to each Initial Purchaser copies of
a preliminary offering memorandum dated
February 6, 2004 (the "Preliminary
Offering Memorandum") and has prepared and
will deliver to each Initial
Purchaser, on the date hereof or the next
succeeding day, copies of a final
offering memorandum dated February 19, 2004
(the "Final Offering Memorandum"),
each for use by such Initial Purchaser in
connection with its solicitation of
purchases of, or offering of, the
Securities. "Offering Memorandum" means, with
respect to any date or time referred to in
this Agreement, the most recent
offering memorandum (whether the
Preliminary Offering Memorandum or the Final
Offering Memorandum, or any amendment or
supplement to either such document),
which has been prepared and delivered by
the Company to the Initial Purchasers
in connection with their solicitation of
purchases of, or offering of, the
Securities.
The holders of
the Securities will be entitled to the benefits of the
registration rights agreement to be dated
as of the; Closing Time (the
"Registration Rights Agreement"), by and
among the Company, the Guarantors and
the Initial Purchasers, pursuant to which
the Company will agree, subject to the
terms and conditions thereof, to file a
registration statement with the
Commission registering the Exchange
Securities (as defined in the Registration
Rights Agreement), and the Guarantees with
respect thereto, under the 1933 Act;
PROVIDED, HOWEVER, that if the Merger has
not occurred by the Closing Time, the
Guarantors shall not be party to the
Registration Rights Agreement until the
Guarantors execute the Registration Rights
Joinder Agreement (defined below)
required hereby.
If the Merger is
not consummated at the Closing Time, the Company shall
deposit (or cause to be deposited) with the
Escrow Agent (as defined below) the
proceeds from the sale of the Securities,
together with
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additional funds (collectively, the "Escrow
Funds"), pursuant to an Escrow
Agreement to be dated February 27, 2004
(the "Escrow Agreement"), among the
Company, Wilmington Trust Company, a
Delaware banking corporation, as escrow
agent (the "Escrow Agent") and the Trustee.
Pending consummation of the Merger,
the Escrow Funds will be held by the Escrow
Agent in an escrow account (the
"Escrow Account"). AMF will be able to
obtain release of the Escrow Funds upon
consummation of the Merger and subject to
the conditions set forth in the Escrow
Agreement. If AMF has not obtained the
release of the Escrow Funds on or prior
to March 29, 2004 (the "Deadline Date") in
accordance with the terms of the
Escrow Agreement, then the Indenture will
require that the Company redeem all of
the Securities at 101% of their principal
amount plus accrued and unpaid
interest thereon (the "Special Mandatory
Redemption"). The Company has a
one-time option to extend the Deadline Date
by up to 90 days but in no event may
the Company extend the Deadline Date beyond
June 28, 2004. In the event the
Company elects to extend the Deadline Date
as provided by the terms of the
Escrow Agreement, the Company shall be
required to deposit with the Escrow Agent
an additional amount of cash (which may be
invested in Cash Equivalents)
sufficient to fund the accrued and unpaid
interest on the Securities for such
additional time period.
SECTION 1.
REPRESENTATIONS AND WARRANTIES.
(a)
REPRESENTATIONS AND WARRANTIES BY THE COMPANY. The Company
represents
and warrants to each Initial Purchaser as
of the date hereof and as of the
Closing Time referred to in Section 2(b)
hereof, and agrees with each Initial
Purchaser, as follows:
(i) OFFERING MEMORANDUM. The Offering Memorandum does not; and at
the
Closing Time
will not, include an untrue statement of a material fact or
omit to state a
material fact necessary in order to make the statements
therein, in the
light of the circumstances under which they were made, not
misleading;
PROVIDED that this representation, warranty and agreement shall
not apply to
statements in or omissions from the Offering Memorandum made
in reliance upon
and in conformity with written information furnished to
the Company by
any Initial Purchaser through Merrill Lynch expressly for
use in the
Offering Memorandum.
(ii) INDEPENDENT ACCOUNTANTS. Arthur Andersen LLP, who audited
the
financial
statements and supporting schedules of AMF and its subsidiaries
as of December
31, 2001 and for the fiscal years ended December 31, 2001,
2000, 1999 and
1998 included in the Offering Memorandum, were independent
certified public
accountants with respect to AMF and its respective
subsidiaries
within the meaning of Regulation S-X under the 1933 Act at all
times that
Arthur Andersen LLP was engaged by AMF. KPMG LLP, who audited
the consolidated
financial statements and supporting schedules of AMF and
its subsidiaries
as of June 29, 2003 and June 30, 2002, and for the year
ended June 29,
2003 the four months ended June 30, 2002 and the two months
ended February
28, 2002, included in the Offering Memorandum, are
independent
certified public accountants with respect to AMF and its
subsidiaries
within the meaning of Regulation S-X under the 1933 Act.
(iii) FINANCIAL STATEMENTS. The financial statements, together
with
the related
schedules and notes, included in the Offering Memorandum
present fairly
the financial position of AMF and its consolidated
subsidiaries at
the dates indicated and the statement of operations,
stockholders'
equity and cash flows of AMF and its consolidated
subsidiaries for
the periods specified, said financial statements have been
prepared in
conformity with generally accepted accounting principles
("GAAP") applied
on a consistent basis throughout the periods involved. The
supporting
schedules, if any, included in the Offering Memorandum present
fairly in
accordance with GAAP the information required to be stated
therein. The
selected financial data and the summary financial information
included in the
Offering Memorandum present fairly the information shown
therein and have
been compiled on a basis consistent with that of the
audited
financial statements included in the Offering Memorandum. The
pro
forma financial
statements of AMF and its subsidiaries and the related
notes thereto
included in the Offering Memorandum present fairly the
information
shown therein, have been prepared in accordance
3
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with the
Commission's rules and guidelines with respect to pro forma
financial
statements and have been properly compiled on the bases
described
therein, and the
assumptions used in the preparation thereof are reasonable
and the
adjustments used therein are appropriate to give effect to the
transactions and
circumstances referred to therein.
(iv) NO MATERIAL ADVERSE CHANGE IN BUSINESS. Since the
respective
dates as of
which information is given in the Offering Memorandum, except
as otherwise
stated therein, (A) there has been no material adverse change
in the
condition, financial or otherwise, or in the earnings, business
affairs or
business prospects of AMF, the Company, the Guarantors and
their
respective
subsidiaries considered as one enterprise, whether or not
arising in the
ordinary course of business (a "Material Adverse Effect"),
(B) there have
been no transactions entered into by AMF, the Company, the
Guarantors or
any of their respective subsidiaries, other than those in the
ordinary course
of business, which are material with respect to AMF, the
Company, the
Guarantors and their respective subsidiaries considered as one
enterprise, and
(C) there has been no dividend or distribution of any kind
declared, paid
or made by AMF, the Company, the Guarantors or their
respective
subsidiaries on any class of their capital stock or other
equity
interest.
(v) GOOD STANDING OF AMF AND THE COMPANY. Each of AMF and the
Company
has been duly
organized and is validly existing as a corporation in good
standing under
the laws of the State of Delaware and has corporate power
and authority to
own, lease and operate its properties and to conduct its
business as
described in the Offering Memorandum and to enter into and
perform its
obligations under this Agreement; and each of AMF and the
Company is duly
qualified as a foreign corporation to transact business and
is in good
standing in each other jurisdiction in which such qualification
is required,
whether by reason of the ownership or leasing of property or
the conduct of
business, except where the failure so to qualify or to be in
good standing
would not result in a Material Adverse Effect.
(vi) GOOD STANDING OF SUBSIDIARIES. Each subsidiary of AMF (each
a
"Subsidiary" and
collectively the "Subsidiaries") (including each of the
Guarantors) has
been duly organized and is validly existing as a
corporation in
good standing under the laws of the jurisdiction of its
incorporation,
has corporate power and authority to own, lease and operate
its properties
and to conduct its business as described in the Offering
Memorandum and
is duly qualified as a foreign corporation to transact
business and is
in good standing in each jurisdiction in which such
qualification is
required, whether by reason of the ownership or leasing of
property or the
conduct of business, except where the failure so to qualify
or to be in good
standing would not result in a Material Adverse Effect;
except as
otherwise disclosed in the Offering Memorandum, all of the
issued
and outstanding
capital stock of each Subsidiary has been duly authorized
and validly
issued, is fully paid and non-assessable and is owned by AMF,
directly or
through subsidiaries, free and clear of any security interest,
mortgage,
pledge, lien, encumbrance, claim or equity; none of the
outstanding
shares of capital stock of the Subsidiaries was issued in
violation of any
preemptive or similar rights of any security holder of
such Subsidiary.
