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THIRD AMENDMENT
TO
AMENDED AND RESTATED
CREDIT AGREEMENT
THIRD AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT, dated as of
January 7, 1997 (this "Third Amendment"), to the Amended and Restated Credit
Agreement dated as of August 7, 1997, as amended by the First Amendment and
Waiver to Amended and Restated Credit Agreement dated as of November 13, 1997
and the Second Amendment and Waiver to Amended and Restated Credit Agreement
dated as of December 13, 1997 (as so amended, the "Credit Agreement"), among
Hollywood Theater Holdings, Inc. (the "Parent"), Hollywood Theaters, Inc. (the
"Company"), the banks and other financial institutions parties thereto
(collectively, the "Banks"; individually, a "Bank"), and Bank of America
National Trust and Savings Association, as Administrative Agent for the Banks
(the "Administrative Agent").
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, the Banks have agreed to make,
and have made, certain loans and other extensions of credit to the Borrower; and
WHEREAS, the Borrower has requested, and, upon this Third Amendment
becoming effective, the Banks have agreed, that certain provisions of the Credit
Agreement be amended in the manner provided for in this Third Amendment.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Defined Terms. Capitalized terms defined in the Credit Agreement
and not otherwise defined herein shall have the meanings given to them in
the Credit Agreement.
2. Amendments to Credit Agreement.
(a) Amendments to Article I.
(i) Section 1.1 of the Credit Agreement is hereby amended by
deleting therefrom the definitions of the following defined terms in their
respective entireties and substituting in lieu thereof the following
definitions:
"Applicable Margin": for the period (the "Initial Period") beginning on the
Third Amendment Effective Date and ending on the date on which a Compliance
Certificate in
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respect of the fiscal quarter ending March 31, 1998 and evidencing the Company's
compliance with all financial covenants and other matters set forth therein and
absence of any Defaults or Events of Default is delivered to the Administrative
Agent in accordance with subsection 6.3(b), and at any time during which the
Consolidated Total Leverage Ratio as at the end of the fiscal quarter most
recently ended exceeds 5.75 to 1, 3.00% in the case of Eurodollar Loans and
2.00% in the case of Base Rate Loans, thereafter, a rate per annum for the
relevant type of Loan set forth below opposite the Consolidated Total Leverage
Ratio determined in accordance with this Agreement as at the end of the fiscal
quarter most recently ended prior to the first day of such period:
Eurodollar Base Rate
Period Rate Loans Loans
------ ---------- ---------
Consolidated Total Leverage 2.750% 1.750%
Ratio is equal to or
greater than 5.5 to 1.0 but
less than 5.75 to 1.0
Consolidated Total Leverage 2.500% 1.500%
Ratio is equal to or
greater than 5.0 to 1.0 but
less than 5.5 to 1.0
Consolidated Total Leverage 2.250% 1.250%
Ratio is equal to or
greater than 4.5 to 1.0 but
less than 5.0 to 1.0
Consolidated Total Leverage 1.750% 0.750%
Ratio is equal to or
greater than 4.0 to 1.0 but
less than 4.5 to 1.0
Consolidated Total Leverage 1.375% 0.375%
Ratio is equal to or
greater than 3.5 to 1.0 but
less than 4.0 to 1.0
Consolidated Total Leverage 1.000% 0.00%; and
Ratio is less than 3.5 to 1.0
In the event that the Company fails to deliver a Compliance Certificate for
any fiscal quarter when due (whether during the Initial Period or thereafter),
then, commencing on the date on which such Compliance Certificate is due and
ending on the date the Company so delivers such Compliance Certificate, the
Applicable Margin shall be an amount equal to the sum of (i) the Applicable
Margin in
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effect hereunder on the date immediately preceding the subject Adjustment Date
(the "Prior Applicable Margin") and (ii) the amount set forth below:
(1) in the event that the Prior Applicable Margin was equal to or less
than 2.25% in the case of Eurodollar Rate Loans, or 1.25% in the case of
Base Rate Loans, .50%; and
(2) in the event that the Prior Applicable Margin was greater than
2.25% in the case of Eurodollar Rate Loans, or 1.25% in the case of Base
Rate Loans, .25%.
"Compliance Certificate": a certificate duly executed by a Responsible
Officer of the Parent and the Company, substantially in the form of Exhibit A to
the Third Amendment (with such changes thereto as may be agreed upon from time
to time by the Administrative Agent and the Parent and the Company), and
including therein, among other things, calculations supporting compliance with
Article VII.
