EXHIBIT 10.16
FIFTH AMENDMENT AND WAIVER
TO
AMENDED AND RESTATED
CREDIT AGREEMENT
FIFTH AMENDMENT AND WAIVER TO AMENDED AND RESTATED CREDIT AGREEMENT, dated
as of August 14, 1998 (this "Fifth Amendment"), to the Amended and Restated
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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 (as so amended,
the "Credit Agreement"), among Hollywood Theater Holdings, Inc. (the "Parent"),
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Hollywood Theaters, Inc. (the "Company"), the banks and other financial
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institutions parties thereto (collectively, the "Banks"; individually, a
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"Bank"), and Bank of America National Trust and Savings Association, as
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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 agreed to make,
and have made, certain loans and other extensions of credit to the Borrower; and
WHEREAS, Parent and the Company have requested that the Administrative
Agent and the Banks waive certain terms and conditions under the Credit
Agreement as more fully set forth herein; and
NOW, THEREFORE, the parties hereto hereby agree as follows:
I. Defined Terms. Capitalized terms defined in the Credit Agreement
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and not otherwise defined herein shall have the meanings given to them in the
Credit Agreement.
II. Amendments to Credit Agreement. A. Section 1.1 of the Credit
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Agreement is hereby amended by adding thereto the following definitions in the
appropriate alphabetical order:
"Additional Equity Issuance": shall mean an issuance and sale by the
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Parent or the Company of a minimum of an additional $50,000,000 of its
Capital Stock, either through private placement or public offering..
"Fifth Amendment": that Fifth Amendment and Waiver to Amended and
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Restated Credit Agreement among the Parent, the Company, the Administrative
Agent and the Banks parties thereto.
"Monthly Test Period": as defined in the definition of "Monthly
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Compliance Certificate".
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B. Section 1.1 of the Credit Agreement is hereby amended by adding
the following language at the end of the definition of "Capital Expenditures":
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"Notwithstanding the foregoing, there shall be excluded from the
annual Capital Expenditures Cap expenditures made in connection with
(i) reprogramming required to permit the proper functioning (but only
to the extent that such proper functioning would otherwise be
impaired by the occurrence of the year 2000) in and following the
year 2000 of computer systems and other equipment containing embedded
microchips, in either case owned or operated by the Company or used
or relied upon in the conduct of the Company's business, (ii) the
testing of all such systems and other equipment as so reprogrammed,
and (iii) the purchase and installation of related systems and
related equipment, as well as training on such reprogrammed and/or
modified computer systems and equipment. The aggregate of the
expenditures made in connection with the previous sentence shall in
no event exceed $2,000,000 over the course of the term of the Loans
(approximately $700,000 of which has been spent as of the date of the
Fifth Amendment)."
C. Section 1.1 of the Credit Agreement is hereby amended by deleting
therefrom the definition of "Monthly Compliance Certificate" in its entirety and
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substituting the following therefor:
"Monthly Compliance Certificate": a certificate duly
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executed by a Responsible Officer of the Parent and the Company, which
certificate will contain such financial calculations and other
information required thereby covering the period of the calendar month
for which the Monthly Compliance Certificate is being delivered (the
"Monthly Test Period"), and shall be 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 is a Monthly Test Period and ends as of the
last day 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
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Coverage Ratio, Consolidated Interest Coverage Ratio, etc.) shall be
redefined for such purposes only to refer to the end of the applicable
calendar month."
D. Section 2.1 of the Credit Agreement is hereby amended by adding
at the end thereof the following:
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"Notwithstanding the foregoing, the Maximum Available Revolving Loan
Commitments for the Revolving Loan Cap Period from April 1, 1998
through September 30, 1998 (the final day of the last Revolving Loan
Cap Period) shall equal the aggregate amount of all Revolving Loan
Commitments, provided, that for any Revolving Loan advances in excess
of $38,672,500, Beacon shall deliver for the benefit of the
Administrative Agent a letter of credit in form and substance
reasonably acceptable to the Administrative Agent and in an amount of
not less than the amount advanced to the Company, but in no event
shall that amount exceed $15,000,000; provided, however, if the
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Additional Equity Issuance is consummated on or prior to October 31,
1998, the Administrative Agent is directed to release such letter of
credit and return such letter of credit to the issuing bank."
E. Section 7.1(e) of the Credit Agreement is hereby amended by
deleting Section 7.1(e) in its entirety and substituting therefore the
following:
"(e) Minimum Consolidated Operating Cash Flow.
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Commencing on the Third Amendment Effective Date and ending on October 30,
1998, at the end of any calendar month 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:
Period Minimum Consolidated
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Operating Cash Flow
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Third Amendment Effective Date $ 13,000,000
to March 31, 1998
April 1, 1998 to $ 16,000,000
June 30, 1998
July 1, 1998 to $17,000,000"
October 30, 1998
F. Exhibit A to the Third Amendment is hereby amended by deleting
Exhibit A in its entirety and substituting therefor Exhibit A attached hereto.