All the Subsidiaries are listed on Schedule C attached
hereto.
(vii) CAPITALIZATION. The authorized, issued and outstanding
capital
stock of the
Company is as set forth in the Offering Memorandum. The shares
of issued and
outstanding capital stock of the Company has been duly
authorized and
validly issued and are fully paid and non-assessable; none
of the
outstanding shares of capital stock of the Company was issued
in
violation of the
preemptive or other similar rights of any securityholder
of the
Company.
(viii) AUTHORIZATION OF PURCHASE AGREEMENT AND REGISTRATION
RIGHTS
AGREEMENT.
(a) This Agreement has been duly authorized by the Company and
each of the
Guarantors. This Agreement has been duly executed and delivered
by the Company
and at the Closing Time, assuming due authorization,
execution and
delivery by the Initial Purchasers, this Agreement will
4
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constitute the
valid and binding obligation of the Company, enforceable
against the
Company in accordance with its terms. At the Closing Time, each
of the
Guarantors, if the Merger is consummated, will have duly
executed
and delivered
this Agreement and, assuming due authorization, execution and
delivery by the
Initial Purchasers, this Agreement will constitute the
valid and
binding obligation of each of the Guarantors, enforceable
against
each of the
Guarantors in accordance with its terms.
(b) The Registration Rights Agreement has been duly authorized
by
the Company and
each of the Guarantors. The Registration Rights Agreement
will be duly
executed and delivered by the Company at the Closing Time and
at the Closing
Time, assuming due authorization, execution and delivery by
the Initial
Purchasers, the Registration Rights Agreement will constitute
the valid and
binding obligation of the Company, enforceable against the
Company in
accordance with its terms. At the Closing Time, each of the
Guarantors, if
the Merger is consummated, will have duly executed and
delivered the
Registration Rights Agreement and, assuming due
authorization,
execution and delivery by the Initial Purchasers, the
Registration
Rights Agreement will constitute the valid and binding
obligation of
each of the Guarantors, enforceable against each of the
Guarantors in
accordance with its terms.
(ix) AUTHORIZATION OF THE JOINDER AGREEMENTS. The registration
rights
joinder
agreement (the "Registration Rights Joinder Agreement") and the
purchase
agreement joinder agreement (the "Purchase Agreement Joinder
Agreement,"
together with the Registration Rights Joinder Agreement, the
"Joinder
Agreements") have been duly authorized by each of the
Guarantors,
and once the
Merger is consummated, will be duly executed and delivered by
each of the
Guarantors and will constitute the valid and binding
obligations of
each of the Guarantors, enforceable against each of the
Guarantors in
accordance with their terms.
(x) AUTHORIZATION OF THE INDENTURE. The Indenture has been duly
authorized by
the Company and each of the Guarantors. The Indenture will be
duly executed
and delivered by the Company at the Closing Time and at the
Closing Time,
assuming due authorization, execution and delivery by the
Trustee, the
Indenture will constitute the valid and binding obligation of
the Company,
enforceable against the Company in accordance with its terms.
At the Closing
Time, each of the Guarantors, if the Merger is consummated,
will have duly
executed and delivered the Indenture and, assuming due
authorization,
execution and delivery by the Trustee, the Indenture will
constitute the
valid and binding obligation of each of the Guarantors,
enforceable
against each of the Guarantors in accordance with its terms
(xi) AUTHORIZATION OF THE SECURITIES. The Notes have been duly
authorized and,
at the Closing Time, will have been duly executed and
delivered by the
Company and, when authenticated, issued and delivered in
the manner
provided for in the Indenture and delivered against payment of
the purchase
price therefor as provided in this Agreement, will constitute
valid and
binding obligations of the Company, enforceable against the
Company in
accordance with their terms and will be in the form
contemplated
by, and entitled
to the benefits of, the Indenture.
The Guarantees have been duly authorized by each of the
Guarantors
and, once the
Merger is consummated, will have been duly executed and
delivered by
each of the Guarantors and, when the Notes are, authenticated,
issued and
delivered in the manner provided for in the Indenture and
delivered
against payment of the purchase price therefor as provided in
this Agreement
and once the Merger is consummated, will constitute valid
and binding
obligations of each of the Guarantors, enforceable against each
of the
Guarantors in accordance with their terms.
The Exchange Securities have been duly authorized by Company, and
when
executed and
authenticated and issued and delivered by the Company in
exchange for the
Notes pursuant to the
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Exchange Offer
(as defined in the Registration Rights Agreement), will
constitute valid
and binding obligations of the Company, enforceable
against the
Company in accordance with their terms.
The guarantees of the Exchange Securities have been duly authorized
by
each of the
Guarantors and, when the Exchange Securities are authenticated,
issued and
delivered in the manner provided for in the Indenture, will
constitute valid
and binding obligations of each of the Guarantors,
enforceable
against each of the Guarantors in accordance with their terms
and will be in
the form contemplated by, and entitled to the benefits of,
the
Indenture.
(xii) AUTHORIZATION OF THE ESCROW AGREEMENT. The Escrow Agreement
has
been duly
authorized by the Company. At the Closing Time if the Merger is
not consummated,
the Company will have duly executed and delivered the
Escrow Agreement
and assuming due authorization, execution and delivery of
the Escrow
Agreement by each other party thereto, the Escrow Agreement
will
constitute the
valid and binding obligation of the Company, enforceable
against the
Company in accordance with its terms.
(xiii) AUTHORIZATION OF THE MERGER AGREEMENT. The Merger Agreement
has
been duly
authorized executed and delivered by AMF and the Company and
constitutes a
valid and binding agreement of AMF and the Company
enforceable
against AMF and the Company in accordance with its terms.
(xiv) AUTHORIZATION OF THE NEW SENIOR SECURED CREDIT FACILITY. The
New
Senior Secured
Credit Facility has been authorized by the Company and each
of the
Guarantors which are a party thereto and, when executed and
delivered by the
Company and such Guarantors, assuming due authorization,
execution and
delivery by each other party thereto, will constitute a valid
and binding
agreements of the Company and such Guarantors enforceable
against the
Company and such Guarantors in accordance with its terms.
(xv) AUTHORIZATION OF THE SALE-LEASEBACK FACILITY. The
Sale-Leaseback
Facility has
been authorized by the Company and each of the Guarantors
which are a
party thereto and, when executed and delivered by the Company
and such
Guarantors, assuming due authorization, execution and delivery
by
each other party
thereto, will constitute a valid and binding agreements of
the Company and
such Guarantors enforceable against the Company and such
Guarantors in
accordance with its terms.
(xvi) POWER AND AUTHORITY. AMF, the Company and each of the
Guarantors
has all
requisite corporate or such other similar power and authority
to
enter into and
perform its obligations under this Agreement, the
Registration
Rights Agreement, the Indenture, the Escrow Agreement, the
Securities, the
Dealer Manager Agreement, the Exchange Securities, the New
Senior Secured
Credit Facility, the Sale-Leaseback Facility, the Joinder
Agreement, the
Merger Agreement and the DTC Agreement, in each case to the
extent a party
thereto, and to consummate all the transactions in
connection
therewith as contemplated in the Offering Memorandum.
(xvii) DESCRIPTION OF THE SECURITIES, THE INDENTURE, THE ESCROW
AGREEMENT, THE
REGISTRATION RIGHTS AGREEMENT, THE NEW SENIOR SECURED CREDIT
FACILITY, THE
SALE-LEASEBACK FACILITY AND THE MERGER AGREEMENT. The
Securities, the
Indenture, the Escrow Agreement, the Registration Rights
Agreement, the
New Senior Secured Credit Facility, the Sale-Leaseback
Facility and the
Merger Agreement will conform in all material respects to
the respective
descriptions thereof contained in the Offering Memorandum
and will be in
substantially the respective forms previously delivered to
the Initial
Purchasers prior to the date of this Agreement.
(xviii) ABSENCE OF DEFAULTS AND CONFLICTS. None of AMF, the
Company,
the Guarantors
or any of their respective subsidiaries is in violation of
its charter or
by-laws or in default in the performance or
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observance of
any obligation, agreement, covenant or condition contained in
any contract,
indenture, mortgage, deed of trust, loan or credit agreement,
note, lease or
other agreement or instrument to which AMF, the Company, the
Guarantors or
any of their respective subsidiaries is a party or by which
or any of them
may be bound, or to which any of the property or assets of
AMF, the
Company, the Guarantors or any of their respective subsidiaries
is
subject
(collectively, "Agreements and Instruments") except for such
defaults that
would not result in a Material Adverse Effect; and the
execution,
delivery and performance of this Agreement, the Indenture, the
Escrow Agreement
and the Securities, the other Transaction Documents and
any other
agreement or instrument entered into or issued or to be entered
into or issued
by AMF, the Company, the Guarantors or any of their
respective
subsidiaries in connection with the transactions contemplated
hereby or
thereby or in the Offering Memorandum and the consummation of
the
transactions
contemplated herein and in the Offering Memorandum (including
the issuance and
sale of the Securities and consummation of the other
Transactions and
the use of the proceeds from the sale of the Securities as
described in the
Offering Memorandum under the caption "Use of Proceeds")
and compliance
by the Company with its obligations hereunder have been duly
authorized by
all necessary corporate action and do not and will not after
giving effect to
the other Transactions, whether with or without the giving
of notice or
passage of time or both, conflict with or constitute a breach
of, or default
or Repayment Event (as defined below) under, or result in
the creation or
imposition of any lien, charge or encumbrance upon any
property or
assets of AMF, the Company, the Guarantors or any of their
respective
subsidiaries pursuant to, the Agreements and Instruments except
for such
conflicts, breaches or defaults or Repayment Events or liens,
charges or
encumbrances that, singly or in the aggregate, would not
reasonably be
expected to result in a Material Adverse Effect, nor will
such action
result in any violation of the provisions of the charter or
by-laws of AMF,
the Company, the Guarantors or any of their respective
subsidiaries or
any applicable law, statute, rule, regulation, judgment,
order, writ or
decree of any government, government instrumentality or
court, domestic
or foreign, having jurisdiction over AMF, the Company, the
Guarantors or
any of their respective subsidiaries or any of their assets,
properties or
operations. As used herein, a "Repayment Event" means any
event or
condition which gives the holder of any note, debenture or
other
evidence of
indebtedness (or any person acting on such holder's behalf) the
right to require
the repurchase, redemption or repayment of all or a
portion of such
indebtedness by AMF, the Company, the Guarantors or any of
their respective
subsidiaries.
(xix) ABSENCE OF LABOR DISPUTE. No labor dispute with the employees
of
AMF, the
Company, the Guarantors or any of their respective subsidiaries
exists or, to
the knowledge of the Company, is imminent, and none of AMF,
the Company, the
Guarantors or any of their respective subsidiaries is
aware of any
existing or imminent labor disturbance by the employees of any
of AMF's, the
Company's, the Guarantors' or any of their respective
subsidiaries'
principal suppliers, manufacturers, customers or contractors,
which, in either
case, would result in a Material Adverse Effect.
(xx) ABSENCE OF PROCEEDINGS. There is no action, suit,
proceeding,
inquiry or
investigation before or brought by any court or governmental
agency or body,
domestic or foreign, now pending, or, to the knowledge of
the Company,
threatened, against or affecting AMF, the Company, the
Guarantors or
any of their respective subsidiaries which might result in a
Material Adverse
Effect, or which might materially and adversely affect the
properties or
assets of AMF, the Company, the Guarantors or any of their
respective subsidiaries or
the consummation of the transactions
contemplated by
this Agreement or any of the Transactions or the
performance by
AMF, the Company, the Guarantors or any of their respective
subsidiaries of
their obligations hereunder or under the Securities, the
Exchange
Securities, the Escrow Agreement or any of the Transaction
Documents. The
aggregate of all pending legal or governmental proceedings
to which AMF,
the Company, the Guarantors or any of their respective
subsidiaries is
a party or of which any of their respective property or
assets is the
subject which are not described in the Offering Memorandum,
including
ordinary routine litigation incidental to the business, would
not
reasonably be
expected to result in a Material Adverse Effect.
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(xxi) ABSENCE OF MANIPULATION. None of AMF, the Company, the
Guarantors or
any respective affiliate thereof has taken, nor will take,
directly or
indirectly, any action which is designed to or which has
constituted or
which would be expected to cause or result in stabilization
or manipulation
of the price of any security of AMF, the Company, the
Guarantors or
their respective subsidiaries to facilitate the sale or
resale of the
Securities.