"Consolidated Operating Cash Flow": for any period, with respect to the
Parent, the Company and the Subsidiaries, Consolidated Net Income for such
period plus, without duplication and to the extent deducted in determining
Consolidated Net Income for such period, the sum of (a) total income tax
expense, (b) interest expense, amortization or writeoff of debt discount and
debt issuance costs and commissions, discounts and other fees and charges
associated with Indebtedness (including the Loans), (c) depreciation and
amortization expense, (d) amortization of intangibles (including, but not
limited to, goodwill) and organization costs, (e) any extraordinary expenses or
losses (including, whether or not otherwise includable as a separate item in the
statement of such Consolidated Net Income for such period, losses on sales of
assets outside of the ordinary course of business) and (f) any other noncash
charges (excluding inventory writedowns), and minus, without duplication and to
the extent included in determining Consolidated Net Income for such period, the
sum of (a) non-cash interest income, (b) any extraordinary income or gains
(including, whether or not otherwise includable as a separate item in the
statement of such Consolidated Net Income for such period, gains on the sales of
assets outside of the ordinary course of business) and (c) any other noncash
income, all as determined on a consolidated basis.
For the purposes of calculating Consolidated Operating Cash Flow, with
respect to Theaters not owned at all times during the period involved in
connection with such calculation, there shall be (a) included the operating cash
flow for the trailing twelve months of any Theaters acquired by any Hollywood
Entity during the period involved in connection with such calculation and (b)
excluded the
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operating cash flow of any Theaters disposed of by any Hollywood Entity during
the period involved in connection with such calculation, assuming in each such
case that such Theaters were acquired or disposed of, as the case may be, on the
first day of such period.
Notwithstanding the foregoing, Consolidated Operating Cash Flow shall be
adjusted to account for newly constructed or substantially renovated Theaters
(such that none of the screens in any such Theater were in operation during such
renovation) which have not been in operation for at least twelve months as of
the end of the relevant Test Period but have been open and operating (or
re-opened and operating, as the case may be) for at least three consecutive
months (such three month period shall include any period of operation by any
predecessor owner(s) to a Hollywood Entity) by annualizing the actual applicable
operating cash flow (which shall be determined, on a per Theater basis, in the
same manner as Consolidated Operating Cash Flow as set forth in the first
paragraph of this definition) for such newly constructed or substantially
renovated Theater on a seasonally adjusted basis. Annualization on a seasonally
adjusted basis shall be determined by dividing (x) Consolidated Operating Cash
Flow in respect of Theaters that have been in operation for more than twelve
months which has been generated during the applicable period (in weeks) that the
newly constructed or substantially renovated Theater has been in operation by
(y) Consolidated Operating Cash Flow in respect of the same Theaters for the
trailing twelve months, such calculations being reasonably satisfactory in all
respects to the Administrative Agent.
(ii) Section 1.1 of the Credit Agreement is hereby amended
by adding thereto the following definitions in their appropriate alphabetical
order:
"Monthly Compliance Certificate": a certificate duly executed by a
Responsible Officer of the Parent and the Company, substantially in the form of
Exhibit A to the Third Amendment (with appropriate adjustments to reflect that
the Test Period to which such Monthly Compliance Certificate is applicable ends
as of a calendar month rather than a fiscal quarter and such other changes
thereto as may be agreed upon from time to time by the Administrative Agent and
the Parent and the Company), and including therein, among other things,
calculations supporting compliance with Article VII. For purposes of determining
the financial calculations required by the Monthly Compliance Certificate,
financial ratio terms which are defined in the Credit Agreement with reference
to the end of the applicable fiscal quarter (e.g., Consolidated Fixed Charge
Coverage Ratio, Consolidated Interest Coverage Ratio, etc.) shall be redefined
for such purposes only to refer to the end of the applicable calendar month.
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"Supermajority Banks": at any time Banks then holding in excess of 66-2/3%
of the then aggregate unpaid principal amount of the Loans, or, if no such
principal amount is then outstanding, Banks then having in excess of 66-2/3% of
the Commitments, or, if the Commitments have been terminated and no Loans are
then outstanding, Banks then owed in excess of 66-2/3% of the Aggregate
Specified Swap Amount.
"Third Amendment": that Third Amendment to Amended and Restated Credit
Agreement among the Parent, the Company, the Administrative Agent and the Banks
parties thereto."
"Third Amendment Effective Date": the date on which all of the conditions
precedent to the effectiveness of the Third Amendment shall have been satisfied.
Administrative Agent shall give prompt written notice to the Parent, the Company
and the Banks party to the Third Amendment of such date, provided that any
failure of Administrative Agent to give such notice shall not affect the
effectiveness of the Third Amendment."
(b) Amendments to Article II.
(i) Section 2.1 of the Credit Agreement is hereby amended by
adding at the end thereof the following:
"Notwithstanding the foregoing, at any time during which the Consolidated
Total Leverage Ratio is equal to or greater than 5.50 to 1, the aggregate amount
of Revolving Loans outstanding during the periods set forth below (each, a
"Revolving Loan Cap Period") shall not exceed the amount set forth below
corresponding to each such period (the "Maximum Available Revolving Loan
Commitments"):
Maximum Available
Revolving Loan Revolving Loan
Cap Period Commitments
-------------- -----------------
Third Amendment Effective $ 30,000,000
Date through March 31, 1998
April 1, 1998 through $ 40,000,000
September 30, 1998
From and after the last day of the last Revolving Loan Cap Period, the Maximum
Available Revolving Loan Commitments shall equal the aggregate amount of all
Revolving Loan Commitments; provided, that, if the Consolidated Total Leverage
Ratio shall be less than 5.50 to 1 for two consecutive months, then during such
time thereafter as the Consolidated Total Leverage Ratio continues to be less
than 5.50 to 1, the Maximum Available Revolving Loan Commitments shall equal the
aggregate amount of all Revolving Loan Commitments."
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(ii) Subsection 2.7(d) of the Credit Agreement is hereby
amended by adding the clause "the Required Equity Infusion, the Additional
Equity Infusion or other Required Equity Contributions" immediately after the
words "in connection with a permitted Acquisition," in the eighteenth and
nineteenth lines thereof.
(c) Amendments to Article IV.
(i) Section 4.3 of the Credit Agreement is hereby amended by
adding at the end thereof the following:
"(f) From and after the Third Amendment Effective Date until the date
on which a Compliance Certificate in respect of the fiscal quarter ending
March 31, 1999 and evidencing the Company's compliance with all financial
covenants and other matters set forth therein and absence of any Defaults
or Events of Default is delivered to the Administrative Agent in accordance
with subsection 6.3(b), the obligation of each Bank to make a Construction
Advance is subject to the condition that on or before the date such
Construction Advance is to be made, the Parent shall issue additional
Capital Stock for the purpose of making a capital contribution to the
Company or any other Subsidiary incurring such Land
Acquisition/Construction Costs (a "Required Equity Contribution") in an
amount of not less than the aggregate amount of the applicable Construction
Advance. Such Required Equity Contribution shall be used solely for the
purpose of funding a portion of the Land Acquisition/Construction Costs to
which the requested Construction Advance relates prior to or simultaneously
with the application of the requested Construction Advance. In connection
with the foregoing, the $12,000,000 received by the Parent in connection
with the issuance of Capital Stock between November 1, 1997 and December
20, 1997 may, at the option of the Hollywood Entities, be credited toward
Required Equity Contributions required to be made from and after the Third
Amendment Effective Date."
(d) Amendments to Article VI.
(i) Section 6.3(b) of the Credit Agreement is hereby amended
by adding at the end thereof (immediately preceding the final period) the
following:
"; provided, however, that if at the end of any fiscal quarter the
Consolidated Coverage Ratio is greater than 5.75 to 1, the Company shall
also furnish a Monthly Compliance Certificate for each calendar month in
the following fiscal quarter, which Monthly Compliance Certificate shall be
delivered to Administrative Agent not later than 30 days after the end of
each applicable calendar month; provided, however, that no such Monthly
Compliance Certificate shall be required for any month if the Company is
otherwise
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delivering a Compliance Certificate for the fiscal quarter or fiscal year ending
at the end of such calendar month"
(e) Amendments to Article VII.
(i) Section 7.1 of the Credit Agreement is hereby amended by
adding at the end thereof the following:
"(e) Minimum Consolidated Operating Cash Flow. Commencing on the Third
Amendment Effective Date and ending on September 30, 1998, at the end of
any fiscal quarter during such period of time, permit Consolidated
Operating Cash Flow for prior twelve month period to be less than the
amount set forth below for the corresponding period during which such
fiscal quarter ends:
Minimum Consolidated
Period Operating Cash Flow
------ -------------------
Third Amendment Effective $13,000,000
Date to March 31, 1998
April 1, 1998 to $16,000,000
June 30, 1998
July 1, 1998 to $20,000,000"
September 30, 1998
(ii) Subsection 7.1(a) of the Credit Agreement is hereby
amended and restated in its entirety as follows:
"(a) Consolidated Total Leverage Ratio. (i) Permit the
Consolidated Total Leverage Ratio at the end of any fiscal quarter ending
during any period listed below to exceed the ratio set forth below opposite
such period:
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Consolidated Total
Period Leverage Ratio
------ ------------------
September 30, 1998 to 5.75 to 1
December 31, 1998
January 1, 1999 to 5.50 to 1
