EXHIBIT 4
[EXECUTION COPY]
THIRD AMENDMENT
THIS THIRD AMENDMENT, dated as of March 15, 1999 (this "Amendment"),
is among AMC ENTERTAINMENT INC., a Delaware corporation (the "Borrower"),
and the Lenders (as defined below) signatories hereto.
W I T N E S S E T H:
WHEREAS, the Borrower, certain financial institutions from time to
time parties thereto (collectively, the "Lenders"), The Bank of Nova
Scotia as administrative agent for the Lenders (the "Administrative
Agent") and Bank of America National Trust and Savings Association as
documentation agent (the "Documentation Agent") are parties to the Amended
and Restated Credit Agreement, dated as of April 10, 1997 ( as further
amended, supplemented, amended and restated or otherwise modified prior
to the date hereof, the "Existing Credit Agreement"); and
WHEREAS, the Borrower has requested that the Lenders amend the
Existing Credit Agreement in certain respects, as described below; and
WHEREAS, the Lenders have agreed, subject to the terms and
conditions set forth herein, to amend the Existing Credit Agreement as
set forth below (the Existing Credit Agreement, as amended by this
Amendment, being referred to as the "Credit Agreement");
NOW, THEREFORE, in consideration of the agreements herein contained,
and for other valuable consideration receipt of which is hereby
acknowledged, the parties hereto hereby agree as follows.
PART I
DEFINITIONS
SUBPART 1.1. Definitions. Terms for which meanings are provided in
the Existing Credit Agreement are, unless otherwise defined herein or the
context otherwise requires, used in this Amendment with such meanings.
PART II
AMENDMENTS TO THE
EXISTING CREDIT AGREEMENT
Effective on (and subject to the occurrence of) the Third Amendment
Effective Date (as defined in Subpart 3.1), the Existing Credit Agreement
is hereby amended in accordance with this Part.
SUBPART 2.1. Amendments to Article I. Article I of the Existing
Credit Agreement is hereby amended as set forth in Subparts 2.1.1 and
2.1.2.
SUBPART 2.1.1. Section 1.1 of the Existing Credit Agreement is
hereby amended by inserting the following definitions in such Section in
the appropriate alphabetical sequence:
"1999 Subordinated Note Indenture" means the Indenture dated as
of January 27, 1999 pursuant to which the 1999 Subordinated Notes
were issued between the Borrower and The Bank of New York as the
trustee, as amended, supplemented or otherwise modified and in
effect from time to time in accordance with Section 8.2.6.
"1999 Subordinated Notes" means the Borrower's $225,000,000 9 1/2%
Senior Subordinated Notes due 2011 issued pursuant to the 1999
Subordinated Note Indenture.
"Actual Full Quarter Operating Cash Flow" of an Annualized
Theatre means the sum of "Actual Operating Cash Flow" from such
Annualized Theatre for each Included Quarter, as calculated in the
manner set forth in Schedule III hereto, with any changes to such
Schedule III being subject to the prior approval of the Required
Lenders.
"Annualization Factor" means the sum of annualization factors
set forth below for Included Quarters:
Fiscal Quarter ending March 31 of each year 0.21
Fiscal Quarter ending June 30 of each year 0.21
Fiscal Quarter ending September 30 of each year 0.32
Fiscal Quarter ending December 31 of each year 0.26;
provided, that with the prior approval of the Administrative Agent
(but no more than one time in any four consecutive Fiscal Quarters),
the Borrower may increase or decrease the Annualization Factor for
any Fiscal Quarter by up to 0.02 (so long as the sum of the
resulting Annualization Factors equals 1.00).
"Annualized EBITDA" means, for the Borrower and its Consolidated
Subsidiaries, as of the last day of any Fiscal Quarter (computed for
the period consisting of such Fiscal Quarter and each of the three
immediately preceding Fiscal Quarters),
(a) Consolidated EBITDA; plus
(b) Pro Forma EBITDA for Annualized Theaters; minus
(c) Actual Full Quarter Operating Cash Flow attributable
to such Annualized Theatres.
Notwithstanding the foregoing, (i) Annualized EBITDA during any
applicable period attributable to a particular theatre which was (x)
permanently closed for business during a Fiscal Quarter or (y)
acquired by the Borrower or a Consolidated Subsidiary during a
Fiscal Quarter, shall be determined on a pro forma basis as if such
closure or acquisition had occurred on the first day of the most
recently completed period of four full Fiscal Quarters; and (ii) for
purposes of calculating Annualized EBITDA, Consolidated Net Income
shall be determined without giving effect to (x) costs incurred in
connection with the permanent closing of any theatre during any
applicable period, (y) costs incurred in connection with any newly
opened theatre prior to such opening, or (z) gains or losses
occurring in connection with any Asset Sale.
