EXHIBIT 10.24
FORBEARANCE AGREEMENT
AND TWELFTH AMENDMENT TO
AMENDED AND RESTATED CREDIT AGREEMENT
FORBEARANCE AGREEMENT AND TWELFTH AMENDMENT, dated as of March 4,
1999, 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, the Second Amendment and Waiver to
Amended and Restated Credit Agreement dated as of December 13, 1997, the Third
Amendment to Amended and Restated Credit Agreement dated as of January 7, 1998,
the Fourth Amendment to the Amended and Restated Credit Agreement dated as of
May 22, 1998, the Fifth Amendment and Waiver to Amended and restated Credit
Agreement dated as of August 14, 1998, the Sixth Amendment and Waiver to Amended
and Restated Credit Agreement dated as of October 1998, the Seventh Amendment
and Waiver to Amended and Restated Credit Agreement dated as of December 15,
1998, the Eight Amendment and Waiver to Amended and Restated Credit Agreement
dated as of December 21, 1998, the Ninth Amendment and Waiver to Amended and
Restated Credit Agreement dated as of January 8, 1999, the Tenth Amendment and
Waiver to Amended and Restated Credit Agreement dated as of January 14, 1999 and
the Forbearance Agreement and Eleventh Amendment to Amended and Restated Credit
Agreement dated as of February 1, 1999 (as so amended, the "Credit Agreement"),
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among Hollywood Theater Holdings, Inc. (the "Parent"), Hollywood Theaters, Inc.
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(the "Company"), the banks and other financial institutions parties thereto
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(collectively, the "Banks"; individually, a "Bank"), and Bank of America
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National Trust and Savings Association, as Administrative Agent for the Banks
(the "Administrative Agent").
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W I T N E S S E T H:
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WHEREAS, pursuant to the Credit Agreement, the Banks have made Loans
to the Company which remain outstanding;
WHEREAS, the Company is in default in the performance of certain of
its obligations under the Credit Agreement;
WHEREAS, the Parent and the Company have requested that the Banks, and
the Banks are willing to, forbear from taking certain action under the Credit
Agreement on the terms and conditions herein set forth; and
WHEREAS, the Parent and the Company have requested that the Banks, and
the Banks are willing to, amend certain terms and conditions under the Credit
Agreement as more fully set forth herein.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Defined Terms. Unless otherwise defined herein, capitalized
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terms used herein have the meanings assigned in the Credit Agreement, and the
following terms shall have the following meanings:
"Agreement": this Forbearance Agreement and Twelfth Amendment to the
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Amended and Restated Credit Agreement, as the same may from time to time be
amended, supplemented or otherwise modified.
"Cross-Default": the Event of Default under Section 8.1(e) of the
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Credit Agreement arising from the failure of the Company to make payment of
interest due on February 1, 1999 pursuant to the Indenture, dated as of
August 7, 1997 among Hollywood Theaters, Inc. an issuer, the guarantors
named therein and U.S. Trust Company of Texas, N.A., as trustee.
"Effective Date": the first date on which the condition precedent
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specified in Article IV shall have been satisfied or the satisfaction
thereof shall have been waived in accordance with the terms hereof.
"Forbearance Period": the period beginning on the Effective Date and
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ending on the earlier of (a) March 1, 1999 and (b) the Termination Date.
"Termination Date": the date of termination of this Agreement
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pursuant to Article VI.
ARTICLE II
LIMITATION ON REMEDIES
2.1 Forbearance. Notwithstanding the occurrence and continuance of
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the Cross-Default, the Administrative Agent and the Banks hereby agree to
forbear, during the Forbearance Period, from the exercise of any rights or
remedies under the Credit Agreement, the other Loan Documents and applicable law
in respect of the Cross-Default; it being understood that the foregoing is not
and shall not be construed as an amendment, waiver or modification of Section
8.1(e) of the Credit Agreement.
ARTICLE III
AMENDMENTS TO CREDIT AGREEMENT
3.1 Amendment to Section 1.1 of the Credit Agreement. Section 1.1 of
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the Credit Agreement is hereby amended by adding thereto the following
definition in the appropriate alphabetical order:
"Forbearance Agreement": the Forbearance Agreement and Twelfth
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Amendment to the Amended and Restated Credit Agreement, dated as of March
4, 1999.
3.2 Consent to Sales of Pad Sites. The banks hereby consent to the
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sale by the Company of certain "pad sites" located adjacent to the Company's
theaters located in Norman, Oklahoma, Lawrence, Kansas and Columbia, Missouri;
provided that the Net Proceeds of any such sales shall be deposited in a cash
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collateral account in the name of the Company at Bank of America National Trust
and Savings Association. Net Proceeds so deposited shall be withdrawn by the
Company and disbursed only upon (a) there being no availability under the
Revolving Loan Commitments and (b) receipt by the Administrative Agent of a
notice signed by a Responsible Officer stating the amount of the Net Proceeds
actually needed by the Company for working capital purposes and the intended use
of such funds.
ARTICLE IV
EFFECTIVE DATE
4.1 Effective Date. This Agreement shall become effective as of the
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date hereof but only upon (a) receipt by the Administrative Agent of
counterparts of this Agreement, duly executed and delivered by the Company, the
Administrative Agent and the Required Banks and (b) receipt by the
Administrative Agent of the fee set forth in section 7.3(b).
ARTICLE V
INTERPRETATION
5.1 Continuing Effect of the Credit Agreement. The Company, the
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Parent, the Administrative Agent and the banks hereby acknowledge and agree that
the credit Agreement shall continue to be and shall remain unchanged and in full
force and effect in accordance with its terms, except as expressly modified
hereby.
5.2 No Limitation on Remedies after Forbearance Period. The Company
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hereby acknowledges and agrees that, at the end of the Forbearance Period, the
provisions of Section 2.1 hereof shall become of no force and effect and the
Administrative Agent and the Banks shall be free, in accordance with the Credit
Agreement and the other Loan Documents, to declare the Loans and all other
amounts outstanding under the Credit Agreement to be due and payable and to
exercise and enforce, or to take steps to exercise and enforce, all other
rights, powers, privileges and remedies available to them under the Credit
Agreement, any other Loan Document or applicable law on
account of the Cross-Default (or any other Default or Event of Default) as if
this Agreement had not been entered into by the parties hereto.
5.3 No Waiver; Other Defaults or Events of Default. (a) Nothing
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contained in this Agreement shall be construed or interpreted or is intended as
a waiver of any rights, powers, privileges or remedies that the Administrative
Agent or the Banks have or may have under the Credit Agreement or any other Loan
Document on account of the Cross-Default, except as expressly provided herein.
(b) Nothing contained in this Agreement shall be construed or
interpreted or is intended as a waiver of or limitation on any rights, powers,
privileges or remedies that the Administrative Agent or the banks have or may
have under the Credit Agreement or any other Loan Document on account of any
Default or Event of Default other than the Cross-Default.
ARTICLE VI
EVENTS OF TERMINATION
Upon the occurrence of any of the following events:
(a) the Company or any of its Subsidiaries shall default in the
observance or performance of any agreement contained in this Agreement;
(b) the occurrence and continuance of a Default or Event of Default
(other than the Cross-Default); or
(c) any party (including, without limitation, any holder of Senior
Subordinated Notes) shall exercise any right or remedy under the Indenture,
dated as of August 7, 1997 (the "Senior Subordinated Indenture") among
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Hollywood Theaters, Inc., as issuer, the guarantors named therein and U.S.
Trust Company of Texas, N.A., as trustee, or commence any action, suit,
proceeding or claim with respect to the Senior Subordinated Indenture;
then, and in any such event, the provisions of Section 2.1 hereof shall
immediately and automatically terminate and thereafter such Section shall have
no force or effect.
ARTICLE VII
MISCELLANEOUS
7.1 Amendments and Waivers. This Agreement may be amended, modified
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or supplemented and waivers of or consents to departures from the provisions
hereof or thereof may be given provided the same are in writing and signed by
the Company, the Administrative Agent and the Required Banks.
7.2 No Waiver; Cumulative Remedies. No failure to exercise and no
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delay in exercising, on the part of the Administrative Agent or any Bank, any
right, remedy, power or
privilege hereunder, under the Credit Agreement, the other Loan Documents or
under applicable law, shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder, under the
Credit Agreement, the other Loan Documents or under applicable law preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights, remedies, powers and privileges provided in the
Credit Agreement, the other Loan Documents and herein are cumulative and not
exclusive of any rights, remedies, powers and privileges provided by law.
7.3 Payment of Fees and Expenses. (a) The Company hereby agrees to
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pay all reasonable costs, fees and expenses of the Administrative Agent,
including reasonable attorney's fees, in connection with the preparation,
execution and delivery of this Agreement.
(b) The Company further agrees to pay the Administrative Agent, for
the account of each Bank on or prior to the Effective Date, a fee in an amount
equal to $50,000, and such fee shall be due and payable on the Effective Date.
Such fee shall be in addition to any and all other fees and expenses required to
be paid from time to time by the Company to the Administrative Agent and/or the
Banks pursuant to the Credit Agreement.
7.4 Successors and Assigns. This Agreement shall be binding upon and
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inure to the benefit of each of the parties hereto and their respective
successors and assigns.
7.5 Counterparts. This Agreement may be executed by one or more of
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the parties to this Agreement on any number of separate counterparts and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument.
7.6 Reservation of Rights. Notwithstanding anything contained in
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this Agreement, the Company acknowledges that the Administrative Agent and the
Banks do not waive, and expressly reserve, the right to exercise, at any time
during the Forbearance Period, any and all of their rights and remedies under
(a) the Credit Agreement, any other Loan Documents and applicable law in respect
of the Cross-Default against any Person other than the Company or any other Loan
Party, (b) any other document or instrument, including, without limitation, the
right of the Administrative Agent to give a blockage notice in accordance with
the Indenture and (c) the Credit Agreement, any other Loan Document or
applicable law in respect of any Default or Event of Default other than the
Cross-Default.
7.7 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
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THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT
CONSIDERATION OF ITS CONFLICT OF LAWS PRINCIPLES, AND APPLICABLE FEDERAL LAW.
7.8 Representations and Covenants. (a) The Company hereby
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represents and warrants that, prior to the Effective Date, to the extent the
Company received written notification from a landlord of an event of default
under any lease to which the Company or any Subsidiary is a
lessee, which event of default resulted from the filing of a mechanic's lien
against the relevant leasehold property, the Company paid in full, in cash such
mechanic's lien within the time period provided for in such written
notification.
(b) The Company hereby covenants that, from and after the Effective
Date, to the extent the Company receives written notification from a landlord of
an event of default under any lease to which the company or any Subsidiary is a
lessee, which event of default shall have resulted from the filing of a
mechanic's lien against the relevant leasehold property, the Company shall pay
in full, in cash such mechanic's lien within the time period provided for in
such written notification.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
HOLLYWOOD THEATER HOLDINGS, INC.
By: /s/ James R. Featherstone
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James R. Featherstone
Vice President
HOLLYWOOD THEATERS, INC.
By: /s/ James R. Featherstone
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James R. Featherstone
Vice President
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Administrative
Agent
By: /s/ David Price
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Name: David Price
Title: Vice President
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as a Bank
By: /s/ F. A. Zagar
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Name: F. A. Zagar
Title: Vice President
THE BANK OF NOVA SCOTIA, as a Bank
By: /s/ Paul A. Weissenberger
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Name: P. A. Weissenberger
Title: Authorized Signatory
BANK ONE TEXAS, N.A., as a Bank
By: /s/ Bradley C. Peters
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Name: Bradley C. Peters
Title: Vice President
THE SUMITOMO BANK, LIMITED, as a Bank
By: /s/ H. W. Redding
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Name: H. W. Redding
Title: Vice President and Manager
By: /s/ Stan Marciniak
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Name: Stan Marciniak
Title: Vice President and Manager
Operations