(xxii) POSSESSION OF INTELLECTUAL PROPERTY. AMF, the Company,
the
Guarantors and
their respective subsidiaries own or possess, or can acquire
on reasonable
terms, adequate patents, patent rights, licenses, inventions,
copyrights,
know-how (including trade secrets and other unpatented and/or
unpatentable
proprietary or confidential information, systems or
procedures),
trademarks, service marks, trade names or other intellectual
property
(collectively, "Intellectual Property") necessary to carry on
the
business now
operated by them, and none of AMF, the Company, the Guarantors
or any of their
respective subsidiaries has received any notice or is
otherwise aware
of any infringement of or conflict with asserted rights of
others with
respect to any Intellectual Property or of any facts or
circumstances
which would render any Intellectual Property invalid or
inadequate to
protect the interest of AMF, the Company, the Guarantors or
any of their
respective subsidiaries therein, and which infringement or
conflict (if the
subject of any unfavorable decision, ruling or finding) or
invalidity or
inadequacy, singly or in the aggregate, would result in a
Material Adverse
Effect.
(xxiii) ABSENCE OF FURTHER REQUIREMENTS. No filing with, or
authorization,
approval, consent, license, order, registration,
qualification or
decree of, any court or governmental authority or agency
is necessary or
required for the performance by AMF, the Company and each
of the
Guarantors of its obligations hereunder, in connection with the
offering,
issuance or sale of the Securities hereunder or the
consummation
of the
transactions contemplated by this Agreement or for the due
execution,
delivery or performance of the Indenture by AMF, the Company
and
each of the
Guarantors, except such as have been already obtained.
(xxiv) POSSESSION OF LICENSES AND PERMITS. AMF, the Company,
the
Guarantors and
their respective subsidiaries possess such permits,
licenses,
approvals, consents and other authorizations (collectively,
"Governmental
Licenses") issued by the appropriate federal, state, local or
foreign
regulatory agencies or bodies necessary to conduct the business
now
operated by them
respectively, except where the failure so to possess would
not, singly or
in the aggregate, result in a Material Adverse Effect; AMF,
the Company, the
Guarantors and their respective subsidiaries are in
compliance with
the terms and conditions of all such Governmental Licenses
and with the
rules and regulations of all regulatory authorities and
governing bodies
having jurisdiction with respect thereto, except where the
failure so to
comply would not, singly or in the aggregate, result in a
Material Adverse
Effect; all of the Governmental Licenses are valid and in
full force and
effect, except, where the invalidity of such Governmental
Licenses or the
failure of such Governmental Licenses to be in full force
and effect would
not, singly or in the aggregate, result in a Material
Adverse Effect;
and none of AMF, the Company, the Guarantors or any of
their respective
subsidiaries has received any notice of proceedings
relating to the
revocation or modification of any such Governmental
Licenses which,
singly or in the aggregate, if the subject of an
unfavorable
decision, ruling, or finding, would result in a Material
Adverse
Effect.
(xxv) TITLE TO PROPERTY. AMF, the Company, the Guarantors and
their
respective
subsidiaries have good and marketable title to all real
property
owned by AMF,
the Company, the Guarantors and their respective subsidiaries
and good title
to all other properties owned by them, in each case, free
and clear of all
mortgages, pledges, liens, security interests, claims,
restrictions or
encumbrances of any kind except such as (a) are described
in the Offering
Memorandum or (b) do not, singly or in the aggregate,
materially
affect the value of such property and do not interfere with the
use made and
proposed to be made of such property by AMF, the Company, the
Guarantors or
any of their respective subsidiaries; and all of the leases
and subleases
material to the business of AMF, the Company, the Guarantors
and
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their respective
subsidiaries, considered as one enterprise, and under
which AMF, the
Company, the Guarantors or any of their respective
subsidiaries
holds properties described in the Offering Memorandum, are in
full force and
effect, and none of AMF, the Company, the Guarantors or any
of their
respective subsidiaries has any notice of any claim of any sort
that has been
asserted by anyone adverse to the rights of AMF, the Company,
the Guarantors
or any of their respective subsidiaries under any of the
leases or
subleases mentioned above, or affecting or questioning the
rights
of AMF, the
Company, the Guarantors or any of their respective subsidiaries
to the continued
possession of the leased or subleased premises under any
such lease or
sublease, which in either case, would result in a Material
Adverse
Effect.
(xxvi) ENVIRONMENTAL LAWS. Except as described in the Offering
Memorandum and
except such matters as would not reasonably be expected to,
singly or in the
aggregate, result in a Material Adverse Effect, (A) none
of AMF, the
Company, the Guarantors or any of their respective subsidiaries
is in violation
of any federal, state, local or foreign statute, law, rule,
regulation,
ordinance, code, policy or rule of common law or any judicial
or
administrative interpretation thereof, including any judicial
or
administrative
order, c