March 31, 1999
April 1, 1999 to 5.25 to 1
June 30, 1999
July 1, 1999 to 5.0 to 1
December 31, 1999
January 1, 2000 to 4.75 to 1
December 31, 2000
January 1, 2001 to 4.50 to 1
December 31, 2001
January 1, 2002 and 4.25 to 1
thereafter
(ii) Notwithstanding the foregoing, with respect to any Test
Period ending during the periods set forth below, and provided that from
and after September 30, 1998 (including, without limitation, the last day
of such Test Period) the aggregate amount of Loans outstanding as of any
day does not exceed $20,000,000, the ratios listed below for each
applicable period shall apply in lieu of those set forth in subsection
7.1(a)(i):
Consolidated Total
Period Leverage Ratio
------ ------------------
September 30, 1998 to 5.75 to 1
March 31, 1999
April 1, 1999 to 5.50 to 1
June 30, 1999
July 1, 1999 to 5.25 to 1
September 30, 1999
October 1, 1999 to 5.00 to 1
December 31, 1999
January 1, 2000 to 4.75 to 1
December 31, 2000
January 1, 2001 to 4.50 to 1
December 31, 2001
January 1, 2002 and 4.25 to 1"
thereafter
(iii) Subsection 7.1(b) of the Credit Agreement is hereby
amended and restated in its entirety as follows:
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"(b) Consolidated Interest Coverage Ratio. Permit the
Consolidated Interest Coverage Ratio at the end of any fiscal quarter
ending during any period listed below to be less than the ratio set forth
below opposite such period:
Consolidated Interest
Period Coverage Ratio
------ --------------
Third Amendment Effective 1.10 to 1
Date to March 31, 1998
April 1, 1998 to 1.25 to 1
September 30, 1998
October 1, 1998 to 1.50 to 1
December 31, 1998
January 1, 1999 to 1.75 to 1
March 31, 1999
April 1, 1999 to 2.00 to 1
June 30, 1999
July 1, 1999 to 2.25 to 1
December 31, 1999
January 1, 2000 to 2.50 to 1
December 31, 2000
January 1, 2001 and 2.75 to 1"
thereafter
(iv) Subsection 7.1(c) of the Credit Agreement is hereby
amended and restated in its entirety as follows:
"(c) Permit the Consolidated Fixed Charge Coverage Ratio at
the end of any fiscal quarter ending at any time from and after March 31,
1998 to be less than the ratio of 1.10 to 1; provided, however, that at any
time commencing on the Third Amendment Effective Date to and including
March 30, 1998, the Consolidated Fixed Charge Coverage Ratio shall not be
less than the ratio of 1.00 to 1, provided, further, that for the purposes
of calculating the Consolidated Fixed Charge Coverage Ratio during such
period (but only during such period), the definition of "Consolidated Fixed
Charges" shall be as follows:
Consolidated Fixed Charges: on any date with respect to the
Parent, the Company and the Subsidiaries, the sum of the aggregate amount
of actual cash payments made during the prior twelve month period ending on
such date (without duplication) of (a) rental expense (including rental
payments under real property operating leases) of such Persons during such
period, (b) Consolidated Cash Interest for such period, (c) Capital
Expenditures of such Persons during such period, (d) required principal
repayments of all
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Indebtedness of such Persons during such period (excluding the repayment of
(i) the outstanding Loans on the Maturity Date, (ii) Indebtedness owing to
Xxxx Xxxxx Bank in the principal amount of up to $3,800,000 for
construction at the Xxxxxxxx Property and (iii) Indebtedness owing to The
Provident Bank in the aggregate principal amount of up to $136,850), (e)
Permitted Restricted Payments made by such Person in respect of its Capital
Stock during such period pursuant to subsection 7.12(a)(iii), and (f)
income tax expenses for the Hollywood Entities."
(v) Subsection 7.1(d) of the Credit Agreement is hereby
amended and restated in its entirety as follows:
"(d) Consolidated Senior Leverage Ratio. Permit the Consolidated
Senior Leverage Ratio at the end of any fiscal quarter ending during any
period listed below to exceed the ratio set forth below opposite such
period:
Consolidated
Senior Leverage
Period Ratio
------ ---------------
Third Amendment Effective 2.00 to 1
Date to December 31, 1998
January 1, 1999 to 2.00 to 1
June 30, 1999
July 1, 1999 and thereafter 2.00 to 1"
(f) Amendments to Article XI.
(i) Section 11.1 of the Credit Agreement is hereby amended
by adding at the end of the ninth line thereof after the words "purpose for
which given" (immediately after the semicolon) the following:
"provided, however, that, notwithstanding anything herein to the
contrary, no such waiver, amendment, or consent shall, unless in writing
and signed by the Supermajority Banks and the Company and acknowledged by
the Administrative Agent, amend or waive any of the provisions of Sections
2.1, 2.7, 4.3, 6.15, 7.1, 7.2, 7.3, 7.4, 7.5, 7.6, 7.7, 7.12, 7.16, 7.17,
7.18, 8.1(e) or 8.1(k);"
3. Conditions to Effectiveness. This Third Amendment shall become effective
on the date on which the Administrative Agent shall have received all of the
following, in form and substance satisfactory to the Administrative Agent and
each Bank, and in sufficient copies for each Bank:
(i) Third Amendment. This Third Amendment executed and
delivered by the Parent, the Company and the Required Banks;
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(ii) Resolutions; Incumbency.
