<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report September 29, 1999
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United Artists Theatre Circuit, Inc.
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(Exact name of registrant as specified in its charter)
Maryland 333-1024 13-1424080
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(State of other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
9110 E. Nichols Avenue, Suite 200, Englewood, CO 80112
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(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code (303) 792-3600
-----------------------------
No change
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS
Effective September 27, 1999, United Artists Theatre Company (the "Parent")
amended its credit agreement dated April 21, 1998. United Artists Theatre
Circuit, Inc. ("UATC") is a guarantor of the Credit Agreement.
A copy of the amendment is filed as an exhibit.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
Exhibits:
4. Third Amendment, dated as of September 27, 1999, to the Credit
Agreement dated as of April 21, 1998.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
UNITED ARTISTS THEATRE CIRCUIT, INC.
(Registrant)
Date: September 29, 1999 /S/Trent J. Carman
------------------ ------------------
By: Trent J. Carman
Chief Financial Officer
<PAGE>
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
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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
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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
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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
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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
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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
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"(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:
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"(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:
<TABLE>
<CAPTION>
For the twelve month period ending on Not less than
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the last day of fiscal month:
-----------------------------
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<S> <C>
October, 1999 $67,000,000
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November, 1999 $69,000,000
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December, 1999 $73,000,000
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January, 2000 $74,000,000
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February, 2000 $79,000,000
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March, 2000 $83,000,000
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April, 2000 $84,000,000
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May, 2000 $84,000,000
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June, 2000 $84,000,000
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July, 2000 $85,000,000
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August, 2000 $85,000,000
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September, 2000 $85,000,000
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October, 2000 $85,000,000
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November, 2000 $85,000,000
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December, 2000 $97,000,000
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</TABLE>
"(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.
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"(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:
<TABLE>
<CAPTION>
SENIOR TOTAL LEVERAGE
PERIOD LEVERAGE RATIO RATIO
- -------------------------------------------------------------------------------
<S> <C> <C>
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
</TABLE>
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"(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:
<TABLE>
<CAPTION>
PERIOD MINIMUM RATIO
- -------------------------------------------------------------------------------
<S> <C>
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
</TABLE>
"(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:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Four Fiscal Quarters Ending On: Operating Cash Flow
------------------------------- -------------------
- -------------------------------------------------------------------------------
<S> <C>
September 30, 1999 $70,000,000
- -------------------------------------------------------------------------------
December 30, 1999 $73,000,000
- -------------------------------------------------------------------------------
March 30, 2000 $83,000,000
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June 29, 2000 $84,000,000
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September 28, 2000 $85,000,000
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December 28, 2000 $97,000,000
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</TABLE>
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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;
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(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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<PAGE>
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
------------------------------------
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PNC BANK, N.A. AS CO-AGENT AND A LENDER
By: /s/ Robert D. Mace
--------------------------------------
Name: Robert D. Mace
-----------------------------------
Title: Vice President
-----------------------------------
17
<PAGE>
By:
--------------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
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<PAGE>
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
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<PAGE>
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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<PAGE>
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)
<TABLE>
<CAPTION>
LETTERS OF CREDIT
TOTAL LEVERAGE EURODOLLAR BASE RATE COMMITMENT
RATIO (x)(1) RATE LOANS LOANS FEE
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
6.00 < = x 425.00 325.00 62.50
x < 6.00 375.00 275.00 62.50
</TABLE>
(1) Calculated excluding issued and outstanding letters of credit.
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