"Annualized Theatres" means, for any period, newly constructed
or acquired theatres identified to the Administrative Agent that
have had more than one complete Fiscal Quarter of operation, but
less than four complete Fiscal Quarters of operation (each, an
"Annualized Theatre").
"Included Quarter" means each full Fiscal Quarter that an
Annualized Theatre was in operation during the measurement period.
"Multiplex" means any theatre owned by the Borrower or its
Subsidiary which has ten or less screens for viewing movies.
"Pro Forma EBITDA for Annualized Theatres" means, for any
period, the sum of the Pro Forma EBITDA for each Annualized Theatre,
calculated on an Annualized Theatre by Annualized Theatre basis in
accordance with the formula set forth below:
Pro Forma EBITDA for
each Annualized Theatre = Actual Full Quarter Operating Cash Flow
Annualization Factor
"Senior Leverage Ratio" means, as of the last day of any Fiscal
Quarter, the ratio of (i) Net Indebtedness (other than Subordinated
Debt) of the Borrower and its Consolidated Subsidiaries as of such
date to (ii) Annualized EBITDA of the Borrower and its Consolidated
Subsidiaries for the four most recent Fiscal Quarters ended on such
date.
"Third Amendment" means the Third Amendment, dated as of March
15, 1999,
among the Borrower and the Lenders party thereto.
"Third Amendment Effective Date" is defined in Subpart 3.1 of
the Third Amendment.
"Total Leverage Ratio" means, as of the last day of any Fiscal
Quarter, the ratio of (i) Net Indebtedness of the Borrower and its
Consolidated Subsidiaries as of such date to (ii) Annualized EBITDA
of the Borrower and its Consolidated Subsidiaries for the four most
recent Fiscal Quarters ended on such date.
SUBPART 2.1.2. Section 1.1 of the Existing Credit Agreement is
hereby further amended as follows:
(a) The definition of "Applicable Margin" is hereby amended in
its entirety to read as follows:
"Applicable Margin" means, (i) at all times prior to the Third
Amendment Effective Date, the Applicable Margin determined in
accordance with this Agreement (as in effect prior to the Third
Amendment Effective Date), and (ii) from (and including) the Third
Amendment Effective Date and thereafter, for any Loan, the amount
indicated below for each type of Loan based upon the Applicable
Margin Determination Ratio as computed on the Applicable Margin
Determination Ratio Certificate most recently submitted pursuant to
Section 8.1.1(f):
Applicable Margin LIBO Rate Base Rate
Determination Ratio Loans Loans
Greater than or equal to 5.5:1 2.50% 1.50%
Greater than or equal to 5:1
and less than 5.5:1 2.25% 1.25%
Greater than or equal to 4.5:1
and less than 5:1 2.00% 1.00%
Greater than or equal to 4:1
and less than 4.5:1 1.75% 0.75%
Greater than or equal to 3.5:1
and less than 4:1 1.50% 0.50%
Greater than or equal to 3:1
and less than 3.5:1 1.25% 0.25%
Greater than or equal to 2.5:1
and less than 3:1 1.00% 0.00%
Less than 2.5:1 0.75% 0.00%.
(b) The definition of "Asset Sale" is hereby amended by (i) re-
lettering clauses (x), (y) and (z) of such definition as clauses (w), (x)
and (y), (ii) deleting the word "and" prior to existing clause (z) and
inserting a comma in its place and (iii) adding a new clause (z) to read
as follows:
"and (z) from time to time, for purposes of clause (z) of
Section 8.2.14 and the requirement that Net Cash Proceeds be applied
pursuant to the terms of this Agreement, sales or dispositions of
Multiplex theatres."
(c) The definition of "Capitalized Lease Obligation" is hereby
amended by adding the following parenthetical phrase after the last word
in such definition:
"(together with Indebtedness in the form of operating leases entered
into by the Borrower or its Subsidiaries after May 21, 1998 and required
to be reflected on a consolidated balance sheet pursuant to EITF 97-10)."
(d) Clause (x) of the definition of "Cash Flow Coverage Ratio" is
hereby amended by deleting the phrase "Consolidated EBITDA", and inserting
the phrase "Annualized EBITDA" in its place.
(e) The lead in to the definition of "Subordinated Debt" and clauses
(A)(i) and (B)(i) of such definition are hereby amended in their entirety
to read as follows:
"Subordinated Debt" means the Old Subordinated Notes, the New
Subordinated Notes and the 1999 Subordinated Notes, and Guaranties
thereof as provided in the Old Subordinated Note Indenture, the New
Subordinated Note Indenture and the 1999 Subordinated Note
Indenture, and all other unsecured Indebtedness of the Borrower or
any Guarantor for money borrowed
(A) (i) which is subordinated in right of payment to the
Liabilities (including any extensions or increases thereof and
including all interest thereon accruing after the commencement
of any proceedings referred to in Section 9.1.4) pursuant to
subordination terms no less favorable to the Agents and Lenders
than the subordination terms governing the New Subordinated
Notes pursuant to the New Subordinated Note Indenture or the
1999 Subordinated Notes pursuant to the 1999 Subordinated Note
Indenture,
(B) (i) which is subordinated in right of payment to the
Liabilities (including any extensions or increases thereof and
including all interest thereon accruing after the commencement
of any proceedings referred to in Section 9.1.4) pursuant to
subordination terms (x) substantially similar to the
subordination terms governing the New Subordinated Notes
pursuant to the New Subordinated Note Indenture, or the 1999
Subordinated Notes pursuant to the 1999 Subordinated Note
Indenture, or (y) prevalent in the market for similar types of
transactions at the time such Subordinated Debt is issued,
SUBPART 2.2. Amendment to Article II. The Borrower and the Lenders
agree that the commitment fee payable pursuant to clause (a) of Section
2.3 of the Existing Credit Agreement shall, at all times prior to the
Third Amendment Effective Date, be calculated as set forth in the
Existing Credit Agreement and that from and after the Third Amendment
Effective Date, the grid contained in such clause shall be amended in its
entirety to read as follows:
Applicable Margin
Determination Ratio Rate
Greater than or equal
to 4.5:1 0.500%
Less than 4.5:1 0.375%
SUBPART 2.3. Amendments to Article VII. Article VII of the
Existing Credit Agreement is hereby amended by adding a new Section 7.20,
to read in its entirety as follows:
SECTION 7.20. Year 2000. Each Loan Party has reviewed the
areas within its business and operations which could be adversely
affected by, and has developed or is developing a program to address
on a timely basis, the "Year 2000 Problem" (that is, the risk that
computer applications used by such Loan Party may be unable to
recognize and properly perform date-sensitive functions involving
certain dates prior to and any date after December 31, 1999). Based
on such review and program, the Year 2000 Problem could not
reasonably be expected to have a Materially Adverse Effect.
SUBPART 2.4. Amendments to Article VIII. Article VIII of the
Existing Credit Agreement is hereby amended in accordance with Subparts
2.4.1 through 2.4.5.
SUBPART 2.4.1 Section 8.1.9 of the Existing Credit Agreement is
hereby amended by deleting the clause "Net Senior Indebtedness to
Consolidated EBITDA Ratio" each time it appears and replacing it with the
clause "Senior Leverage Ratio".
SUBPART 2.4.1. Section 8.2.3 of the Existing Credit Agreement is
hereby amended by deleting existing clauses (a) and (c) of such Section,
and inserting the following clauses in place thereof:
(a) the Total Leverage Ratio at the end of any Fiscal Quarter
ending during any period set forth below to exceed the ratio
set forth below across from such period:
Period Ratio
Third Amendment Effective Date
through (and including) March 29, 2001 6.0:1
March 30, 2001 through
(and including) March 28, 2002 5.5:1
Each Fiscal Quarter thereafter 5.0:1;
(c) the Senior Leverage Ratio at the end of any Fiscal Quarter
ending during any such period set forth below to exceed the
ratio set forth below across from such period:
Period Ratio
Third Amendment Effective Date
through (and including) March 29, 2001 4.00:1
March 30, 2001 through
(and including) March 28, 2002 3.75:1
Each Fiscal Quarter thereafter 3.50:1;
SUBPART 2.4.2. Clause (v) of Section 8.2.1 of the Existing Credit
Agreement is hereby amended by deleting the number "$40,000,000" appearing
in such clause and inserting the number "$75,000,000" in its place.
SUBPART 2.4.3. Clause (iv) of Section 8.2.12 of the Existing Credit
Agreement is hereby amended by deleting the number "$25,000,000" appearing
in such clause and inserting the number "$50,000,000" in its place.
SUBPART 2.4.4. Subclause (z) of clause (a) of Section 8.2.14 of the
Existing Credit Agreement is hereby amended by deleting the number
"$50,000,000" appearing in such clause and inserting the following in its
place:
"$50,000,000, provided, that on and after the Third Amendment
Effective Date, the Net Cash Proceeds from all Asset Sales occurring
prior to the Third Amendment Effective Date shall be disregarded
when determining the amount of such Net Cash Proceeds."
SUBPART 2.5. Amendment to Exhibit D ("Form of Compliance
Certificate"). Exhibit D of the Existing Credit Agreement is amended in
its entirety to read as set forth in Annex I hereto.
SUBPART 2.6. Addition of Schedule III. The Existing Credit Agreement
is hereby amended by adding the attached Schedule III as the new Schedule
III to the Existing Credit Agreement.
PART III
CONDITIONS TO EFFECTIVENESS
SUBPART 3.1. Effective Date and Conditions. This Amendment shall
become effective on the date (the "Third Amendment Effective Date") when
each of the conditions set forth in this Part have been satisfied.
SUBPART 3.1.1. Execution of Counterparts. The Administrative
Agent shall have received counterparts of this Amendment duly executed
and delivered on behalf of the Borrower and the Required Lenders.
SUBPART 3.1.2. Closing Certificate. The Administrative Agent
shall have received a Compliance Certificate, showing compliance with the
financial covenants set forth in Section 8.2.3 of the Credit Agreement,
including the Total Leverage Ratio and the Senior Leverage Ratio.
SUBPART 3.1.3. Resolutions. The Administrative Agent shall have
received a certificate, dated the Third Amendment Effective Date, of the
Secretary or an Assistant Secretary of the Borrower and each other Loan
Party as to:
(a) resolutions of its Board of Directors then in full force
and effect authorizing the execution, delivery and performance
of the Loan Documents to be executed hereunder; and
(b) the incumbency and signatures of those of its officers
authorized to act with respect to this Amendment and each Loan
Document executed by it;
upon which certificate the Administrative Agent and each Lender may
conclusively rely until the Administrative Agent shall have received a
further certificate of the Secretary or an Assistant Secretary of such
Loan Party canceling or amending such prior certificate.
SUBPART 3.1.4. Amendment Fee. The Administrative Agent shall have
received an amendment fee (but only for the account of each Lender that
has executed and delivered (including delivery by way of facsimile) a
copy of this Amendment to the attention of Xx. Xxxxxxx Xxxxx at Xxxxx,
Xxxxx & Xxxxx, 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (19th floor),
telecopy number 000-000-0000 at or prior to 1:00 p.m. New York time on
March 11, 1999) in the amount of 1/4 of 1% of such Lender's Commitment.
SUBPART 3.1.5. Affirmation and Consent. The Administrative Agent
shall have received an affirmation and consent in form and substance
satisfactory to it, duly executed and delivered by each Guarantor.
SUBPART 3.1.6. Legal Details, etc. All documents executed or
submitted pursuant hereto shall be satisfactory in form and substance to
the Administrative Agent and its counsel. The Administrative Agent and
its counsel shall have received all information, and such counterpart
originals or such certified or other copies of such materials, as the
Administrative Agent or its counsel may reasonably request. All legal
matters incident to the transactions contemplated by this Amendment shall
be satisfactory to the Administrative Agent and its counsel.
PART IV
MISCELLANEOUS PROVISIONS
SUBPART 4.1. Cross-References. References in this Amendment to any
Part or Subpart are, unless otherwise specified, to such Part or Subpart
of this Amendment.
SUBPART 4.2. Loan Document Pursuant to Existing Credit Agreement.
This Amendment is a Loan Document executed pursuant to the Existing
Credit Agreement and shall be construed, administered and applied in
accordance with all of the terms and provisions of the Existing Credit
Agreement.
SUBPART 4.3. Successors and Assigns. This Amendment shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns.
SUBPART 4.4. Full Force and Effect; Limited Amendment. Except as
expressly amended hereby, all of the representations, warranties, terms,
covenants, conditions and other provisions of the Existing Credit
Agreement and the Loan Documents shall remain unchanged and shall
continue to be, and shall remain, in full force and effect in accordance
with their respective terms. The amendments set forth herein shall be
limited precisely as provided for herein to the provisions expressly
amended herein and shall not be deemed to be an amendment to, waiver of,
consent to or modification of any other term or provision of the Existing
Credit Agreement, any other Loan Document referred to therein or herein
or of any transaction or further or future action on the part of the
Borrower or any Obligor which would require the consent of the Lenders
under the Existing Credit Agreement or any of the Loan Documents.
SUBPART 4.5. Governing Law. THIS AMENDMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW
YORK (INCLUDING FOR SUCH PURPOSES SECTION 5-1401 AND 5-1402 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), EXCEPT TO THE EXTENT
THE VALIDITY OR PERFECTION OF A SECURITY INTEREST HEREUNDER, OR REMEDIES
HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE
LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.
SUBPART 4.6. Payment of Fees and Expenses. The Borrower hereby
agrees to pay and reimburse the Administrative Agent for all its
reasonable fees and expenses incurred in connection with the negotiation,
preparation, execution and delivery of this Amendment and related
documents, including all reasonable fees and disbursements of counsel to
the Administrative Agent.
SUBPART 4.7. Execution in Counterparts. This Amendment may be
executed in any number of counterparts by the parties hereto, each of
which counterparts when so executed shall be an original, but all the
counterparts shall together constitute one and the same agreement.
SUBPART 4.8. Representations and Warranties. In order to induce
the Lenders to execute and deliver this Amendment the Borrower hereby
represents and warrants to the Lenders that
(a) the execution, delivery and performance by it of this
Amendment are within its corporate powers, have been duly authorized
by all necessary corporate action, and do not contravene (i) its
Organic Documents or (ii) any law or contractual restriction binding
on it;
(b) no authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory
body is required for the due execution, delivery and performance by
it of this Amendment;
(c) this Amendment constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms,
subject, as to enforceability, to the effect of (i) any applicable
bankruptcy, insolvency, moratorium or similar law affecting
creditors' rights generally, and (ii) the effect of general
principles of equity; and
(d) immediately after giving effect to this Amendment, no
Default has occurred and is continuing, and all of the statements
set forth in Section 6.2.1 and 6.2.2 of the Existing Credit
Agreement are true and correct.
SUBPART 4.9. Headings. The various headings of this Amendment are
inserted for convenience only and shall not affect the meaning or
interpretation of this Amendment or any provision hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their respective officers hereunto duly authorized as of
the day and year first above written.
AMC ENTERTAINMENT INC.
By: /s/ Xxxxx X. Xxxxx
Title: Co-Chairman of the Board,
President and Chief Financial
Officer
THE BANK OF NOVA SCOTIA
By: /s/ Xxx X. Xxxxxxx
Title: Authorized Signatory
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By: /s/ Xxxxxxx X. Xxxxxxx
Title: Vice President
THE BANK OF NEW YORK
By: /s/ Authorized Signatory
Title: Vice President
THE MITSUBISHI TRUST AND BANKING
CORPORATION
By: /s/ Xxxxxxxxx Xxxxxxx
Title: Senior Vice President
UNION BANK OF CALIFORNIA, N.A.
By: /s/ Xxxxx Xxxxx
Title: Assistant Vice President
CANADIAN IMPERIAL BANK OF COMMERCE
By: /s/ Xxxxxx Xxxx
Title: Executive Director
CIBC Xxxxxxxxxxx Corp. As Agent
FIRST UNION NATIONAL BANK
By: /s/ Authorized Signatory
Title: Director
CREDIT SUISSE FIRST BOSTON
By: /s/ Xxxxxx X. Xxxxx
Title: Director
By: /s/ Xxxxxxx Xxxxx
Title: Associate
BANK HAPOALIM, B.M.
By
Title:
THE DAI-ICHI KANGYO BANK, LTD., CHICAGO
BRANCH
By: /s/ Authorized Signatory
Title: Vice President
THE INDUSTRIAL BANK OF JAPAN, LIMITED
By: /s/ Authorized Signatory
Title: Vice President
THE LONG-TERM CREDIT BANK OF JAPAN LTD.
By:
Title:
THE SAKURA BANK, LIMITED
By: /s/ Authorized Signatory
Title: Joint General Manager
STB DELAWARE FUNDING TRUST I
By: /s/ Authorized Signatory
Title: Assistant Vice President
BANK BUMIPUTRA MALAYSIA BERHAD
By: /s/ Xxxxx Xxxxx Xxxxxx
Title: General Manager
THE SUMITOMO BANK, LTD.
By: /s/ Xxxx X. Xxxxxx
Title: Senior Vice President
U.S. BANK NATIONAL ASSOCIATION
By: /s/ Authorized Signatory
Title: Commercial Banking Officer
XXXXXX GUARANTY TRUST
COMPANY OF NEW YORK
By: /s/ Xxxx Xxxxxxx
Title: Vice President
ANNEX I
Form of Compliance Certificate
[TO COME]
SCHEDULE III
CALCULATION OF ACTUAL
FULL QUARTER OPERATING
CASH FLOW
THEATRE PROFILE
THEATRE ______
SCREENS______
SEATS______
Week __ Actual YTD Fiscal [1999][200_]
Admissions $_____________
Concessions _____________
Other revenues _____________
TOTAL REVENUES $_____________
Film Exhibition Costs _____________
Concession Costs _____________
Total Operating Expenses _____________
TOTAL COST OF OPERATIONS $
============
OPERATING CASH FLOW
BEFORE RENT _____________
Cash rent _____________
OPERATING CASH FLOW $
============
________________________________________________________________________
ANNEX I
EXHIBIT D
COMPLIANCE CERTIFICATE
The Bank of Nova Scotia,
as administrative
agent under the Credit
Agreement referred to below
(the "Administrative Agent"),
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Re: Amended and Restated Credit Agreement, dated as of April 10,
1997 (together with all amendments, if any, thereafter from
time to time made thereto, the "Credit Agreement"), among AMC
Entertainment Inc., a Delaware corporation (the "Borrower"),
the Lenders parties thereto and The Bank of Nova Scotia, as
Administrative Agent (capitalized terms used but not defined
herein having the respective meanings assigned thereto in the
Credit Agreement)
Gentlemen/Ladies:
The Borrower hereby certifies and warrants that as of ___, __ (the
"Computation Date"):
(a)the Total Leverage Ratio was approximately________ and in
any event not more than______ to 1, as computed on Attachment 1
hereto, which [complies] [does not comply] with the requirements of
clause (a) of Section 8.2.3 of the Credit Agreement which requires a
maximum of ____ to 1;
(b)the Cash Flow Coverage Ratio was approximately _______:1
and in any event not less than ___ :1, as computed on Attachment 1
hereto, which [complies] [does not comply] with the requirements of
clause (b) of Section 8.2.3 of the Credit Agreement which requires a
minimum of 1.40:1;
(c)the Senior Leverage Ratio was approximately ____ :1 and
in any event not more than ___ :1, as computed on Attachment 1
hereto, which (i) [complies] [does not comply] with the requirements
of clause (c) of Section 8.2.3 of the Credit Agreement which
requires a maximum of ____ to 1, and (ii) [requires] [does not
require] the Borrower and each Guarantor to execute a Pledge
Agreement or Subsidiary Pledge Agreement and take certain other
actions pursuant to Section 8.1.9 of the Credit Agreement;
(d)The aggregate principal amount of all Indebtedness
incurred or existing pursuant to Section 8.2.1(v) of the Credit
Agreement is $_____________, which [complies] [does not comply] with
the requirements of Section 8.2.1(v) of the Credit Agreement, which
requires a maximum principal amount of $75,000,000, as computed on
Attachment 1 hereto;
(e)The aggregate amount of all Investments made or
outstanding pursuant to Section 8.2.11(vi) of the Credit Agreement
is $__________, which [complies] [does not comply] with the
requirements of Section 8.2.11(vi) of the Credit Agreement, which
requires a maximum amount of $__________, as computed on Attachment
1 hereto;
(f)The aggregate amount of all obligations Guarantied
pursuant to Section 8.2.12(iv) of the Credit Agreement is $______,
which [complies] [does not comply] with the requirements of Section
8.2.12(iv) of the Credit Agreement, which requires a maximum amount
of obligations Guarantied of $50,000,000;
(g)The aggregate amount of Net Cash Proceeds from all Asset
Sales from and after December 27, 1995 for purposes of Section
8.2.14(a)(z) is $________ (as computed on Attachment 1 hereto) which
[complies] [does not comply] with the requirements of Section
8.2.14(a)(z) of the Credit Agreement, which requires a maximum
amount of $50,000,000; and
(h)except as set forth in Attachment 2 hereto, no Default
had occurred and was continuing.
IN WITNESS WHEREOF, the Borrower has caused this Compliance
Certificate to be executed and delivered by its duly Authorized Officer
this _____ day of ______ , _____.
AMC ENTERTAINMENT INC.
By:
Title:
ATTACHMENT 1
to
_ /_ /_ Compliance Certificate
I. Total Leverage Ratio:
0.Xxx Indebtedness:
Outstanding principal amount of Indebtedness of
the Borrower and its Consolidated Subsidiaries
(determined on a consolidated basis) as of the
Computation Date. . . . . . . . . . . . . . . . . . .$_________
minus
cash and Cash Equivalents of the Borrower and
its Consolidated Subsidiaries (determined on a
consolidated basis) at such date. . . . . . . . . . .$_________
equals
Net Indebtedness of the Borrower and its
Consolidated Subsidiaries (determined on a
consolidated basis) as of the Computation Date. . . .$_________
2. Annualized EBITDA (the sum of 2(a) plus 2(b) minus 2(c) below)$__________
(a) Consolidated EBITDA for purposes of computing Annualized EBITDA
equals (insert from (a)(xiii) below) . . . . .$________
(i) Consolidated Net Income of the Borrower and its Consolidated
Subsidiaries as of the Computation Date for the four Fiscal Quarters
then ended . . . . . . . . . . . . . . . . . . . . . . .$________
plus (to the extent deducted in determining
such Consolidated Net Income)
(ii) income taxes of the Borrower and its
Consolidated Subsidiaries paid or accrued in
accordance with GAAP (other than income taxes
attributable to extraordinary, unusual or non-
recurring gains or losses) for such period . .$________
(iii) Consolidated Interest Expense of the
Borrower and its Consolidated Subsidiaries for
such period . . . . . . . . . . . . . . . . . . . .$________
(iv) depreciation expense of the Borrower and
its Consolidated Subsidiaries for such period . . .$________
(v) amortization expense (including
amortization of capitalized debt issuance
costs) of the Borrower and its Consolidated
Subsidiaries for such period. . . . . . . . . . . .$________
(vi) other non-cash charges of the Borrower and
its Consolidated Subsidiaries (including non-
cash expenses recognized in accordance with
SFAS No. 106) for such period . . . . . . . . . . .$________
(vii) Sum of (a)(i) through (a)(vi) - Consolidated EBITDA$________
adjusted for:
(viii) costs incurred in connection with the
permanent closing of any theatre during any
applicable period . . . . . . . . . . . . . . . . .$________
(ix) costs incurred in connection with any
newly opened theatre during any applicable
period. . . . . . . . . . . . . . . . . . . . . . .$________
(x) gains or losses occurring in connection with any Asset Sale$________
(xi) Actual Operating Cash Flow attributable to closed theatres$________
(xii) Sum of (a)(viii) through (a)(xi). . . . . . .$________
(xiii) Difference between (a)(vii) and (a)(xii) . .$________
(b) Pro Forma EBITDA for Annualized Theaters equals (insert from box
(b)(iii) below). . . . . . . . . . . . . $_____________
(i) Actual Full Quarter Operating Cash Flow. . . . . . .$________
divided by
(ii) Annualization Factor . . . . . . . . . . . . . ________
equals
(iii) . . . . . . . . . . . . . . . . . . . . . . .$________
(c) Actual Full Quarter Operating Cash Flow attributable to such
Annualized Theatres equals sum of Actual Operating Cash Flow from each
such Annualized Theatre for each Included Quarter calculated in the
manner set forth in Schedule III to the Credit Agreement$________
3. Total Leverage Ratio:
the ratio of Item I.1 to Item I.2 . . . . . . . . ________:1
II. Cash Flow Coverage Ratio:
1. Annualized EBITDA
(Item I.2 above). . . . . . . . . . . . . . . . . .$________
2. (i) Consolidated Interest Expense of the
Borrower and its Subsidiaries as of the
Computation Date for the four most recent
Fiscal Quarters then ended plus (ii) the
current portion of Indebtedness with an
original maturity exceeding one year (other
than the portion of the Liabilities to be paid
in connection with the scheduled reduction of
the Total Commitment Amount on the Commitment
Termination Date) plus (iii) the amount of all
cash dividends paid on Capital Stock by the
Borrower or its Subsidiaries to Persons other
than the Borrower, any Guarantor or any Wholly-
Owned Subsidiary during such four Fiscal
Quarters plus (iv) amounts paid by the Borrower
or its Subsidiaries to Persons other than the
Borrower, any Guarantor or any Wholly-Owned
Subsidiary in respect of optional repurchases
and redemptions of Subordinated Debt (other
than the Old Subordinated Notes) and Capital
Stock (other than certain amounts with respect
to the repurchase of AMC Philadelphia Capital
Stock as provided in the Credit Agreement)
during such four Fiscal Quarters plus (v)
additional amounts paid during the four Fiscal
Quarters then ended with respect to Capitalized
Lease Obligations attributable to principal
(without duplication of amounts in clause (ii)
above). . . . . . . . . . . . . . . . . . . . . . .$________
3. Cash Flow Coverage Ratio:
The ratio of Item II.1 to Item II.2 . . . . . . . ________:1
III. Senior Leverage Ratio:
0.Xxx Indebtedness:
(a) Item I.1 above . . . . . . . . . . . . . . . .$________
(b) Subordinated Debt of the
Borrower and its Consolidated
Subsidiaries. . . . . . . . . . . . . . . . . . . .$________
(c) Difference between
1(a) and 1(b):. . . . . . . . . . . . . . . . . . .$________
2. Annualized EBITDA of the Borrower and its Consolidated Subsidiaries
for the Four Quarters preceding the Computation Date
(Item I.2 above). . . . . . . . . . . . . . . . . .$________
3. Senior Leverage Ratio:
the ratio of Item III.1(c) to Item III.2. . . . . ._______:1
IV.Indebtedness:
1. Indebtedness of the Borrower or Subsidiaries to
Persons other than the Borrower or any
Subsidiary pursuant to Section 8.2.1(v) of the
Credit
Agreement . . . . . . . . . . . . . . . . . . . . .$________
2. $75,000,000 . . . . . . . . . . . . . . . . . . .$75,000,000
3. Item IV.1 less Item IV.2 . . . . . . . . . . .$________
X.Xxxxxxxxxxx:
1. Investments by the Borrower or any Subsidiary
pursuant to Section 8.2.11(vi) of the Credit
Agreement . . . . . . . . . . . . . . . . . . . . .$________
2. $100,000,000 . . . . . . . . . . . . . . . . . . .$________
3. The greater of (i) 25% of Free Cash Flow or
(ii) 50% of Consolidated Net Income (or 100% of
Consolidated Net Income if a loss) calculated
on a cumulative basis from December 27, 1995 to
the Computation Date . . . . . . . . . . . . . . .$________
4. The aggregate Net Cash Proceeds from the
issuance or sale of Capital Stock (excluding
Disqualified Stock) of the Borrower to any
Person (other than a Subsidiary) from December
27, 1995 to the Computation Date . . . . . . . . .$________
5. With respect to any such Investment made after
December 27, 1995, an amount equal to the
lesser of the return of cash with respect to
such Investment and the initial amount of such
Investment, in either case, less the cost of
disposition of such Investment. . . . . . . . . . .$________
6. Item V.2 plus (or minus if a negative number)
Item V.3 plus Item V.4 plus Item V.5. . . . . . . .$________
VI.Asset Sales:
1. Aggregate Net Cash Proceeds from all Asset
Sales from and after the Third Amendment
Effective Date (including the Fair Market Value
of property received by the Borrower or any
Subsidiary in any like kind exchange of
theatres) . . . . . . . . . . . . . . . . . . . . .$________
2. Aggregate Net Cash Proceeds of all Asset Sales
where the assets sold in such Asset Sale were
contemporaneously leased back to the Borrower
or the applicable Subsidiary on fair market
terms from and after the Third Amendment
Effective Date . . . . . . . . . . . . . . . . . .$________
3. Aggregate Net Cash Proceeds of sales of Capital
Stock of Subsidiaries from and after the Third
Amendment Effective Date . . . . . . . . . . . . .$________
4. Item VI.1 less Item VI.2 less Item VI.3 (must
be less than $50,000,000) . . . . . . . . . . . . .$________
ATTACHMENT 2
to
__/__/__ Compliance Certificate
[Describe Defaults, if any, continuing on the Computation Date; if
no Defaults were so continuing, indicate "None"]
EXHIBIT G
APPLICABLE MARGIN DETERMINATION RATIO CERTIFICATE
The Bank of Nova Scotia,
as administrative
agent under the Credit
Agreement referred to below
(the "Administrative Agent"),
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: F.C.H. Xxxxx, Senior Assistant Agent
Re: Amended and Restated Credit Agreement, dated as of April 10,
1997 (together with all amendments, if any, thereafter from
time to time made thereto, the "Credit Agreement"), among AMC
Entertainment Inc., a Delaware corporation (the "Borrower"),
the Lenders parties thereto and The Bank of Nova Scotia, as
Administrative Agent (capitalized terms used but not defined
herein having the respective meanings assigned thereto in the
Credit Agreement)
Gentlemen/Ladies:
The Borrower hereby certifies and warrants that as of
_________,____ (the "Determination Date"), the Applicable Margin
Determination Ratio was _____ :1, as computed below:
5. Net Indebtedness of the Borrower and its
Consolidated Subsidiaries as of the Determination
Date. . . . . . . . . . . . . . . . . . . . . . . .$________
6. Consolidated EBITDA of the Borrower and its
Consolidated Subsidiaries for the four Fiscal
Quarters ending on the last day of the Fiscal
Quarter preceding such Determination Date as shown
in the most recently delivered Compliance
Certificate (the "Measurement Period"):
Consolidated Net Income of the Borrower and its
Consolidated Subsidiaries during the Measurement
Period. . . . . . . . . . . . . . . . . . . . . . .$________
plus (to the extent deducted in determining
Consolidated Net Income)
(i) income taxes of the Borrower and its
Consolidated Subsidiaries paid or accrued during
the Measurement Period in accordance with GAAP
(other than income taxes attributable to
extraordinary, unusual or non-recurring gains or
losses) . . . . . . . . . . . . . . . . . . . . . .$________
(ii) Consolidated Interest Expense of the Borrower
and its Consolidated Subsidiaries during the
Measurement Period. . . . . . . . . . . . . . . . .$________
(iii) depreciation expense of the Borrower and its
Consolidated Subsidiaries during the Measurement
Period. . . . . . . . . . . . . . . . . . . . . . .$________
(iv) amortization expense (including amortization of
capitalized debt issuance costs) of the Borrower and
its Consolidated Subsidiaries during the Measurement
Period. . . . . . . . . . . . . . . . . . . . . . .$________
(v) other non-cash charges of the Borrower and its
Consolidated Subsidiaries during the Measurement
Period (including non-cash expenses recognized in
accordance with SFAS No. 106) . . . . . . . . . . .$________
Total . . . . . . . . . . . . . . . . . . . . . . .$________
7. Applicable Margin Determination Ratio (ratio of
Item 1 to Item 2) . . . . . . . . . . . . . . . . .____ :1
8. Based on the Applicable Margin Determination Ratio
set forth above and, with respect to Applicable
Margin for LIBO Rate Loans and Base Rate Loans, the
Net Senior Indebtedness to Consolidated EBITDA Ratio:
(i) Applicable Margin for LIBOR Rate Loans. . . . .________%
(ii) Applicable Margin for Base Rate Loans. . . . .________%
(iii) Commitment fee percentage . . . . . . . . . .________%
(iv) Letter of Credit fee percentage. . . . . . . .________%
Except as set forth in Attachment 1 hereto, no Default had occurred
and was continuing as of the Determination Date.
IN WITNESS WHEREOF, the Borrower has caused this Applicable Margin
Determination Ratio Certificate to be executed and delivered by its duly
Authorized Officer this ______ day of _______ , _____ .
AMC ENTERTAINMENT INC.
By:
Title:
ATTACHMENT 1
to
__/__/__ Applicable Margin Determination Ratio Certificate
[Describe Defaults, if any, continuing on the Determination
Date; if no Defaults were so continuing, indicate "None"]