(A) Copies of the resolutions of the board of directors of
the Parent, the Company and each Subsidiary that is a party to this Third
Amendment and/or any other agreements or documents to be delivered in
connection therewith (each such document, an "Amendment Document"; each
such Person, an "Amendment Party") authorizing the transactions
contemplated hereby or thereby, certified as of the Third Amendment
Effective Date by the Secretary or an Assistant Secretary of such Person;
and
(B) A certificate of the Secretary or Assistant Secretary of
each Amendment Party certifying the names and true signatures of the
officers of such Amendment Party authorized to execute, deliver and
perform, as applicable, the Amendment Documents and all other related
documents to be delivered by it hereunder;
(iii) Legal Opinion. A legal opinion of Xxxxx & Xxxxx,
L.L.P., counsel to the Parent and the Company, addressed to the Administrative
Agent and the Banks in form and substance satisfactory to the Administrative
Agent and the Banks;
(iv) Payment of Fees. Evidence of payment by the Company of
(A) all accrued and unpaid fees, costs and expenses to the
extent then due and payable on the Third Amendment Effective Date to the
Administrative Agent, Arranger or any Bank, together with Attorney Costs of
BofA to the extent invoiced prior to or on the Third Amendment Effective
Date, plus such additional amounts of Attorney Costs as shall constitute
BofA's reasonable estimate of Attorney Costs incurred or to be incurred by
it through the closing proceedings (provided that such estimate shall not
thereafter preclude final settling of accounts between the Company and
BofA);
(B) all commitment fees, costs and expenses of the
Administrative Agent or any Bank, all Attorney Fees of BofA and all such
other fees and expenses accrued but unpaid under the Credit Agreement
through the Third Amendment Effective Date; and
(C) all arrangement fees in respect of the Third Amendment,
which fees shall be applied for the ratable account of the Banks.
(v) Other Documents. Such other approvals, opinions,
documents or materials as the Administrative Agent may reasonably request.
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4. Representation and Warranties. To induce the Administrative Agent and
the Banks parties hereto to enter into this Third Amendment, the Parent and the
Company hereby jointly and severally represent and warrant to the Administrative
Agent and each Bank as of the Third Amendment Effective Date that:
(a) Corporate Existence and Power. Each Hollywood Entity:
(i) is duly organized, validly existing and, where
applicable, in good standing under the laws of the jurisdiction of its
formation or organization;
(ii) has the requisite power and authority under the statute
under which it is formed or organized and all governmental licenses,
authorizations, consents and approvals to own its assets, carry on its
business as presently conducted and to execute, deliver and perform its
obligations under the Loan Documents, except where the failure to possess
such governmental licenses, authorizations, consents and approvals either
individually or collectively could not reasonably be expected to have a
Material Adverse Effect;
(iii) is duly qualified as a foreign corporation and is
licensed and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification or license, except where the failure to be so
qualified or licensed could not reasonably be expected to have a Material
Adverse Effect; and
(iv) is in compliance with all Requirements of Law, except
where the failure to so comply (either individually or collectively) could
not reasonably be expected to have a Material Adverse Effect.
(b) Corporate Authorization; No Contravention. The
execution, delivery and performance by each Amendment Party of this Third
Amendment and each other Amendment Document to which such Person is party,
have been duly authorized by all necessary corporate action, and do not and
will not:
(i) contravene the terms of any of that Person's
Organization Documents;
(ii) conflict with or result in any breach or contravention
of, or the creation of any Lien under, any document evidencing any
Contractual Obligation to which such Person is a party or any order,
injunction, writ or decree of any Governmental Authority to which such
Person or its property is subject; or
(iii) violate any Requirement of Law.
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(c) Governmental Authorization. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required in connection with the
execution, delivery or performance by any Amendment Party of this Third
Amendment or any other Amendment Document.
(d) Binding Effect. This Third Amendment and each other Amendment
Document to which any Amendment Party is a party constitute the legal, valid and
binding obligations of such Amendment Party to the extent it is a party thereto,
enforceable against such Person in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency, or similar
laws affecting the enforcement of creditors' rights generally or by equitable
principles relating to enforceability.
(e) No Default. No Default or Event of Default exists. As of the Third
Amendment Effective Date, no Amendment Party is in default under or with respect
to any Contractual Obligation in any respect which, individually or together
with all such defaults, could reasonably be expected to have a Material Adverse
Effect, or that would, if such default had occurred after the Effective Date,
create an Event of Default under subsection 8.1(e) of the Credit Agreement.