III. Waivers. The Administrative Agent and the Banks hereby grant
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the following waivers on the following terms:
A. the provisions of subsection 2.7(d) hereby are waived
beginning on the date hereof and ending at 11:59 p.m. on October 30, 1998 (the
Additional Equity Issuance Waiver Period") solely to permit the Additional
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Equity Issuance to be consummated on or prior to
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October 31, 1998, without a corresponding mandatory prepayment of the Loans and
reduction of the Revolving Loan Commitments;
B. the provisions of the first sentence of subsection
4.3(f) are hereby waived until the end of the Additional Equity Issuance Waiver
Period; provided, however, that if the Additional Equity Issuance shall not have
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occurred prior to the end of the Additional Equity Issuance Waiver Period, the
Parent shall affect a Required Equity Contribution within forty-five (45) days
after the end of the Additional Equity Issuance Waiver Period in an amount not
less than the aggregate amount of all Construction Advances in excess of
$12,000,000 made from and after the Third Amendment Effective Date to and
including the last day of the Additional Equity Issuance Waiver Period, and any
failure of Parent to affect such Required Equity Contribution shall be an Event
of Default;
C. the provisions of subsection 7.1(a), 7.1(b) and subsection
7.1(d) are hereby waived until the end of the Additional Equity Issuance Waiver
Period, after which period of the foregoing waiver shall terminate and the
provisions of subsection 7.1(a), 7.1(b) and 7.1(d) shall be reinstated with full
force and effect.
IV. Payment of Expenses. The Company agrees to pay or reimburse
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the Administrative Agent for all of its out-of-pocket costs and reasonable
expenses incurred in connection with the negotiation, preparation and
distribution of documents prepared in connection herewith and the transactions
contemplated hereby, including, without limitation, the reasonable fees and
disbursements of counsel to the Administrative Agent.
V. No Other Amendments; Confirmation. Except as expressly
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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.
VI. Affirmation of Guarantees. The Parent hereby consents to
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the execution and delivery of this Fifth Amendment and reaffirms its obligations
under Article X of the Credit Agreement.
VII. Counterparts. This Fifth Amendment may be executed in any
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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.
VIII. GOVERNING LAW AND JURISDICTION. THIS FIFTH AMENDMENT SHALL
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BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK, WITHOUT CONSIDERATION IF ITS CONFLICT OF LAWS PRINCIPLES, AND APPLICABLE
FEDERAL LAW.
IN WITNESS WHEREOF, the parties hereto have caused this Sixth
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: /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 and as a
Bank
By: /s/ Carl F. Salas
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Carl F. Salas
Vice President
THE BANK OF NOVA SCOTIA, as a Bank
By: /s/ Vincent J. Fitzgerald
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Name: Vincent J. Fitzgerald, Jr.
Title: Authorized Signatory
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
BANK ONE TEXAS, N.A., as a Bank
By: /s/ Gina Norris
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Name: Gina Norris
Title: Vice President
EXHIBIT A TO THIRD AMENDMENT
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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
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HOLDINGS, INC., as guarantor thereunder, HOLLYWOOD THEATERS, INC., as borrower
thereunder (the "Company"), the Banks parties thereto, and BANK OF AMERICA
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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
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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))/*/
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(a) Indebtedness for borrowed money without duplica-
tion 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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(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) $__________________
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(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) $_________________________
(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) $_________________________
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(v) (q) minus (u) $ $_________________________________
(w) Ratio of (j) to (v) $_________________________________
(x) Maximum ratio permitted under
subsection 7.1(a) $_________________________________
II. Consolidated Interest Coverage Ratio (subsection 7.1(b))/**/
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(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))/***/
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(a) Part I, item (v) $_________________________________
____________________
/**/ / 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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(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 $_________________________________
(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))/****/
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(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))
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_______________________
/****/ / 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 for 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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(a) Part I, item (v) $_________________________________
(b) Minimum amount permitted under
subsection 7.1(e) $_________________________________
VI. Liens (subsection 7.2)
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(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)) $_________________________________
(c) [Omitted] $_________________________________
VII. Dispositions (subsection 7.3)
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(a) Dispositions pursuant to
subsection 7.3(g) for fiscal year
to _____________ $_________________________________
VIII. Investments (subsection 7.5)
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(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)
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(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] $_________________________________
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(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)
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(a) Permitted Swap Obligations
outstanding (subsection 7.9(b)) $_________________________________
(b) Contingent Obligations with respect
to Surety Obligation (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)
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(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)
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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):
[described] $_________________________________
(b) Undistributed Restricted Payments
applied toward Capital Expenditures
(subsection 7.12(b)) $_________________________________
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XIII. Capital Expenditures (subsection 7.16)
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(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) Expenditures made in connection
with (i) reprogramming required to
permit the prior functioning (but
only to the extent that such
proper functioning would otherwise
be impaired by the occurrence of
the year 2000) in and following
the year 2000 of computer systems
and other equipment containing
embedded microchips, in either
case owned or operated by the
Company or used or relied upon in
the conduct of the Company's
business, (ii) the testing of all
such systems and other equipment
as so reprogrammed, and (iii) the
purchase and installation of
related systems and related
equipment, as well as training on
such reprogrammed and/or modified
computer systems and equipment $_________________________________
(d) (a) minus (c) $_________________________________
(e) Maximum amount permitted $_________________________________
(f) Aggregate of all expenditures made in connection
with (c)
(g) Maximum amount of expenditures permitted to be
made in the aggregate in connection with (c) $2,000,000
XIV. Construction of New Screens (subsection 7.18)
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(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) _________________________________
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(d) Total of all movie screens under
construction and in operation _________________________________
(e) (d) dividend by (c) expressed as a
percentage _________________________________
(f) Maximum percentage permitted _________________________________
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: