WAIVER AND THIRD AMENDMENT TO CREDIT AGREEMENT
THIS THIRD AMENDMENT TO CREDIT AGREEMENT (this "Third Amendment") is dated
as of September 27, 1999 (the "Effective Date") and is entered into by and among
United Artists Theatre Company, a Delaware corporation (the "Company"), the
several financial institutions party hereto (individually, a "Lender" and
collectively, the "Lenders"), Bank of America, N.A. (formerly known as Bank of
America National Trust and Savings Association), as administrative agent (in
such capacity, the "Administrative Agent"), BankBoston, N.A., as documentation
agent (in such capacity, the "Documentation Agent"), Merrill Lynch Capital
Corporation and Morgan Stanley Senior Funding, Inc., as co-syndication agents
(in such capacity, the "Co-Syndication Agents") and PNC Bank, N.A., as co-agent
(in such capacity, the "Co-Agent"), and amends the Credit Agreement dated as of
April 21, 1998 among the Company, certain of the Lenders and certain of the
Agents, as amended by a First Amendment and Master Assignment and Acceptance
Agreement dated as of June 11, 1998 and a Second Amendment dated as of March 31,
1999 (as so amended, the "Agreement").
RECITALS
A. Pursuant to Section 6.02(b) of the Agreement, the Company has
delivered to the Administrative Agent and the Lenders a compliance certificate
dated August 27, 1999 (the "July 1, 1999 Compliance Certificate") which, based
on computations from the financial statements of the Company as of July 1, 1999,
demonstrates that certain Defaults and Events of Default have occurred under the
Agreement.
B. The Company has requested that such Defaults and Events of Default
be waived and that the financial covenants in the Agreement be amended
consistent with the Company's projections of the future financial performance of
the Company.
C. On the terms and conditions contained in this Third Amendment, the
Majority Lenders have agreed to waive such Defaults and Events of Default, the
Lenders holding Revolving Commitments have agreed to make available to the
Company the undrawn amount of the Revolving Commitment, and the Company and the
Required Class Lenders have agreed to amend, among other things, the financial
covenants of the Company, the interest rates payable on the Loans, the Maturity
Date of Loans, and the application to be made of certain prepayments and
repayments of Loans.
NOW, THEREFORE, the parties hereto agree as follows:
1. TERMS. All capitalized terms used herein have the same meanings as in the
Agreement unless otherwise defined herein.
2. WAIVER. On the terms and conditions contained in this Third Amendment, the
Lenders hereby waive the Events of Default and Defaults occurring under Section
7.12 (Financial Ratios) of the Agreement as a result of the financial results of
the Company's performance for the period
1
ending July 1, 1999 as set forth in the July 1, 1999 Compliance Certificate.
This waiver is granted in reliance on, and its effectiveness is subject to,
the accuracy of the representations and warranties of the Company contained
in the July 1, 1999 Compliance Certificate and in this Third Amendment . The
Lenders do not waive any Defaults or Events of Default not described in the
July 1, 1999 Compliance Certificate.
3. AMENDMENTS TO AGREEMENT. The Company, the Lenders, the Issuing Lenders and
the Agents agree that the Agreement is hereby amended as follows:
3.01 PRICING. To equalize among the Tranches of Credit Exposures the
interest payable under the Agreement, Schedule 1.01(a), which is referred to in
the definition of "Applicable Amount" in Section 1.01, is amended to read as set
forth on Schedule 1.01(a) to this Third Amendment. To define the rate of
interest payable during the continuance of an Event of Default, a new sentence
is added at the end of Section 2.10(c) to read as follows: "Interest calculated
in accordance with this Section 2.10(c) is the 'Default Interest Rate.'"
3.02 MATURITY. To equalize the Maturity Dates of the Loans and
Commitments, the definitions of "Tranche B Term Loan Maturity Date" and "Tranche
C Term Loan Maturity Date" are amended to replace the dates set forth therein
(April 21, 2006, and April 21, 2007, respectively) with the date "April 21,
2005."
3.03 APPLICATION OF OPTIONAL PREPAYMENTS. To revise the effect and
application of optional prepayments made by the Company, Section 2.07 is amended
to read as follows:
"2.07 OPTIONAL PREPAYMENTS. Subject to Section 3.04, the Company may, at
any time or from time to time in accordance with this Agreement, prepay
Loans and Cash Collateralize Letters of Credit in whole or in part. All
such prepayments and cash collateralizations shall be applied in accordance
with Section 2.08(c). The Company shall deliver by Requisite Notice a
notice of any prepayment hereunder which must be received by the
Administrative Agent not later than 9:00 a.m. (San Francisco time) at least
three Business Days prior to the date of prepayment (or, in the case of a
payment applicable to Base Rate Loans, in accordance with Section
2.08(c)(iv), one Business Day prior to the date of prepayment), specifying:
(i) the amount of the prepayment, which shall be in an aggregate minimum
principal amount of $5,000,000 (in the case of Eurodollar Rate Loans) or in
an aggregate minimum principal amount of $1,000,000 (in the case of Base
Rate Loans) or any integral multiple of $1,000,000 in excess thereof; and
(ii) the date of prepayment. Such notice shall not thereafter be revocable
by the Company and the Administrative Agent will promptly notify each
Lender under the affected Tranche(s) of such Lender's ratable share of such
prepayment. If such notice is given, the Company shall make such
prepayment on the date specified in such notice, together with, in the case
of a prepayment of Eurodollar Rate Loans, accrued interest to each such
date on the amount prepaid and the amounts required pursuant to
Section 3.04."
2
3.04 AMORTIZATION. To equalize unscheduled amortization applicable to
the Commitments, and to the Revolving Loans, the Letter of Credit Usage, the
Tranche A Loans, the Tranche B Loans, and the Tranche C Loans, Section 2.08
is amended to read as follows (and, accordingly, all references in the
Agreement to Sections 2.08(a), 2.08(d) and 2.08(g) are hereby amended to be
references to Sections 2.08(a)(i), 2.08(a)(iv) and 2.08(c), respectively):
"2.08 PREPAYMENTS OF LOANS AND CERTAIN RELATED REDUCTIONS IN COMMITMENTS.
"(a) MANDATORY PREPAYMENTS. The Company shall prepay the Loans and
Cash Collateralize the Letters of Credit, for application in accordance
with Section 2.08(c) below, as follows:
"(i) Subject to clauses (A) and (B) below, upon the receipt of any
Net Cash Proceeds of any Disposition (other than Excluded
Dispositions) by the Company or any of its Subsidiaries, the
Company shall promptly make prepayments in an amount equal to 100%
of such Net Cash Proceeds.
"(A) So long as no Default or Event of Default shall have
occurred and be continuing, the Company may promptly deliver a
certificate to the Administrative Agent stating that it intends,
in good faith, to use some or all of such Net Cash Proceeds in a
Covered Transaction or for general corporate purposes. In such
case, the Company shall make a prepayment under this Section
2.08(a)(i) in an amount equal to the Asset Disposition Prepayment
Percentage of such Net Cash Proceeds and shall not be required to
make a prepayment using the Asset Disposition Reinvestment
Percentage of such Net Cash Proceeds; PROVIDED, that the Company
shall make a prepayment using the Asset Disposition Reinvestment
Percentage of Net Cash Proceeds upon the earliest to occur of (x)
the date which is 360 days after such Disposition if (1) a
definitive agreement to acquire or develop theatre properties or
other activities incidental thereto which would utilize such Net
Cash Proceeds has not theretofore been entered into or (2) the
Company fails to notify the Administrative Agent in writing that
the Company intends, in good faith, to use such Net Cash Proceeds
for general corporate purposes, (y) the last day specified in the
definition of 'Covered Transaction' that such Net Cash Proceeds
could have been used in a Covered Transaction, and (z) the date
any Default or Event of Default occurs. Any Net Cash Proceeds
not immediately paid to the Administrative Agent as permitted
above shall be deposited by the Company into a segregated deposit
account with Bank of America, N.A. within ten Business Days of
receipt and the Company shall invest such Net Cash Proceeds only
in Permitted Investments. As used herein, 'Asset Disposition
Reinvestment Percentage' means, until the date on which audited
financial statements for fiscal year ended December 28, 2000 are
delivered pursuant to Section 6.01(a) below if no Default or
Event of Default has occurred and is then continuing, 25% and,
thereafter, 100%.
3
As used herein, 'Asset Disposition Prepayment Percentage' means,
until the date audited financial statements for fiscal year
ended December 28, 2000 are delivered pursuant to Section 6.01(a)
below if no Default or Event of Default has occurred and is then
continuing, 75% and, thereafter, 0%; and
"(B) So long as no Event of Default shall have occurred and be
continuing, no prepayments under this Section 2.08(a)(i) are
required to be made until the aggregate Net Cash Proceeds from
Dispositions payable to the Lenders equal $1,000,000 or more; and
when the aggregate Net Cash Proceeds from Dispositions payable
to the Lenders equal $1,000,000 or more, the Company promptly
shall make a prepayment in an amount equal to all of such
retained amounts in accordance with this Section 2.08(a)(i).
"(ii) Following delivery of each compliance certificate pursuant
to Section 6.02(b), but not later than each April 30 of each year,
the Company shall make prepayments in an amount equal to the Net
Cash Proceeds Percentage (determined in accordance with the
definition of 'Net Cash Proceeds' in this Agreement) of any Excess
Cash during the preceding fiscal year.
"(iii) Upon the receipt by the Company or any of its Subsidiaries
of any Net Cash Proceeds of any additional Indebtedness (excluding
Indebtedness hereunder and Indebtedness permitted under Section
7.01) incurred or issued by the Company or any of its Subsidiaries,
the Company shall make prepayments in an amount equal to the Net
Cash Proceeds Percentage of such Net Cash Proceeds applicable to
Equity Proceeds pursuant to the definition of 'Net Cash Proceeds'
in this Agreement.
"(iv) Upon the receipt by the Company or any of its Subsidiaries
of any Net Cash Proceeds of any additional equity issued by the
Company or any of its Subsidiaries, the Company shall make
prepayments in an amount equal to the Net Cash Proceeds Percentage
(determined in accordance with the definition of 'Net Cash
Proceeds' in this Agreement) of such Net Cash Proceeds PROVIDED,
HOWEVER, that up to $5,000,000 of such Net Cash Proceeds received
upon the exercise of stock options or the purchase of stock by
officers and employees of the Company and its Subsidiaries shall
not be required to be prepaid.
"(v) The Company shall make prepayments in full promptly upon a
Change in Control Event or upon a Change in Control (as defined in
the Indentures pursuant to which the Senior Subordinated Notes were
issued) resulting in an offer to purchase or redeem Senior
Subordinated Notes.
"(b) CONCURRENT REDUCTIONS IN COMMITMENTS AND PREPAYMENTS.
(i) Concurrently with each reduction of Commitments pursuant to
Section 2.06 (except Section 2.06(a)), the Company shall prepay
Loans and/or Cash
4
Collateralize Letters of Credit in the relevant Tranches in an
amount equal to such reduction (which prepayment shall be made in
the case of the Revolving Commitment regardless of whether the
Revolving Commitment then exceeds the outstanding Revolving Loans
and Letters of Credit).
(ii) Concurrently with each prepayment of Loans and/or Cash
Collateralization of Letters of Credit pursuant to Section 2.08(a),
the Company shall be deemed to have reduced the Commitments of the
Tranches prepaid in an amount equal to such prepayment (or, in the
case of payments applied to Cash Collateralize Letters of Credit,
shall be deemed to have reduced the Revolving Commitment in the
amount paid to Cash Collateralize Letters of Credit).
"(c) APPLICATION OF PAYMENTS. Subject to the provisions of subsection
(v) below, each prepayment of Loans and/or Cash Collateralization of Letter
of Credits pursuant to Section 2.07 or Section 2.08(a) shall be applied as
follows:
"(i) Prepayments shall be allocated among the Tranches as
follows:
"(A) to the extent paid under Section 2.08(a), to prepay
principal on Revolving Loans and to Cash Collateralize
outstanding Letters of Credit in an aggregate amount equal to
the amount, if any, by which, on the date of payment pursuant
to Section 2.08(a), (1) the aggregate principal amount of
Revolving Loans and Letter of Credit Usage then outstanding
exceed (2) the aggregate principal amount of Revolving Loans
and Letter of Credit Usage outstanding on the Effective Date
of (and as defined in) the Third Amendment to this Agreement
(such aggregate amount on the Effective Date of the Third
Amendment being the 'Base Revolving Commitment').
"(B) to the extent paid under Section 2.07, to prepay
principal on Revolving Loans and to Cash Collateralize
outstanding Letters of Credit.
"(C) after paying Revolving Loans and Cash Collateralizing
Letters of Credit in accordance with clauses (A) and (B)
above, to the Lenders in accordance with their respective Pro
Rata Shares of the aggregate principal amount of Loans and
Letter of Credit Usage under all Tranches.
"(ii) Prepayments to be applied to Term Loans shall be applied
ratably to the remaining unpaid installments of the Term Loans then
outstanding.
"(iii) Prepayments of Revolving Loans and Cash Collateralization
of Letters of Credit shall be applied first against Revolving
Loans, and any prepayment amount remaining after payment in full of
the Revolving Loans shall be applied to Cash Collateralize
outstanding Letters of Credit.
"(iv) Any prepayments made on a day other than an Interest Payment
Date for any Loan shall be applied first to any Base Rate Loans
then outstanding and then to Eurodollar Rate Loans with the
shortest Interest Periods remaining; PROVIDED,
5
HOWEVER, that if the amount of Base Rate Loans then outstanding is
not sufficient to satisfy the entire prepayment requirement, the
Company may, at its option, place any amounts which it would
otherwise be required to use to prepay Eurodollar Rate Loans on a
day other than the last day of the Interest Period therefor in a
Cash Collateral Account until the end of such Interest Period at
which time such pledged amounts will be applied to prepay such
Eurodollar Rate Loans; PROVIDED, FURTHER, that the required date
for repayment shall not be extended pursuant to the foregoing
proviso (and such repayment when made shall be subject to Section
3.04): (i) if an Event of Default or Default has occurred and is
continuing or (ii) with respect to any Eurodollar Rate Loans with
an Interest Period that expires more than three months, after the
date prepayment would otherwise be due hereunder.
"(v) Notwithstanding the provisions of subsection (i) through (iii)
above, at any time, the Company may, in its sole discretion, elect
to give each Lender in any designated Tranche the right to waive
any prepayment to which it is otherwise entitled to receive under
Section 2.08(a). If any such Lender waives the right to receive
such prepayment, the amount that would have been used to prepay
such Lender shall be used instead to prepay other Lenders in the
designated Tranche not electing to so waive receipt of such
prepayment."
3.05 SHARING OF PAYMENTS, ETC. To permit payment of the Revolving Loans
and Cash Collateralization of Letters of Credit to the extent outstanding in
excess of the Base Revolving Commitment (as defined in Section 2.08(c) of the
Agreement), Section 2.15 is amended to read as follows:
"2.15 SHARING OF PAYMENTS, ETC.
"(a) If, other than as provided in Section 3.01, 3.03, 3.04 or 3.06, any
Lender shall obtain on account of the Loans made by it or Unreimbursed
Drawings, any payment (whether voluntary, involuntary, through the exercise
of any right of set-off, or otherwise) in excess of its Pro Rata Share of
payments on account of the Loans or Unreimbursed Drawings obtained by all
the Lenders under the Tranches entitled thereto in accordance with Section
2.15(b) below, such Lender shall forthwith (i) notify the Administrative
Agent of such fact, and (ii) purchase from the other Lenders such
participations in the Loans made by them or Unreimbursed Drawings as shall
be necessary to cause such purchasing Lender to share the excess payment
ratably with each Lender entitled thereto; PROVIDED, HOWEVER, that if all
or any portion of such excess payment is thereafter recovered from the
purchasing Lender, such purchase shall to that extent be rescinded and each
other Lender shall repay to the purchasing Lender the purchase price paid
thereto together with an amount equal to such paying Lender's Pro Rata
Share (according to the proportion of (i) the amount of such paying
Lender's required repayment to (ii) the total amount so recovered from the
purchasing Lender) of any interest or other similar amount paid or payable
by the purchasing Lender in respect of the total amount so recovered.
6
"(b) For purposes of this Section 2.15:
"(i) so long as no Event of Default shall have occurred and be
continuing, payments shall be made to the Lenders according to
their Pro Rata Shares of their respective Loans and/or Letter of
Credit Usage under the relevant Tranche(s) in accordance with this
Agreement; and
"(ii) following an Event of Default, payments shall be applied
"(A) FIRST to pay principal on Revolving Loans and to Cash
Collateralize outstanding Letters of Credit to the extent, if
any, on the date a Lender receives payment to be shared
pursuant to this Section 2.15, the sum of (1) the aggregate
principal amount of Revolving Loans and Letter of Credit
Usage exceed the Base Revolving Commitment (as defined in
Section 2.08(c) above); and
"(B) SECOND, after paying Revolving Loans and Cash
Collateralizing Letters of Credit in accordance with clause
(A) above, to pay the remaining Loans and to Cash
Collateralize outstanding Letters of Credit for application
under (x) the relevant Tranche(s) in accordance with this
Agreement unless all the Obligations have been accelerated or
are otherwise due and payable or (y) if all Obligations have
been accelerated or are otherwise due and payable, all
Tranches according to the Lenders' Pro Rata Shares of
outstanding Credit Exposures.
"(c) The Company agrees that any Lender so purchasing a participation
from another Lender pursuant to this Section may, to the fullest extent
permitted by law, exercise all its rights of payment (including the right
of set-off, but subject to Section 10.08) with respect to such
participation as fully as if such Lender were the direct creditor of the
Company in the amount of such participation. The Administrative Agent
shall keep records (which shall be conclusive and binding in the absence
of manifest error), of participations purchased pursuant to this Section
and shall in each case notify the Lenders following any such purchases;
PROVIDED, HOWEVER, that any failure by the Administrative Agent to so
notify the Lenders shall not alter the Lenders' rights or duties
hereunder."
3.06 CONDITIONS TO CREDIT EXTENSIONS. To add an additional condition
precedent to the obligation of each Lender to make any Revolving Loan and for
any Issuing Lender to issue, amend to increase the amount of or extend any
Letter of Credit, Section 4.02(d) is amended to read as follows:
"(d) Officer's Certificate. The Administrative Agent or the Issuing
Lender, with a copy to the Administrative Agent, as applicable, shall have
received a certificate of a Responsible Officer of the Company certifying
that, as of the date such Borrowing is requested and as of the date on
which such Borrowing is to be made:
7
"(i) to the best of such officer's knowledge, the Company and each
of the other Loan Parties is in compliance with all of the terms
and conditions of this Agreement and the Loan Documents;
"(ii) such Borrowing will not violate Section 1008 or Section 1018
of the Indentures pursuant to which the Senior Subordinated Notes
were issued;
"(iii) if such Borrowing is requested at any time prior to
February 1, 2001, unless otherwise agreed by Revolving Lenders
holding 66 2/3% of the Revolving Commitments, the consolidated
Operating Cash Flow of the Company and its Subsidiaries for the
twelve month period most recently ended was not less than:
---------------------------------------------------------
FOR THE TWELVE MONTH PERIOD ENDING NOT LESS THAN
ON THE LAST DAY OF FISCAL MONTH:
---------------------------------------------------------
October, 1999 $67,000,000
---------------------------------------------------------
November, 1999 $69,000,000
---------------------------------------------------------
December, 1999 $73,000,000
---------------------------------------------------------
January, 2000 $74,000,000
---------------------------------------------------------
February, 2000 $79,000,000
---------------------------------------------------------
March, 2000 $83,000,000
---------------------------------------------------------
April, 2000 $84,000,000
---------------------------------------------------------
May, 2000 $84,000,000
---------------------------------------------------------
June, 2000 $84,000,000
---------------------------------------------------------
July, 2000 $85,000,000
---------------------------------------------------------
August, 2000 $85,000,000
---------------------------------------------------------
September, 2000 $85,000,000
---------------------------------------------------------
October, 2000 $85,000,000
---------------------------------------------------------
November, 2000 $85,000,000
---------------------------------------------------------
December, 2000 $97,000,000
---------------------------------------------------------
"(iv) such Responsible Officer has obtained no knowledge of any
Default or Event of Default; and
"(iv) the representations and warranties made by the Company
contained in Article V are true and correct in all material
respects as of such dates."
3.07 REPORTING. To require the delivery of certain additional reports
by the Company, Section 6.01 is amended to delete Section 6.01(f) and to insert
in lieu thereof:
"(f) as soon as available, but in any event, not later than twenty (20)
days after the first day of each month, a copy of a cash budget in form and
substance satisfactory to the Administrative Agent for the twelve month
period beginning with the months during which such budget is delivered and
a statement of variances during the month just ended from any previously
delivered cash budget.
8
"(g) as soon as available, but in any event, not later than seven (7) days
after the first day of each month, a report on the status of "Project
Cleanup", substantially in the form of the report dated August 25, 1999
delivered to the Lenders with respect to "Project Cleanup" on or prior to
the Effective Date of (and as defined in) the Third Amendment to this
Agreement;
"(h) as soon as available, but in any event, not later than seven (7) days
after the first day of each month, a summary of admissions and concessions
revenues and attendance for the Company prepared on a consolidated basis,
in form and substance satisfactory to the Agent, for the month just ended;
and
"(i) as soon as available, but in any event, not later than twenty (20)
days after the first day of each month, an Operating Cash Flow report for
the Company prepared on a consolidated basis, in form and substance
satisfactory to the Agent, for the twelve month period just ended."
3.08 CERTIFICATE. To require the delivery of an additional
certificate evidencing compliance with the Agreement, Section 6.02 is amended
to re-designate subsection (f) as subsection (g) and to insert immediately
prior to such subsection (g) a new subsection (f) to read as follows:
"(f) On or before the first day of each month in which the Company
intends to pay principal or interest on account of the Senior Subordinated
Notes, a certificate of a Responsible Officer of the Company certifying
that, to the best of such officer's knowledge, immediately before and
after giving effect to such payment no Default or Event of Default will
have occurred and be continuing under this Agreement;"
3.09 FINANCIAL COVENANTS. To modify the financial covenants, Section
7.12 is amended to read as follows:
"7.12 Financial Ratios. The Company shall not:
"(a) As of the end of any fiscal quarter, commencing with the fiscal
quarter ending December 28, 2000, permit the Senior Leverage Ratio or the
Total Leverage Ratio to exceed the ratios set forth below:
PERIOD SENIOR TOTAL
LEVERAGE RATIO
- ---------------------------------------------------------------------------------
December 28, 2000 3.50:1.00 5.50:1.00
March 29, 2001 through January 3, 2002 3.00:1.00 5.00:1.00
March 28, 2002 and thereafter 3.00:1.00 4.50:1.00
9
"(b) As of the end of any fiscal quarter, commencing with the fiscal
quarter ending September 30, 1999, permit the ratio of (i) Operating Cash
Flow PLUS Pro Forma Lease Expense to (ii) Pro Forma Debt Service to be less
than (x) through September 28, 2000, 1.00 to 1.00, or (y) thereafter, 1.15
to 1.0;
"(c) As of the end of any fiscal quarter, commencing with the fiscal
quarter ending September 30, 1999, permit the ratio of (i) Operating Cash
Flow PLUS Consolidated Lease Expense, to (ii) Consolidated Interest Expense
PLUS Consolidated Lease Expense to be less than the ratios set forth below:
PERIOD MINIMUM RATIO
---------------------------------------------------------------------------
Through September 28, 2000 1.00 to 1.00
December 28, 2000 1.20 to 1.00
December 29, 2000 through March 31, 2003 1.40 to 1.00
April 1, 2004 and thereafter 1.50 to 1.00
"(d) For the fiscal years ending December 30, 1999 and December 28,
2000, make, on a Consolidated basis, Capital Expenditures in an aggregate
amount in excess of (i) the Maximum Permitted Capital Expenditure for such
year plus (ii) the amount, if any (up to $10,000,000) by which actual
Capital Expenditures made in the immediately prior fiscal year were less
than the Maximum Permitted Capital Expenditures; provided that the
aggregate amount added to Maximum Permitted Capital Expenditure pursuant to
this clause (ii) shall not exceed $10,000,000 in any fiscal year. For
purposes of this Section 7.12(d), 'Maximum Permitted Capital Expenditure'
means, (x) for the fiscal year ending December 30, 1999, $50,000,000 and
(y) for the fiscal year ending December 28, 2000 and, thereafter, until
audited financial statements are delivered pursuant to Section 6.01(a) for
fiscal year ended December 28, 2000 and no Default or Event of Default has
occurred and is continuing, $25,000,000.
"(e) Permit its Operating Cash Flow, determined on a Consolidated basis
for the four fiscal quarters ending on the dates set forth below, to be
less than the amounts set forth next to such dates:
- -------------------------------------------------------------------------------
FOUR FISCAL QUARTERS ENDING ON: OPERATING CASH FLOW
- -------------------------------------------------------------------------------
September 30, 1999 $70,000,000
- -------------------------------------------------------------------------------
December 30, 1999 $73,000,000
- -------------------------------------------------------------------------------
March 30, 2000 $83,000,000
- -------------------------------------------------------------------------------
June 29, 2000 $84,000,000
- -------------------------------------------------------------------------------
September 28, 2000 $85,000,000
- -------------------------------------------------------------------------------
10
- -------------------------------------------------------------------------------
December 28, 2000 $97,000,000
- -------------------------------------------------------------------------------
3.10 REAL ESTATE COLLATERAL. To provide that the Collateral may include
real estate in the State of California and certain other states, Section 9.10(c)
is amended to read as follows:
"(c) So long as the Obligations are secured by real estate in any Covered
Jurisdiction (as defined below), no Lender shall exercise any Restricted
Action (as defined below) with respect to the Company, any other Loan
Party, or any Collateral without the prior written consent of the
Administrative Agent. For purposes of this SECTION 9.10(c), "Restricted
Action" means (i) exercising the right of set off, (ii) exercising a
banker's lien, (iii) foreclosing on or selling any Collateral, (iv)
initiating any legal action, or (v) exercising any similar right or remedy.
For purposes of this SECTION 9.10(c), "Covered Jurisdiction" means the
State of California and any other jurisdiction in which the exercise of a
Restricted Action may (a) result in loss of deficiency rights, (b) be
deemed an "action" for purposes of any "one form of action" law, (c) be
subject to any "security first" law, or (d) otherwise result in limitations
on, losses of, or other adverse effects on the rights of the Administrative
Agent or any Lender."
4. CONDITIONS TO EFFECTIVENESS. The effectiveness of this Third
Amendment is subject to the conditions that the Administrative Agent shall
have received all of the following, in form and substance satisfactory to the
Administrative Agent and its counsel:
(a) Third Amendment. This Third Amendment duly executed by the
parties hereto.
(b) (i) Resolutions; incumbency. Copies of the resolutions of the
board of directors of the Company approving and authorizing the execution,
delivery and performance by the Company of this Agreement, (ii) a certificate
of the Secretary or Assistant Secretary of the Company certifying the names
and true signatures of the officers authorized to execute and deliver this
Third Amendment.
(c) (i) Resolutions; incumbency. Copies of the resolutions of the
board of directors of each of the Subsidiary Guarantors executing the Consent
of Guarantors at the end of this Third Amendment approving and authorizing
the execution, delivery and performance by such Subsidiary Guarantors of such
Consent of Guarantors and (ii) a certificate of the Secretary or Assistant
Secretary of such Subsidiary Guarantor certifying the names and true
signatures of the officers authorized to execute and deliver such Consent of
Guarantors.
(d) Legal Opinions. Written legal opinion of counsel to the Company
and each of the Subsidiary Guarantors.
(e) Certificate. A certificate signed by a Responsible Officer:
(i) stating that the representations and warranties of the
Company and the Subsidiary Guarantors contained in the Agreement, this
Third Amendment and each of the other Loan Documents are true and correct;
11
(ii) stating that no Default or Event of Default exists after
giving effect to this Third Amendment.
(f) Fees. (i) An amendment fee equal to .50% of the Credit Exposure
for the account of the Lenders executing this Third Amendment not later than
the Effective Date according to their Pro Rata Shares thereof; (ii) all fees
and expenses payable to the Administrative Agent and the Lenders as provided
in Section 10.04 of the Agreement and as otherwise agreed by the Company, and
(iii) payment or agreement to pay a restructuring fee to the Agent.
5. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants to
the Lenders, the Issuing Lender(s) and the Agents as of the Effective Date,
that:
5.01 AUTHORIZATION BY COMPANY. The execution, delivery and
performance of this Third Amendment by the Company have been duly authorized
by all necessary corporate action by the Company, and this Third Amendment
has been duly executed and delivered by the Company.
5.02 AUTHORIZATION BY SUBSIDIARY GUARANTORS. The execution,
delivery and performance of the Consent of Guarantors at the end of this
Third Amendment by the Subsidiary Guarantors have been duly authorized by all
necessary corporate action by each such Subsidiary Guarantor, and such
Consent of Guarantors has been duly executed and delivered by each such
Subsidiary Guarantor.
5.03 BINDING OBLIGATION OF COMPANY. This Third Amendment is a
legal, valid and binding agreement of the Company, enforceable in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting creditors' rights generally and to
general principles of equity.
5.04 BINDING OBLIGATION OF SUBSIDIARY GUARANTORS. The Consent
of Guarantors at the end of this Third Amendment is a legal, valid and
binding obligation of each Subsidiary Guarantor, enforceable in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting creditors' rights generally and to
general principles of equity.
5.05 INCORPORATION OF CERTAIN REPRESENTATIONS. The
representations and warranties set forth in Article V of the Agreement are
true and correct on and as of the Effective Date with the same effect as if
made on and as of the Effective Date.
5.05 DEFAULT. No Default or Event of Default under the Agreement
has occurred and is continuing after giving effect to this Third Amendment.
6. MISCELLANEOUS.
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6.01 WAIVERS. This Third Amendment is specific in time and in
intent and does not constitute, nor except as specifically set forth herein,
should it be construed as, a waiver of any other right, power or privilege
under the Agreement, or under any agreement, contract, indenture, document or
instrument mentioned in the Agreement; nor does it preclude any exercise
thereof or the exercise of any other right, power or privilege, nor shall any
future waiver of any right, power, privilege or default hereunder, or under
the Agreement or any agreement, contract, indenture, document or instrument
mentioned in the Agreement, constitute a waiver of any other default of the
same or of any other term or provision.
6.02 EFFECTIVENESS OF AGREEMENT. Except as hereby amended, the
Agreement shall remain in full force and effect.
6.03 COUNTERPARTS. This Third Amendment may be executed in any
number of counterparts and all of such counterparts taken together shall be
deemed to constitute one and the same instrument. This Third Amendment shall
become effective on the Effective Date upon the Company, the Majority
Lenders, the Required Class Lenders, and the Agents signing a copy hereof,
and the Guarantors consenting hereto, whether the same or counterparts, and
delivering the same to the Administrative Agent.
6.04 JURISDICTION. THIS THIRD AMENDMENT, AND ANY INSTRUMENT OR
AGREEMENT REQUIRED HEREUNDER, SHALL BE GOVERNED BY AND CONSTRUED UNDER THE LAWS
OF THE STATE OF NEW YORK
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IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
UNITED ARTISTS THEATRE COMPANY
By /s/ Kurt C. Hall
----------------------------------
Kurt C. Hall
President and
Chief Executive Officer
BANK OF AMERICA, N.A., AS ADMINISTRATIVE
AGENT
By /s/ David Price
----------------------------------
David Price
Vice President
BANK OF AMERICA N.A., AS A LENDER AND
ISSUING LENDER
By: /s/ Clara Y. Strand
----------------------------------
Name: Clara Yang Strand
--------------------------------
Title: Managing Director
--------------------------------
BANKBOSTON, N.A., AS DOCUMENTATION AGENT,
A LENDER AND ISSUING LENDER
By: /s/ Matthew E. Murphy
----------------------------------
Name: Matthew E. Murphy
--------------------------------
Title: Director
--------------------------------
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MERRILL LYNCH CAPITAL CORPORATION, AS A
CO-SYNDICATION AGENT AND A LENDER
By: /s/ Jamie Hallowell
----------------------------------
Name: Jamie Hallowell
--------------------------------
Title: Vice President
--------------------------------
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MORGAN STANLEY SENIOR
FUNDING, INC., AS A CO-SYNDICATION AGENT
AND A LENDER
By: /s/ Christopher A. Pucillo
----------------------------------
Name: Christopher A. Pucillo
--------------------------------
Title: Vice President
--------------------------------
16
PNC BANK, N.A. AS CO-AGENT AND A LENDER
By: /s/ Robert D. Mace
----------------------------------
Name: Robert D. Mace
--------------------------------
Title: Vice President
--------------------------------
17
By:
----------------------------------
Name:
--------------------------------
Title:
--------------------------------
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CONSENT OF GUARANTORS
Each of the undersigned Subsidiary Guarantors hereby (1) acknowledges
that it has reviewed and consented to the foregoing Third Amendment, (2)
represents and warrants to the Administrative Agent, the other Agents, the
Issuing Lenders and the Lenders that (i) there is no defense, counterclaim
or offset of any type or nature under its Subsidiary Guaranty (as such term
and other capitalized but otherwise undefined terms used in this Consent are
defined in the Agreement as amended by the Third Amendment) to which it is a
party and that (ii) its Subsidiary Guaranty remains in full force and effect
after giving effect to the Third Amendment, and (3) reaffirms, in all
respects, its Subsidiary Guaranty and the Collateral Documents to which it is
a party.
Each of the undersigned Subsidiary Guarantors hereby further
acknowledges and agrees, and the Subsidiary Guaranty is hereby amended to
provide that, in the event that all or any part of the Guarantied Obligations
(as defined in the Subsidiary Guaranty) at any time are secured, directly or
indirectly, by any one or more deeds of trust or mortgages creating or
granting Liens on any interests in real property (1) upon the occurrence of
and during the continuance of any Event of Default, at the sole option of the
Administrative Agent, without notice or demand and without affecting any
Guarantied Obligations, the enforceability of the Subsidiary Guaranty, or the
validity or enforceability of any Liens of the Administrative Agent on any
Collateral, the Administrative Agent may foreclose any or all of such deeds
of trust or mortgages by judicial or non-judicial sale; (2) the Subsidiary
Guaranty will at all times remain in full force and effect as to such
Subsidiary Guarantor notwithstanding that, if the Administrative Agent
forecloses, either by judicial foreclosure or by exercise of power of sale,
any deed of trust, directly or indirectly, securing Guarantied Obligations,
that foreclosure could impair or destroy any ability that such Subsidiary
Guarantor may have to seek reimbursement, contribution or indemnification
from any other Subsidiary Guarantor or others based on any right such
Subsidiary Guarantor may have of subrogation, reimbursement, contribution or
indemnification for any amounts paid by such Subsidiary Guarantor under the
Subsidiary Guaranty; (3) in the absence of this provision, such potential
impairment or destruction of such Subsidiary Guarantor's rights, if any, may
entitle such Subsidiary Guarantor to assert a defense to the Subsidiary
Guarantor based on Section 580d of the California Code of Civil Procedure as
interpreted in UNION BANK V. GRADSKY, 265 Cal. App. 2d. 40 (1968), (3) such
Subsidiary Guarantor freely, irrevocably and unconditionally (i) waives and
relinquishes that defense and agrees that such Subsidiary Guarantor will be
fully liable under the Subsidiary Guaranty even through the Administrative
Agent may foreclose, either by judicial foreclosure or by exercise of power
of sale, any deed of trust securing the Guarantied Obligations; (ii) agrees
that such Subsidiary Guarantor will not assert that defense in any action or
proceeding which the Administrative Agent may commence to enforce the
Subsidiary Guaranty; (iii) acknowledges and agrees that the rights and
defenses waived by such Subsidiary Guarantor under the Subsidiary Guaranty
include any right or defense that such Subsidiary Guarantor may have or be
entitled to assert based upon or arising out of any one or more of Sections
580a, 580b, 580d or 726 of the California Code of Civil Procedure or Section
2848 of the California Civil Code or comparable provisions of the laws of any
other jurisdiction, and all other suretyship defenses it
19
otherwise might or would have under California law or other applicable law;
(iv) acknowledges and agrees that the Administrative Agent, the Agents and
the Lenders are relying on this waiver, and that this waiver is a material
part of the consideration which they are receiving for creating the
Guarantied Obligations; and (v) waives any right to receive notice of any
judicial or nonjudicial foreclosure or sale of any real property or interest
therein subject to any such deeds of trust or mortgages and such Subsidiary
Guarantor's failure to receive any such notice shall not impair or affect
such Subsidiary Guarantor's obligations hereunder or the enforceability of
the Subsidiary Guaranty or any Liens created or granted thereby.
Dated: September 27, 1999
UNITED ARTISTS THEATRE CIRCUIT, INC.
UNITED ARTISTS REALTY COMPANY
UNITED ARTISTS PROPERTIES I CORP.
UNITED ARTISTS PROPERTIES II CORP.
UNITED ARTISTS SMITHTOWN PROPERTIES, INC.
By: /s/ Kurt C. Hall
----------------------------------
Kurt C. Hall
President and
Chief Executive Officer
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SCHEDULE 1.01(a)
APPLICABLE AMOUNTS
(REVOLVING COMMITMENT, REVOLVING LOANS, TRANCHE A TERM LOANS, TRANCHE B TERM
LOANS, AND TRANCHE C TERM LOANS)
(expressed in basis points)
LETTERS OF
CREDIT
TOTAL LEVERAGE EURODOLLAR BASE RATE COMMITMENT
RATIO (x)(1) RATE LOANS LOANS FEE
------------------------------------------------------------------------------------
6.00 LESS THAN OR EQUAL TO x 425.00 325.00 62.50
x LESS THAN 6.00 375.00 275.00 62.50
(1) Calculated excluding issued and outstanding letters of credit.
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