(f) Financial Condition. (i) The audited consolidated financial
statements of the Hollywood Entities for the fiscal year ended December 31, 1996
and the unaudited consolidated financial statements of the Hollywood Entities
for the fiscal quarter ended September 30, 1997, and the related consolidated
statements of income or operations, shareholders' equity and cash flows for the
fiscal year or fiscal quarter, as the case may be, ended on that date:
(A) were prepared in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise
expressly noted therein;
(B) fairly present in all material respects the financial
condition of the Hollywood Entities on a consolidated basis as of the date
thereof and results of operations for the period covered thereby; and
(C) reflect as required by GAAP all material indebtedness
and other liabilities, direct or contingent, of the Hollywood Entities on a
consolidated basis as of the date thereof, including liabilities for taxes,
material commitments and Contingent Obligations.
(ii) Since December 31, 1996, there has been no development
or event which has had or could reasonably be expected to have a Material
Adverse Effect.
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(g) Full Disclosure. As of the Third Amendment Effective Date, all
Information that has been made available to the Administrative Agent or any Bank
by or on behalf of the Company prior to the date of this Third Amendment in
connection with the transactions contemplated herein is, taken together, true
and correct in all material respects (other than financial budgets and
projections) and does not contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
maintained therein not materially misleading in light of the circumstances under
which such statements were made.
(h) Representations and Warranties. The representations and warranties
made by the Company and the Parent in the Credit Agreement and the other Loan
Documents are true and correct in all material respects on and as of the Third
Amendment Effective Date, before and after giving effect to the effectiveness of
this Third Amendment, as if made on and as of the Third Amendment Effective
Date.
5. Payment of Expenses. The Company agrees to pay or reimburse the
Administrative Agent for all of its out-of-pocket costs and reasonable expenses
incurred in connection with the Amendment Documents, any other documents
prepared in connection herewith and the transactions contemplated hereby,
including, without limitation, the reasonable fees and disbursements of counsel
to the Administrative Agent.
6. No Other Amendments; Confirmation. Except as expressly amended, modified
and supplemented hereby, the provisions of the Credit Agreement and the other
Loan Documents are and shall remain in full force and effect.
7. Affirmation of Guarantees. The Parent hereby consents to the execution
and delivery of this Third Amendment and reaffirms its obligations under Article
X of the Credit Agreement.
8. Counterparts. This Third Amendment may be executed in any number of
separate counterparts, each of which, when so executed, shall be deemed an
original, and all of said counterparts taken together shall be deemed to
constitute but one and the same instrument.
9. GOVERNING LAW AND JURISDICTION. THIS THIRD AMENDMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT
CONSIDERATION OF ITS CONFLICT OF LAWS PRINCIPLES, AND APPLICABLE FEDERAL LAW.
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IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to
be duly executed and delivered by their respective proper and duly authorized
officers as of the day and year first above written.
HOLLYWOOD THEATER HOLDINGS, INC.
By:
Xxxxx X. Xxxxxxxxxxxx
Vice President
HOLLYWOOD THEATERS, INC.
By:
Xxxxx X. Xxxxxxxxxxxx
Vice President
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as
Administrative Agent and as a Bank
By:
Xxxx X. Xxxxx
Vice President
00
XXX XXXX XX XXXX XXXXXX, as a Bank
By:
Name:
Title:
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BANK ONE TEXAS, N.A., as a Bank
By:
Name:
Title:
18
THE SUMITOMO BANK, LIMITED, as a
Bank
By:
Name:
Title:
By:
Name:
Title:
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EXHIBIT A TO THIRD AMENDMENT
FORM OF
COMPLIANCE CERTIFICATE
TO: Bank of America National
Trust and Savings Association,
as Administrative Agent
Ladies/Gentlemen:
We refer to the Amended and Restated Credit Agreement, dated as of August
7, 1997 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among the undersigned, HOLLYWOOD THEATER HOLDINGS, INC., as
guarantor thereunder, HOLLYWOOD THEATERS, INC., as borrower thereunder (the
"Company"), the Banks parties thereto, and BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Administrative Agent. Terms defined in the Credit
Agreement are used herein as therein defined, and Section and subsection
references are to Sections and subsections in the Credit Agreement.
The undersigned hereby certifies and warrants to you and each Bank that the
following is a true and correct computation in respect of the fiscal quarter
ending _______ __, 19__ (the "Computation Date") of the following ratios and/or
financial restrictions with respect to the Parent, the Company and all
Subsidiaries on a consolidated basis contained in Section 7 for the Computation
Date:
I. Consolidated Total Leverage Ratio (subsection 7.1(a))*/
(a) Indebtedness for borrowed money without
duplication in the other items listed in (a)
through (h) $
*/ With respect to determination of Consolidated Total Leverage Ratio,
Consolidated Interest Coverage Ratio, Consolidated Fixed Charge Coverage
Ratio and Consolidated Senior Leverage Ratio, (i) the calculation of
Consolidated Cash Interest and Consolidated Fixed Charges in respect of
periods ending prior to the first anniversary of the Effective Date and
(ii) the calculation of Consolidated Operating Cash Flow in respect of
newly constructed theaters shall, in each case, be determined as provided
in the Credit Agreement.
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2
(b) Obligations issued, undertaken or assumed as the
deferred purchase price of property or services
(other than trade payables in the ordinary course
of business) $
(c) Non-contingent reimbursement or payment
obligations with respect to Surety Instruments
without duplication in the other items listed in
(a) through (h) $
(d) Obligations evidenced by notes, bonds, debentures
or similar instruments, including obligations so
evidenced incurred in connection with the
acquisition of property, assets or businesses
without duplication in the other items listed in
(a) through (h) $
(e) Indebtedness created or arising under any
conditional sale or other title retention agreement,
or incurred as financing, in either case with
respect to property acquired without duplication in
the other items listed in (a) through (h) $
(f) Obligations with respect to Capital Leases without
duplication in the other items listed in (a)
through (h) $
(g) Obligations as a lessee under synthetic or
leveraged leases without duplication in the other
items listed in (a) through (h) $
(h) Indebtedness referred to in (a) through (g) above
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 owned by the Parent, the Company or any
Subsidiary (even though the Person owning such
property has not assumed or become liable for the
payment of such Indebtedness), but only to the
extent of the value of such property, without
duplication in the other items listed in (a)
through (g) $
(i) Guaranty Obligations in respect of indebtedness or
obligations of others (other than a Hollywood
Entity) of the kinds referred to in (a) through
(h) and not included in (a) through (h) $
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3
(j) Subtotal of (a) through (i) $
(k) Consolidated Net Income for prior 12 month period
ending ____________ $
(l) Total income tax expense for such prior 12 month
period without duplication in (k) $
(m) Interest expense, amortization or writeoff of debt
discount or debt insurance costs and commissions,
discounts and other fees and charges associated
with Indebtedness (including the Loans) for such
prior 12 month period without duplication in (k) $
(n) Depreciation and amortization expense and
amortization of intangibles (including goodwill)
and organization costs for such prior 12 month
period without duplication in (k) $
(o) Extraordinary expenses or losses for such prior 12
month period without duplication in (k) $
(p) Other non-cash charges (excluding inventory
writedowns) for such prior 12 month period without
duplication in (k) $
(q) Subtotal of (k) through (p) $
(r) Non-cash interest income for such prior 12 month
period (to the extent included in (k)) $
(s) Extraordinary income and gains for such prior 12
month period (to the extent included in (k)) $
(t) Other non-cash income for such prior 12 month
period (to the extent included in (k)) $
(u) Subtotal (r) through (t) $
(v) (q) minus (u) $
(w) Ratio of (j) to (v)
(x) Maximum ratio permitted under subsection 7.1(a)
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4
II. Consolidated Interest Coverage Ratio (subsection 7.1(b))*/
(a) Part I, item (v) $
(b) Aggregate interest expense for prior 12 month
period ending ____________ $
(c) Non-cash interest expenses included in (b) $
(d) (b) minus (c) $
(e) Ratio of (a) to (d)
(f) Minimum ratio permitted by subsection 7.1(b)
III. Consolidated Fixed Charge Coverage Ratio (subsection 7.2(c))**/
(a) Part I, item (v) $
(b) Rental expense (including payments under real
property operating leases) for prior 12 month
period ending ____________ $
(c) Part II, item (d) $
(d) Capital Expenditures for such prior 12 month
period $
(e) Required principal repayments on all Indebtedness
for such prior 12 month period $
*/ With respect to determination of Consolidated Total Leverage Ratio,
Consolidated Interest Coverage Ratio, Consolidated Fixed Charge Coverage
Ratio and Consolidated Senior Leverage Ratio, the calculation of
Consolidated Cash Interest and Consolidated Fixed Charges in respect of
periods ending prior to the first anniversary of the Effective Date and
Consolidated Operating Cash Flow in respect of newly constructed theaters
shall each be determined as provided in the Credit Agreement.
**/ With respect to determination of Consolidated Total Leverage Ratio,
Consolidated Interest Coverage Ratio, Consolidated Fixed Charge Coverage
Ratio and Consolidated Senior Leverage Ratio, the calculation of
Consolidated Cash Interest and Consolidated Fixed Charges in respect of
periods ending prior to the first anniversary of the Effective Date and
Consolidated Operating Cash Flow in respect of newly constructed theaters
shall each be determined as provided in the Credit Agreement.
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(f) Permitted Restricted Payments made pursuant to
subsection 7.12(a)(iii) for such prior 12 month
period $
(g) Subtotal (b) through (f) $
(h) Ratio of (a) to (g)
(i) Minimum ratio permitted by subsection 7.1(c)
IV. Consolidated Senior Leverage Ratio (subsection 7.1(d))*/
(a) Part I, item (j), other than Indebtedness in
respect of the Senior Subordinated Notes and the
Senior Subordinated Indenture $
(b) Part I, item (v) $
(c) Ratio of (a) to (b) $
(d) Maximum ratio permitted under subsection 7.1(d) $
V. Minimum Consolidated Operating Cash Flow (subsection 7.1(e))
(a) Part I, item (v) $
(b) Minimum amount permitted under subsection 7.1(e) $
VI. Liens (subsection 7.2)
(a) Purchase money security interests not to exceed
$5,000,000 in the aggregate (subsection 7.2(i)) $
(b) Liens securing obligations in respect of Capital
Leases not to exceed $5,000,000 in the aggregate
(subsection 7.1(j)) $
*/ With respect to determination of Consolidated Total Leverage Ratio,
Consolidated Interest Coverage Ratio, Consolidated Fixed Charge Coverage
Ratio and Consolidated Senior Leverage Ratio, the calculation of
Consolidated Cash Interest and Consolidated Fixed Charges in respect of
periods ending prior to the first anniversary of the Effective Date and
Consolidated Operating Cash Flow in respect of newly constructed theaters
shall each be determined as provided in the Credit Agreement.
24
6
(c) [Omitted] $
VII. Dispositions (subsection 7.3)
(a) Dispositions pursuant to subsection 7.3(g) for
fiscal year to ________ $
VIII. Investments (subsection 7.5)
(a) Total Investments in the form of cash equivalents
(subsection 7.5(a)) $
(b) Acquisitions not to exceed Acquisition Costs of
$40,000,000 in the aggregate for such prior 12
month period (subsection 7.5(c)) $
(c) Investments pursuant to subsection 7.5(e) not to
exceed Acquisition Costs of $3,000,000 at any time
outstanding $
IX. Indebtedness (subsection 7.6)
(a) Indebtedness pursuant to subsection 7.6(c) not to
exceed an outstanding principal amount of
$5,000,000 in the aggregate at any time
outstanding $
(b) Indebtedness pursuant to subsection 7.6(d) $
(c) [Omitted]
(d) Intercompany Indebtedness pursuant to subsection
7.6(f) not to exceed an outstanding principal
amount of $5,000,000 in the aggregate $
(e) Indebtedness pursuant to subsection 7.6(g) not to
exceed an outstanding principal amount of
$5,000,000 in the aggregate $
(f) [Omitted] $
(g) Indebtedness pursuant to the Senior Subordinated
Notes and the Senior Subordinated Indenture
(subsection 7.6(i)) $
X. Contingent Obligations (subsection 7.9)
(a) Permitted Swap Obligations outstanding (subsection
7.9(b)) $
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(b) Contingent Obligations with respect to Surety
Obligations (other than the Letters of Credit
issued pursuant to Section 2.17 of the Credit
Agreement) not to exceed at any time $5,000,000 in
the aggregate (subsection 7.9(d)) $
XI. Leases (subsection 7.11)
(a) Aggregate amount to be paid under Capital Leases
not to exceed $5,000,000 (subsection 7.11(b)) $
XII. Restricted Payments (subsection 7.12)
For current fiscal year to date beginning after December 31, 1998, provided
that the Consolidated Leverage Ratio is less than 4.0 to 1 at the time of
such payments, and the following payments in any fiscal year do not exceed
25% of Excess Cash Flow for the prior fiscal year:
(a) Restricted Payments made (subsection 7.12(a)(iv)):
[describe] $
(b) Undistributed Restricted Payments applied toward
Capital Expenditures (subsection 7.12(b)) $
XIII. Capital Expenditures (subsection 7.16)
(a) Capital Expenditures for fiscal year to __________ $
(b) Cap Ex Shortfall from most recent fiscal year
ending prior to Computation Date (not to exceed
$500,000) $
(c) Maximum amount permitted $
XIV. Construction of New Screens (subsection 7.18)
(a) Movie screens under construction
(b) Movie screens in operation for 6 months or less
by any Person (excluding (a))
(c) Subtotal of (a) and (b)
(d) Total of all movie screens under construction
and in operation
(e) (d) divided by (c) expressed as a percentage
(f) Maximum percentage permitted
26
The Company, on behalf of itself and each of the other Loan Parties, hereby
further certifies and warrants to you and each Bank that no Default or Event of
Default has occurred and is continuing.
IN WITNESS WHEREOF, the Company has caused this Certificate to be duly executed
and delivered by a Responsible Officer this _____ day of ______________, ____.
Responsible Officer of the
Company:
By:
-------------------------------
Name:
Title:
