-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, D1KjozWU3M1dvBdWmLQZ00lpJic5j1AJeJdDsr4QUZAxST65YamX3rausqdn+4nD uoNuBNnec4nKNdxIzixMDg== 0000950144-00-006447.txt : 20000515 0000950144-00-006447.hdr.sgml : 20000515 ACCESSION NUMBER: 0000950144-00-006447 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000512 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CARMIKE CINEMAS INC CENTRAL INDEX KEY: 0000799088 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MOTION PICTURE THEATERS [7830] IRS NUMBER: 581469127 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-11604 FILM NUMBER: 628020 BUSINESS ADDRESS: STREET 1: 1301 FIRST AVE CITY: COLUMBUS STATE: GA ZIP: 31901 BUSINESS PHONE: 7065763400 MAIL ADDRESS: STREET 1: P O BOX 391 CITY: COLUMBUS STATE: GA ZIP: 31994 10-Q 1 CARMIKE CINEMAS, INC. 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the quarterly period ended MARCH 31, 2000 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to _________ Commission file number 0-11604 ------- CARMIKE CINEMAS, INC. (Exact name of registrant as specified in its charter) DELAWARE 58-1469127 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1301 FIRST AVENUE, COLUMBUS, GEORGIA 31901-2109 (Address of Principal Executive Offices) (Zip Code) (706) 576-3400 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class A Common Stock, $.03 par value -- 9,968,287 shares outstanding as of May 1, 2000 Class B Common Stock, $.03 par value -- l,420,700 shares outstanding as of May 1, 2000 2 PART I ITEM 1. FINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEETS CARMIKE CINEMAS, INC. AND SUBSIDIARIES (IN THOUSANDS, EXCEPT FOR SHARE DATA)
MARCH 31, DECEMBER 31, 2000 1999 -------------- -------------- ASSETS CURRENT ASSETS Cash and cash equivalents $ 6,576 $ 6,509 Short-term investments 9,948 1,175 Accounts and notes receivable 2,296 2,638 Inventories 4,771 4,240 Recoverable construction allowances -- Note 4 19,988 15,259 Recoverable income taxes 6,747 5,775 Prepaid expenses 15,535 10,257 ---------- ---------- TOTAL CURRENT ASSETS 65,861 45,853 OTHER ASSETS Investments in and advances to partnerships 13,599 14,270 Deferred income taxes 23,728 21,038 Other 10,494 10,542 ---------- ---------- 47,821 45,850 PROPERTY AND EQUIPMENT -- Note 3 Land 66,828 71,239 Buildings and improvements 223,554 247,283 Leasehold improvements 271,001 262,310 Leasehold interests 18,017 18,185 Equipment 244,495 250,323 ---------- ---------- 823,895 849,340 Accumulated depreciation and amortization (170,871) (183,100) ---------- ---------- 653,024 666,240 EXCESS OF PURCHASE PRICE OVER NET ASSETS OF BUSINESSES ACQUIRED 49,117 49,551 ---------- ---------- $ 815,823 $ 807,494 ========== ==========
See accompanying notes 2 3
MARCH 31, DECEMBER 31, 2000 1999 -------------- -------------- LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 56,000 $ 55,967 Accrued expenses 41,398 45,971 Current maturities of long-term indebtedness and capital lease obligations 5,332 4,008 ---------- ---------- TOTAL CURRENT LIABILITIES 102,730 105,946 LONG-TERM LIABILITIES Long-term debt, less current maturities -- Note 2 234,740 213,688 Senior Subordinated Notes 200,000 200,000 Capital lease obligations, less current maturities 52,372 52,639 Restructuring reserve, less current portion 23,780 24,615 Other 5,519 6,409 ---------- ---------- 516,411 497,351 ---------- ---------- SHAREHOLDERS' EQUITY 5.5% Series A Senior Cumulative Convertible Exchangeable Preferred Stock, $1.00 par value, authorized 1,000,000 shares, issued and outstanding 550,000 shares; involuntary liquidation value of $55,000,000 550 550 Class A Common Stock, $.03 par value, one vote per share, authorized 22,500,000 shares, issued and outstanding 9,968,287 shares 299 299 Class B Common Stock, $.03 par value, ten votes per share, authorized 5,000,000 shares, issued and outstanding 1,420,700 shares 43 43 Treasury Stock, at cost, 44,800 shares (441) (441) Paid-in capital 158,772 158,772 Retained earnings 37,459 44,974 ---------- ---------- 196,682 204,197 ---------- ---------- $ 815,823 $ 807,494 ========== ==========
See accompanying notes 3 4 CONSOLIDATED STATEMENTS OF OPERATIONS CARMIKE CINEMAS, INC. AND SUBSIDIARIES (IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED MARCH 31, 2000 1999 ---------- ---------- Revenues: Admissions $ 68,556 $ 67,022 Concessions and other 32,979 30,694 ---------- ---------- 101,535 97,716 Costs and expenses: Film exhibition costs 36,280 35,218 Concession costs 3,980 3,719 Other theatre operating costs 49,626 43,883 General and administrative expenses 1,685 1,865 Depreciation and amortization expenses 11,054 9,506 ---------- ---------- 102,625 94,191 ---------- ---------- OPERATING INCOME (LOSS) (1,090) 3,525 Interest expense (10,788) (7,306) ---------- ---------- LOSS BEFORE INCOME TAXES (11,878) (3,781) Income tax benefit (4,514) (1,437) ---------- ---------- Net loss before extraordinary item (7,364) (2,344) Extraordinary item (net of income taxes) -- Note 5 -0- (6,291) ---------- ---------- NET LOSS (7,364) (8,635) Preferred stock dividends (756) (756) ---------- ---------- NET LOSS AVAILABLE FOR COMMON STOCK $ (8,120) $ (9,391) ========== ========== Weighted average shares outstanding: Basic and diluted 11,344 11,363 ========== ========== Loss per common share before extraordinary item: Basic and diluted $ (.72) $ (.27) ========== ========== Loss per common share: Basic and diluted $ (.72) $ (.83) ========== ==========
See accompanying notes 4 5 CONSOLIDATED STATEMENTS OF CASH FLOWS CARMIKE CINEMAS, INC. AND SUBSIDIARIES (IN THOUSANDS)
THREE MONTHS ENDED MARCH 31, 2000 1999 ---------- ---------- OPERATING ACTIVITIES Net loss $ (7,364) $ (8,635) Items which did not provide (use) cash: Depreciation and amortization 11,054 9,506 Deferred income taxes (2,690) (5,293) Recoverable income taxes (972) -0- Gain on sales of property and equipment (546) -0- Changes in other assets and liabilities (1,006) (838) Changes in operating assets and liabilities: Accounts and notes receivable and inventories (189) (3,798) Prepaid expenses (5,278) (2,684) Accounts payable 33 5,825 Accrued expenses (4,573) (4,981) ---------- ---------- NET CASH USED IN OPERATING ACTIVITIES (11,531) (10,898) INVESTING ACTIVITIES Purchases of property and equipment (19,709) (52,100) Proceeds from sales of property and equipment 546 -0- Proceeds from sale/leaseback transaction 23,283 -0- Decrease (increase) in: Short-term investments (8,773) (21) Other (373) 1,045 ---------- ---------- NET CASH USED IN INVESTING ACTIVITIES (5,026) (51,076) FINANCING ACTIVITIES Debt: Additional borrowings, net of debt issuance costs 149,500 361,540 Repayments (including prepayment penalties) (127,391) (314,460) Preferred Stock dividends (756) -0- Recoverable construction allowances (4,729) -0- ---------- ---------- NET CASH PROVIDED BY FINANCING ACTIVITIES 16,624 47,080 ---------- ---------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 67 (14,894) Cash and cash equivalents at beginning of period 6,509 17,771 ---------- ---------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 6,576 $ 2,877 ========== ==========
See accompanying notes 5 6 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CARMIKE CINEMAS, INC. AND SUBSIDIARIES MARCH 31, 2000 NOTE 1 - BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements of Carmike Cinemas, Inc. ("Carmike" or the "Company") have been prepared in accordance with generally accepted accounting principles for interim financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month period ended March 31, 2000 are not necessarily indicative of the results that may be expected for the year ending December 31, 2000. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 1999. RECLASSIFICATIONS: Certain 1999 amounts in the accompanying consolidated financial statements have been reclassified to conform to the current year's presentation. NOTE 2 - INDEBTEDNESS Long-term debt and senior notes consists of the following (in thousands):
March 31, December 31, 2000 1999 -------------- -------------- Revolving credit facility $ 162,800 $ 140,000 Senior Subordinated Notes 200,000 200,000 Term Loan B 74,250 74,625 Industrial Revenue Bonds; payable in equal installments through May 2006, with interest rates ranging from 3.90% to 5.98% 1,963 2,034 ---------- ---------- 439,013 416,659 Less current maturities (4,273) (2,971) Less Subordinated Notes (200,000) (200,000) ---------- ---------- $ 234,740 $ 213,688 ========== ==========
Effective March 31, 2000, the Company amended its 1999 Credit Agreement, Term Loan B and a lease facility to, among other things, adjust certain financial ratios relative to past and future operating performance. The amendment also increases the variable interest rate for the 1999 Credit Agreement and the Term Loan B by 0.5% (effective rate at March 31, 2000 of 9.13%, LIBOR plus 3.25% for the 1999 Credit Agreement and 9.45%, LIBOR plus 3.5% for the Term 6 7 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED CARMIKE CINEMAS, INC. AND SUBSIDIARIES NOTE 2 - INDEBTEDNESS (CONTINUED) Loan B). Additionally, the Company agreed to secure these facilities with mortgages on its owned theatres and leasehold mortgages on certain of its leased theatres by November 1, 2000. If the Company cannot secure mortgages for theatres with minimum levels of theatre cash flows, as defined, interest rates will increase by an amount ranging from 25 basis points to 100 basis points. Such an increase in interest rates would be retroactive to March 31, 2000. The 1999 Credit Agreement provides for revolving credit availability of $200 million and matures November 10, 2002. At March 31, 2000, the Company had $37.2 million available for borrowings under this facility. The Company pays a commitment fee of 0.5% on the unused portion of the facility. All amounts outstanding at March 31, 2000 under the 1999 Credit Agreement have been classified as long-term in the accompanying Consolidated Balance Sheets because the Company intends that at least that amount would remain outstanding at all times during the next twelve months. The 1999 Credit Agreement and the Term Loan B both contain certain restrictive provisions which, among other things, limit additional indebtedness of the Company, limit dividend and other restricted payments, require that certain debt to capitalization ratios be maintained and require minimum levels of cash flows. The Subordinated Notes are general unsecured obligations of the Company and are subordinate to existing indebtedness and substantially all future borrowings. Certain of the Company's subsidiaries have unconditionally guaranteed this debt. The Subordinated Notes mature on February 1, 2009 and bear interest at the rate of 9 3/8% which is payable semi-annually in arrears on February 1 and August 1 of each year. Prior to February 1, 2007, the Company may redeem certain of the outstanding notes subject to certain defined limitations and subject to prepayment penalties. The Subordinated Notes contain certain restrictive provisions which, among other things, limit dividends and other restricted payments. NOTE 3 - SALE/LEASEBACK TRANSACTIONS During the period ended March 31, 2000, the Company sold three theatres, with a net book value of $22.6 million, for $23.3 million. The theatres were leased back from the purchaser under a 20 year operating lease agreement. The Company has a letter of intent to sell for $22.6 million, an additional three theatres, with a net book value of $19.6 million, under a separate sale/leaseback arrangement with similar terms. This transaction is expected to close during the second quarter of 2000. Gains realized from sale/leaseback transactions are recognized over the life of the leases. The leases contain renewal options and generally provide that the Company will pay property taxes, common area maintenance, insurance and repairs. The net proceeds from these transactions will be used to reduce outstanding bank indebtedness and for operations. 7 8 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED CARMIKE CINEMAS, INC. AND SUBSIDIARIES NOTE 4 - RECOVERABLE CONSTRUCTION ALLOWANCES The Company, under contractual agreements with certain lessors, is entitled to reimbursement of certain theatre construction related costs. Collection of these amounts, $20 million at March 31, 2000, are based on the occurrence of certain defined events. The Company anticipates that all amounts outstanding will be collected by the end of the third quarter of 2000. NOTE 5 - EXTRAORDINARY CHARGE During the period ended March 31, 1999, the Company retired its then outstanding senior notes totaling $79.9 million. The Company recognized an extraordinary charge of $6.3 million ($10.1 million less applicable income taxes) for (a) a prepayment premium ($9.2 million) paid in connection with the redemption of the senior notes, and (b) the elimination of deferred debt costs ($.9 million) on retired indebtedness. NOTE 6 - EARNINGS PER SHARE
Three Months Ended March 31, 2000 1999 ---------- ---------- Weighted average shares outstanding: Basic 11,344 11,363 Effect of dilutive securities - employee stock options -0- -0- ---------- ---------- Diluted 11,344 11,363 ========== ========== Earnings (loss) per common share before extraordinary item: Basic and diluted $ (.72) $ (.27) ========== ========== Earnings (loss) per common share: Basic and diluted $ (.72) $ (.83) ========== ==========
8 9 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED CARMIKE CINEMAS, INC. AND SUBSIDIARIES NOTE 7 - CONDENSED COMBINED FINANCIAL DATA FOR GUARANTOR SUBSIDIARIES The Company's principal operating subsidiaries fully, unconditionally, jointly and severally guarantee the Company's $200 million 9 3/8% Senior Subordinated Notes (see Note 2 - Indebtedness). The guarantor subsidiaries are direct, wholly owned U.S. subsidiaries of the Company. The Company and the guarantor subsidiaries conduct substantially all of the operations of the Company and its subsidiaries on a consolidated basis. Separate financial statements of the guarantor subsidiaries are not presented because, in the opinion of management, such financial statements are not material to investors. The Company also has a partially owned subsidiary and several unconsolidated affiliates which are not guarantors and are inconsequential to the Company on a consolidated basis. Following is summarized condensed combined financial information (in accordance with Rule 1-02(bb) of Regulation S-X) for the guarantor subsidiaries of the Company (in thousands):
March 31, 2000 ---------- Current assets $ 19,126 Current liabilities 18,858 Noncurrent assets 556,707 Noncurrent liabilities 374,316
Three Months Ended March 31, 2000 1999 ---------- ---------- Revenues $ 81,926 $ 76,550 Operating loss (6,086) (2,004) Net loss (8,188) (4,575)
9 10 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS This Report includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), including, in particular, forward-looking statements under the headings "Item 1. Financial Statements" and "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations." The words "expect," "anticipate," "intend," "plan," "believe," "seek," "estimate," and similar expressions are intended to identify such forward-looking statements; however, this Report also contains other forward-looking statements in addition to historical information. Carmike cautions that there are various important factors that could cause actual results to differ materially from those indicated in the forward-looking statements; accordingly, there can be no assurance that such indicated results will be realized. Factors which could cause Carmike's actual results in future periods to differ materially include availability of suitable motion pictures for exhibition in Carmike's markets, competitive pressures, business conditions in the movie industry and other competitive markets, and the other factors detailed from time to time in Carmike's filings with the Securities and Exchange Commission, including Carmike's Annual Report on Form 10-K for the year ended December 31, 1999. By making these forward-looking statements, Carmike does not undertake to update them in any manner except as may be required by its disclosure obligations in filings it makes with the Securities and Exchange Commission (the "Commission") under the Federal securities laws. In this Report, the words "Company," "Carmike," "we," "our," "ours," and "us" refer to Carmike Cinemas, Inc. and its subsidiaries. COMPARISON OF THREE MONTHS ENDED MARCH 31, 2000 AND MARCH 31, 1999 RESULTS OF OPERATIONS Total revenues for the quarter ended March 31, 2000 increased 3.9% to $101.5 million from $97.7 million for the quarter ended March 31, 1999. This increase consists of a $1.5 million increase in admissions and a $2.3 million increase in concessions and other. For the quarter ended March 31, 2000, the Company's average admission price was $4.43, its average concession sale per patron was $1.92 and the attendance per average screen was 5,465 compared to 5,907 for the quarter ended March 31, 1999. The decrease in attendance, partially offset by per patron increases in admissions and concessions, resulted in a decrease of revenue per average screen of 0.9% to $35,815. For the quarter ended March 31, 1999, the Company's average admission price was $4.20, its average concession sale per patron was $1.70 and the revenue per average screen was $36,151. 10 11 Costs of operations (film exhibition costs, concession costs and other theatre operating costs) increased 8.6% from $82.8 million for the quarter ended March 31, 1999 to $89.9 million for the quarter ended March 31, 2000. Film exhibition costs stayed relatively flat as a percentage of expense to total admissions revenue. Concessions costs were $4.0 million for the quarter ended March 31, 2000, compared to $3.7 million for the quarter ended March 31, 1999. Other theatre costs for the quarter ended March 31, 2000 increased 13.0% to $49.6 million from $43.9 million for the same period in 1999. This increase was the result of a 14.5% increase in occupancy costs and individually immaterial increases in salaries, supplies and utilities. As a percentage of total revenues, cost of operations increased to 88.5% of total revenues in the quarter ended March 31, 2000 from 84.8% for the quarter ended March 31, 1999, largely due to the amount of fixed costs which do not fluctuate with changes in revenues or attendance. Depreciation and amortization increased 16.8% from $9.5 million for the quarter ended March 31, 1999 to $11.1 million for the quarter ended March 31, 2000. This increase is the result of the Company's 1999 theatre expansion, partially offset by the reduced depreciation expense from the reduction in asset values as a result of the impairment charge recognized during the fourth quarter of 1999. Interest expense for the quarter ended March 31, 2000 increased 47.9% to $10.8 million from $7.3 million for the quarter ended March 31, 1999. This increase is due to higher levels of average indebtedness outstanding and to a higher aggregate interest cost due to increases in the Company's effective borrowing rates. During the period ended March 31, 1999, the Company recognized an extraordinary charge of $10.1 million ($6.3 million net of income tax benefit, or $.55 per diluted share) for the prepayment premiums paid in connection with the redemption of senior notes and the elimination of certain deferred debt costs related to indebtedness which was retired in February 1999. LIQUIDITY AND CAPITAL RESOURCES The Company's revenues are collected in cash and credit cards, principally through admissions and theatre concessions. Because its revenues are received in cash prior to the payment of related expenses, the Company has an operating "float" which partially finances its operations. The Company had working capital deficits of $36.9 million and $60.1 million at March 31, 2000 and December 31, 1999, respectively. These deficits are financed through the operating "float" and through borrowing availability under the Company's $200 million revolving credit facility (the "Revolving Credit Facility"). At March 31, 2000, the Company had approximately $16.5 million in cash and short-term investments on hand and approximately $37.2 million was available for borrowings under the Company's Revolving Credit Facility. The Company's credit and leasing facilities contain certain restrictive provisions which, among other things, limit additional indebtedness of the Company, limit the payment of dividends and other defined restricted payments, require that certain debt to capitalization ratios be maintained and require minimum levels of defined cash flows. Effective March 31, 2000, Carmike amended each of the Revolving Credit Facility, its $75 million term loan ("Term Loan B") and a master lease facility with Movieplex Reality Leasing, L.L.C. (the "Master Lease") to, among other 11 12 things, adjust certain financial ratios relative to past and future operating performance and to add a new covenant as to the ratio of Carmike's funded debt plus rental expense to Carmike's cash flow plus rental expense. In connection with these amendments, the interest rates under the Revolving Credit Facility and Term Loan B were increased, the base rent payable under the Master Lease was increased and Carmike is required to permanently prepay the loans under the Revolving Credit Facility and the Term Loan B in an amount equal to 75% of annual excess cash flow, as defined. In addition, the amendments reduced the amount of investments Carmike can make to $10 million in the aggregate and limited Carmike's net capital expenditures to $25 million in 2000 and $35 million in 2001 and 2002. In order to obtain these amendments, Carmike agreed to secure the Revolving Credit Facility, Term Loan B and the Master Lease with mortgages on its owned theatres and leasehold mortgages on certain of its leased theatres, to the extent it can obtain the landlord's consent to such a leasehold mortgage. If, prior to November 1, 2000, Carmike is unable to provide the lenders with mortgages from theatres representing at least $60 million of Carmike's 1999 theatre-level cash flow ("1999 Theatre Level Cash Flow"), the interest rate payable on the Revolving Credit Facility and Term Loan B will increase and the base rent under the Master Lease will increase, by an amount ranging from 25 basis points to 100 basis points, depending upon the amount of 1999 Theatre Level Cash Flow from the theatres on which mortgages have been granted. Such increase in interest rate and in the base rent under the Master Lease would be retroactive to March 31, 2000. The Company's capital expenditures arise principally in connection with the development of new theatres, renovation and expansion of existing theatres and theatre acquisitions. During the first three months of 2000, such capital expenditures totaled $19.7 million. The Company estimates that total capital expenditures for 2000 will be approximately $25 million. Carmike estimates that the average cost of a new 16-screen multiplex will be approximately $9 million ($4 million if the land and improvements are leased rather than owned). Carmike intends to enter into leasing arrangements whenever possible in order to minimize capital requirements. Carmike believes that its currently anticipated capital needs for theatre construction, expansion and renovation and possible acquisitions for at least the next year will be satisfied by the cash and cash equivalents and short-term investments on hand, borrowings under the Revolving Credit Facility, additional sale of debt and/or equity securities, additional bank financings and other forms of long-term debt and internally generated cash flow. Additionally, Carmike plans to supplement its current sources of capital through sales and leasebacks of theatre properties where market conditions for such transactions are favorable, including one transaction consummated during the first quarter of 2000 for an aggregate of three theatres with net proceeds of approximately $23.3 million and another transaction expected to close during the second quarter of 2000 for an aggregate of three theatres with net proceeds of approximately $22.6 million. The proceeds will be used to reduce amounts outstanding under the Revolving Credit Facility and Term Loan B and for operations. Cash used in operating activities was $11.5 million for the three months ended March 31, 2000, compared to cash used in operating activities of $10.9 million for the three months ended March 31, 1999. The decrease in cash flow from operating activities was primarily due to an increase in prepaid expenses and a reduction in accrued expenses. Net cash used in investing activities was 12 13 $5.0 million for the three months ended March 31, 2000 as compared to $51.1 million in the prior year period. This decrease in cash used in investing activities was primarily due to the decreased level of capital expenditures and receipt of proceeds from a sale and leaseback transaction. For the three month periods ended March 31, 2000 and 1999, cash provided by financing activities was $16.6 million and $47.1 million, respectively. The decrease was primarily due to reduced borrowings under its Revolving Credit Facility. Our ability to make scheduled payments of principal, to pay the interest on, or to refinance our indebtedness, or to fund planned capital expenditures for theatre construction, expansion, renovation or acquisition will depend on our future performance. Our future performance is, to a certain extent, subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. Based upon our current level of operations and anticipated increases in revenues and cash flow as a result of our theatre construction, expansion and renovation program, and the scheduled closing of certain underperforming theatres, we believe that cash flow from operations and available cash, together with available borrowings under the Revolving Credit Facility, lease financing arrangements and/or sales of additional debt or equity securities, will be adequate to meet our future liquidity needs for at least the next year. We cannot assure you, however, that our business will generate sufficient cash flow from operations, that currently anticipated revenue growth and operating improvements will be realized or that future capital will be available to us from the sale of debt or equity securities, additional bank financings, other long-term debt or lease financings in an amount sufficient to enable us to pay our indebtedness, or to fund our other liquidity needs. We may need to refinance all or a portion of our indebtedness on or before maturity. We cannot assure you that we will be able to refinance any of our indebtedness or raise additional capital through other means, on commercially reasonable terms or at all. IMPACT OF YEAR 2000 In prior years, we discussed the nature and progress of our plans to become Year 2000 compliant. In late 1999, Carmike completed its remediation and testing of systems. As a result of those planning and implementation efforts, we have experienced no significant disruptions in mission critical information technology and non-information technology systems and we believe those systems successfully responded to the Year 2000 date change. Expenses incurred to remediate our systems were not material. Carmike is not aware of any material problems resulting from Year 2000 issues, either with its products, its internal systems, or the products and services of third parties. Carmike will continue to monitor its mission critical computer applications and those of its suppliers and vendors throughout the year 2000 to ensure matters that may arise are addressed promptly. 13 14 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company's fixed interest rate risk for long-term debt is limited to the Company's $200 million 9 3/8% senior subordinated notes. As of April 1, 2000 the market value of these notes has decreased approximately 36% since their issuance in February 1999. Interest rates for the Company's floating rate debt increased when the Company amended its 1999 Credit Agreement and its Term Loan B during the quarter ended March 31, 2000 (See Note 2 of the Notes to Consolidated Financial Statements (Unaudited)). PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. (a) Listing of Exhibits
Exhibit Number Description ------- ----------- 10.1 First Amendment to Amended and Restated Credit Agreement dated as of March 31, 2000 among Carmike Cinemas, Inc., Wachovia Bank, N.A., as agent, and the Banks (as defined therein). 10.2 Second Amendment to Term Loan Credit Agreement dated as of March 31, 2000 among Carmike Cinemas, Inc., Wachovia Bank, N.A. and the Lenders ( as defined therein). 10.3 Second Amendment to Amended and Restated Master Lease dated as of March 31, 2000 between Movieplex Realty Leasing, L.L.C. and Carmike Cinemas, Inc. 27 Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K None 14 15 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. CARMIKE CINEMAS, INC. (Registrant) Date: May 11, 2000 By: /s/ Michael W. Patrick ---------------------------------------- Michael W. Patrick - President, Chief Executive Officer Date: May 11, 2000 By: /s/ Martin A. Durant ---------------------------------------- Martin A. Durant - Senior Vice President - Finance Treasurer and Chief Financial Officer 15 EX-10.1 2 FIRST AMENDMENT TO AMEND. AND RESTATED CREDIT AGR. 1 EXHIBIT 10.1 FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT THIS FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this "First Amendment") is dated as of March 31, 2000 among CARMIKE CINEMAS, INC. (the "Borrower"), WACHOVIA BANK, N.A., as Agent (the "Agent"), and the Banks parties hereto (collectively, the "Banks"); W I T N E S S E T H : WHEREAS, the Borrower, the Agent and the Banks executed and delivered that certain Amended and Restated Credit Agreement, dated as of January 29, 1999 (the "Credit Agreement"); WHEREAS, the Borrower has requested that the Agent and the Banks amend the Credit Agreement as set forth herein and the Agent and the Banks have agreed to such consent, subject to the terms and conditions hereof; NOW, THEREFORE, for and in consideration of the above premises and other good and valuable consideration, the receipt and sufficiency of which hereby is acknowledged by the parties hereto, the Borrower, the Agent and the Banks hereby covenant and agree as follows: 1. Definitions. Unless otherwise specifically defined herein, each term used herein which is defined in the Credit Agreement shall have the meaning assigned to such term in the Credit Agreement. Each reference to "hereof", "hereunder", "herein" and "hereby" and each other similar reference and each reference to "this Agreement" and each other similar reference contained in the Credit Agreement shall from and after the date hereof refer to the Credit Agreement as amended hereby. 2. Amendments to Section 1.01 of the Credit Agreement. Section 1.01 of the Credit Agreement hereby is amended by deleting the definitions of "Adjusted Cash Flow", "Adjusted Fixed Charges", "Collateral", "Collateral Documents", "Consolidated Cash Flow" and "Consolidated Net Income", and adding the following new definitions in appropriate alphabetical sequence: "Adjusted Cash Flow" means, for any period, Consolidated Operating Income for such period, plus, to the extent deducted in determining the amount thereof, (i) Rental Obligations (less any principal portion of any Off-Balance Sheet Lease), (ii) depreciation and amortization, and (iii) any aggregate net income during such period arising from the sale, exchange or other distribution of capital assets, provided that the total amount so included pursuant to this clause (iii) shall not exceed 5% of Consolidated Operating Income for such period, provided further, however, that, in calculating Adjusted Cash Flow for any such period, any acquisition or disposition of assets that shall have occurred during such period will be deemed to have occurred at the beginning of such period; and (iv) with respect to any Off-Balance Sheet Property which was acquired or ground-leased 2 by any entity acting in the capacity of landlord (or in any functionally similar capacity to a landlord) under any Off-Balance Sheet Lease within the 12-month period ending on the date of determination of Consolidated Cash Flow, Adjusted Cash Flow shall include Theatre-Level EBITDA for such Off-Balance Sheet Property and shall be determined with respect to such Off-Balance Sheet Property on the basis of actual Theatre-Level EBITDA within such period and projected Theatre-Level EBITDA for the remainder of such period (with such projections being based on the average Theatre-Level EBITDA of comparable theater properties of the Borrower which were operated during the entire 12-month period); provided, that in determining Adjusted Cash Flow, the expense incurred by the Borrower in complying with the provisions of Section 5.27 in granting and recording the Carmike Mortgages and obtaining the Real Estate Collateral Documentation shall be added back to Consolidated Operating Income. "Adjusted Consolidated Funded Debt" means at any time the sum (without duplication) of: (i) Consolidated Funded Debt; plus (ii) the product of (x) Rental Obligations (excluding Rental Obligations under the Lease) for the 4 Fiscal Quarter period just ended (and Rental Obligations under leases arising from sale/leaseback transactions of theatres shall be annualized on a proforma basis, as to any Operating Lease which has been in effect for less than 4 Fiscal Quarters), times (y)8. "Capital Expenditures" means for any period the sum of all capital expenditures incurred during such period by the Borrower and its Consolidated Subsidiaries, as determined in accordance with GAAP, but excluding any Capital Expenditures consisting of tenant improvement expenses which are reimbursed or reimbursable to the Borrower or a Consolidated Subsidiary by the landlord. "Carmike Mortgage Properties Cash Flow" means, with respect to each Fee Property subject to a Carmike Mortgage and each Leasehold Mortgage Property, the portion of Fee and Leasehold Properties Cash Flow derived therefrom. "Carmike Mortgage Properties Cash Flow Coverage" means Carmike Mortgage Properties Cash Flow, as of the date of measurement, as determined by reference to the Carmike Mortgage Properties Cash Flow Coverage Report. "Carmike Mortgage Properties Cash Flow Coverage Report" means a report or an updated report, in form and substance reasonably satisfactory to the Collateral Agent, to be provided to the Agent, the Collateral Agent and the Secured Parties pursuant to Section 5.27, reflecting the Carmike Mortgage Properties Cash Flow Coverage as of the date of such report or updated report. "Carmike Mortgage Properties Test Date" means November 1, 2000. "Carmike Mortgages" means, individually or collectively, as the context shall require, any mortgage, deed to secure debt, deed of trust or similar instrument appropriate for the relevant jurisdiction, in form and substance satisfactory to the Agent and the Collateral Agent pursuant to which the Borrower and EastWynn, respectively, grant a first priority, perfected Lien on all Fee Properties and all Leasehold Properties which 2 3 become Leasehold Mortgages pursuant to Section 5.27, to the Collateral Agent, for the ratable benefit of the Secured Parties, to secure the Secured Obligations (or a designated portion thereof), as contemplated in Section 5.27, as it may hereafter be amended or supplemented from time to time. "Collateral" means the property of the Borrower and EastWynn, respectively, in which the Collateral Agent, for the ratable benefit of the Secured Parties, is granted a security interest pursuant to the Security Agreement, the Pledge Agreement and the Carmike Mortgages, to secure the Secured Obligations, for the ratable benefit of the Secured Parties. "Collateral Documents" means the Intercreditor Agreement, the Pledge Agreement, the Security Agreement, the Carmike Mortgages, and such financing statements as the Collateral Agent may require to perfect its security interest in the Collateral. "Consolidated Cash Flow" means, for any period, the sum of Consolidated Operating Income of the Borrower, and its Subsidiaries, plus to the extent deducted in determining such Consolidated Operating Income (i) depreciation and amortization, and (ii) any aggregate net income during such period arising from the sale, exchange or other distribution of capital assets, provided, however, that the total amount so included pursuant to this clause (ii) shall not exceed 5% of Consolidated Operating Income for such period, provided further, however, that, in calculating Consolidated Cash Flow for any such period, any acquisition or disposition of assets that shall have occurred during such period will be deemed to have occurred at the beginning of such period; provided further, however, that (x) for purposes of determining the ratio of Consolidated Funded Debt to Consolidated Cash Flow and the ratio of Consolidated Senior Funded Debt to Consolidated Cash Flow, all Off-Balance Sheet Lease Payments made during the relevant period which has been deducted in computing Consolidated Net Income shall be added back in computing Consolidated Cash Flow, (y) with respect to any Off-Balance Sheet Property which was acquired or ground-leased by any entity acting in the capacity of landlord (or in any functionally similar capacity to a landlord) under any Off-Balance Sheet Lease within the 12-month period ending on the date of determination of Consolidated Cash Flow, Consolidated Cash Flow shall include Theatre-Level EBITDA for such Off-Balance Sheet Property and shall be determined with respect to such Off-Balance Sheet Property on the basis of actual Theatre-Level EBITDA within such period and projected Theatre-Level EBITDA for the remainder of such period (with such projections being based on the average Theatre-Level EBITDA of comparable theater properties of the Borrower which were operated during the entire 12-month period), and (z) the expense incurred by the Borrower in complying with the provisions of Section 5.27 in granting and recording the Carmike Mortgages and obtaining the Real Estate Collateral Documentation shall be added back to Consolidated Operating Income. "Consolidated Net Income" means for any period, the net income (or deficit) of the Borrower and its Subsidiaries for such period in question (taken as a cumulative whole) after deducting, without duplication, all operating expenses, provisions for all taxes and reserves (including reserves for deferred income taxes) and all other proper 3 4 deductions, all determined in accordance with GAAP on a consolidated basis, after eliminating material inter-company items in accordance with GAAP and after deducting portions of income properly attributable to outside minority interests, if any, in Subsidiaries; provided, however, that there shall be excluded (a) any income or deficit of any other Person accrued prior to the date it becomes a Subsidiary or merges into or consolidates with the Borrower or another Subsidiary, (b) the net income in excess of an amount equal to 5% of Consolidated Net Income for such period before giving effect to this clause (b) (or deficit) of any Person (other than a Subsidiary) in which the Borrower or any Subsidiary has any ownership interest, except to the extent that any such income has been actually received by the Borrower or such Subsidiary in the form of cash dividends or similar distributions, and provided that the resulting income is generated by lines of businesses substantially similar to those of the Borrower and its Subsidiaries taken as a whole during the fiscal year ended December 31, 1998, (c) any restoration to income of any contingency reserve, except to the extent that provision for such reserve was made out of income accrued during such period, (d) any deferred credit or amortization thereof from the acquisition of any properties or assets of any Person, (e) any aggregate net income (but not any aggregate net loss) during such period arising from the sale, exchange or other distribution of capital assets (such term to include all fixed assets, whether tangible or intangible, all inventory sold in conjunction with the disposition of fixed assets and all securities) to the extent the aggregate gains from such transactions exceed losses from such transactions, (f) any impact on the income statement resulting from any write-up of any assets after the Effective Date, (g) any items properly classified as extraordinary in accordance with GAAP, (h) proceeds of life insurance policies to the extent such proceeds exceed premiums paid to maintain such life insurance policies, (i) any portion of the net income of a Subsidiary which is unavailable for the payment of dividends to the Borrower or a Subsidiary, (j) any gain arising from the acquisition of any debt securities for a cost less than principal and accrued interest, (k) in the case of a successor to the Borrower by permitted consolidation or merger or transfer of assets pursuant to Section 5.11, any earnings, of such successor or transferee prior to the consolidation, merger or transfer of assets, (1) any earnings on any Investments of the Borrower or any Subsidiary except to the extent that such earnings are received by the Borrower or such Subsidiary as cash, provided that earnings which would otherwise be excluded from Consolidated Net Income pursuant to the preceding provisions of this clause (1) shall be included in Consolidated Net Income but only to the extent that such earnings are attributable to the net income of any Person (other than a Subsidiary) in which the Borrower or any Subsidiary has any ownership interest and such net income is not otherwise excluded from Consolidated Net Income by virtue of clause (b) of this definition and (m) the Restructuring and Impairment Charges for 1998, the Impairment Charges for 1999, and any Subsequent Restructuring and Impairment Charges up to but not exceeding an aggregate of $10,000,000 in any Fiscal Year (but with any portion of such $10,000,000 which is unused in any Fiscal Year being carried over to subsequent Fiscal Years). "Fee and Leasehold Properties Cash Flow" means, with respect to each Fee Property and each Leasehold Property, the operating income derived therefrom, without provision for any interest, taxes related to income, depreciation, amortization and 4 5 corporate general and administrative expenses, for the Fiscal Year ending December 31, 1999, as determined by reference to the Fee and Leasehold Properties Cash Flow Report. "Fee and Leasehold Properties Cash Flow Report" means the report dated on or about the First Amendment Effective Date which is furnished to the Agent, the Collateral Agent and the Banks pursuant to Section 5.27 and which lists each of the Fee Properties and the Leasehold Properties and shows, for each such Property, the portion of Carmike Mortgage Properties Cash Flow which was produced by such Property. "Fee Properties" means all Properties consisting of real estate and improvements in which the Borrower or EastWynn owns fee simple title. "First Amendment Effective Date" means March 31, 2000. "Impairment Charges for 1999" means asset impairment charges taken by the Borrower for the last Fiscal Quarter of its 1999 Fiscal Year in the amount of $33,037,122. "Leasehold Mortgage Properties" means all Leasehold Properties which have become subject to a Carmike Mortgage and as to which all Real Estate Collateral Documentation required by the Collateral Agent has been obtained pursuant to Section 5.27. "Leasehold Properties" means all Properties consisting of real estate and improvements in which the Borrower or EastWynn has a leasehold interest, excluding real estate and improvements which are subject to and leased pursuant to the Lease. "Permitted Encumbrance" means, with respect to any Fee Property or Leasehold Property which is subject to a Carmike Mortgage, the encumbrances permitted by the Collateral Agent in its reasonable judgment (but not including any Lien on the interests of the Borrower or a Guarantor thereon consisting of a mortgage, deed to secure debt, deed of trust or security agreement) as specified in such Carmike Mortgage. "Real Estate Collateral Documentation" means the instruments, documents and agreements executed and/or delivered by Borrower or EastWynn to the Collateral Agent (if applicable) pursuant to Section 5.27 in connection with each Carmike Mortgage in order to convey to the Collateral Agent (or a trustee for the benefit of the Collateral Agent, as applicable in the relevant jurisdiction) for the ratable benefit of the Secured Parties a first priority Lien (subject to Permitted Encumbrances) on the right, title and interest of the Borrower or EastWynn in the Fee Property or Leasehold Property described therein, and other rights ancillary thereto, all in form and substance reasonably satisfactory to the Collateral Agent, after consultation with the Borrower or EastWynn, as applicable. The Real Estate Collateral Documentation may include, without limitation, the following as to each Fee Property or Leasehold Property: (i) an owner's/lessee's affidavit for each parcel or tract of such Fee Property or Leasehold Property; 5 6 (ii) mortgagee title insurance binders and policies for each tract or parcel of such Fee Property or Leasehold Property; (iii) such landlord consents with respect to the Leasehold Properties as the Collateral Agent may reasonably require from any Third Parties with respect to any portion of such Leasehold Property; (iv) for each Fee Property and Leasehold Property, a copy of any existing survey of each parcel or tract of such Fee Property or Leasehold Property; provided, that if no existing survey exists, the Collateral Agent shall be furnished a current survey showing metes-and-bounds only, and upon request of the Collateral Agent during the existence of an Event of Default, the Collateral Agent shall be furnished a current "as-built" survey; (v) a certificate as to the insurance required by the related Carmike Mortgage; (vi) upon request of the Collateral Agent during the existence of an Event of Default, the Collateral Agent shall be furnished a report of a licensed engineer detailing an environmental inspection of such Fee Property or Leasehold Property; and (vii) an indemnification agreement regarding hazardous materials for such Fee Property or Leasehold Property. "Subsequent Restructuring and Impairment Charges" means any non-cash restructuring charges taken with respect to any impaired assets and any asset impairment charges taken by the Borrower during any Fiscal Year following its 1999 Fiscal Year. 3. Amendment to Section 2.05(a) of the Credit Agreement. Section 2.05(a) of the Credit Agreement hereby is amended by deleting it in its entirety and substituting the following therefor: (a) "Applicable Margin" shall be determined quarterly based upon the ratio of Consolidated Funded Debt to Consolidated Cash Flow (calculated as of the last day of each Fiscal Quarter for the period of 4 consecutive Fiscal Quarters then ended), as follows, subject to adjustment pursuant to the last sentence of this Section 2.05(a):
Ratio of Consolidated Funded Base Rate Loans Euro-Dollar Debt to Consolidated Cash Flow --------------- Loans ------------------------------ ------------ Greater than or equal to 5.5 2.00% 3.00%
6 7 Greater than or equal to 5.0 1.75% 2.75% but less than 5.5 Greater than or equal to 4.5 1.50% 2.50% but less than 5.0 Greater than or equal to 4.0 1.25% 2.25% but less than 4.5 Less than 4.0 1.00% 2.00%
1. The Applicable Margin shall be determined effective as of each date (herein, the "Rate Determination Date") which is 50 days after the last day of the final Fiscal Quarter in the period for which the foregoing ratio is being determined, and the Applicable Margin so determined shall remain effective from such Rate Determination Date until the date which is 50 days after the last day of the Fiscal Quarter in which such Rate Determination Date falls (which latter date shall be a new Rate Determination Date); provided that (i) for the period from and including the First Amendment Effective Date to the first Rate Determination Date occurring in the first Fiscal Quarter of Fiscal Year 2001, the Applicable Margin shall be (A) 2.25% for Base Rate Loans and (B) 3.25% for Euro-Dollar Loans, in each case subject to adjustment pursuant to the last sentence of this Section 2.05(a), (ii) in the case of Applicable Margins determined for the fourth and final Fiscal Quarter of a Fiscal Year, commencing in Fiscal Year 2000, the Rate Determination Date shall be the date which is 95 days after the last day of such final Fiscal Quarter and such Applicable Margins shall be determined based upon the annual audited financial statements for the Fiscal Year ended on the last day of such final Fiscal Quarter, and (iii) if on any Rate Determination Date the Borrower shall have failed to deliver to the Banks the financial statements required to be delivered pursuant to Section 5.01 with respect to the Fiscal Quarter most recently ended prior to such Rate Determination Date (or, in the case of annual audited financial statements, with respect to the Fiscal Year which includes such final Fiscal Quarter), then for the period beginning on such Rate Determination Date and ending on the earlier of (x) the next Rate Determination Date (on which the Applicable Margin shall again be determined pursuant to this paragraph) and (y) the date on which the Borrower shall deliver to the Banks the financial statements to be delivered pursuant to Section 5.01(b) with respect to such Fiscal Quarter (in the case of a failure to deliver quarterly unaudited financial statements) or the date on which the Borrower shall deliver to the Banks the annual audited financial statements to be delivered pursuant to Section 5.01(a) with respect to the Fiscal Year which includes such final Fiscal Quarter (in the case of a failure to deliver annual audited financial statements), the Applicable Margin shall be determined as if the ratio of Consolidated Funded Debt to Consolidated Cash Flow was more than 5.50 at all times during such period. Any change in the Applicable Margin on any Rate Determination Date shall result in a corresponding change, effective on and as of such Rate Determination Date, in 7 8 the interest rate applicable to each Loan outstanding on such Rate Determination Date, provided that (i) for Euro-Dollar Loans, changes in the Applicable Margin shall only be effective for Interest Periods commencing on or after the Rate Determination Date, and (ii) no Applicable Margin shall be decreased pursuant to this Section 2.05 if an Event of Default is in existence on the Rate Determination Date. 2. The Applicable Margin determined pursuant to the foregoing shall be adjusted by (i) an increase on the Carmike Mortgage Properties Test Date, in the percentage shown below for the applicable level of the Carmike Mortgage Properties Cash Flow Coverage achieved as of such date as reflected in the Carmike Mortgage Properties Cash Flow Coverage Report furnished on or within 5 Domestic Business Days prior to such date pursuant to Section 5.27, which increase shall be retroactive to the First Amendment Effective Date, and (ii) a decrease from time to time thereafter, if the Carmike Mortgage Properties Cash Flow Coverage achieved on any date thereafter as reflected in any updated Carmike Mortgage Properties Cash Flow Coverage Report furnished thereafter pursuant to Section 5.27, has increased to a higher level, by a percentage equal to the percentage shown below for the level in effect prior to the delivery of such updated Carmike Mortgage Properties Cash Flow Coverage Report less the percentage shown below for the higher level of Carmike Mortgage Properties Cash Flow Coverage reflected in such updated report, which subsequent decrease shall be effective from and after the date such increase to a higher level is achieved.
Carmike Mortgage Properties Cash Flow Coverage Percentage Level Increase -------------------------------------------------------------- Less than $40,000,000 1.00% -------------------------------------------------------------- Greater than or equal to $40,000,000 but less 0.50% than $50,000,000 -------------------------------------------------------------- Greater than or equal to $50,000,000 but less 0.25% than $60,000,000 -------------------------------------------------------------- Equal to or greater than $60,000,000 0.00% --------------------------------------------------------------
4. Amendment to Section 2.10(b). Section 2.10(b) of the Credit Agreement hereby is amended by deleting it in its entirety and substituting the following therefore: 1. (b) The Borrower shall repay or prepay Loans and the Term Loan in an amount equal to (i) 50% of Net Cash Proceeds, up to the first $50,000,000 of Net Cash Proceeds and 100% of Net Cash Proceeds in excess of thereof and (ii) 75% of any Excess Cash Flow. Payments pursuant to the foregoing clause (i) shall be made within 15 Business Days after the receipt of Net Cash Proceeds (except that prepayments from proceeds of Subordinated Debt shall be made on the date of receipt of such proceeds); provided, that amounts not included in Net Cash Proceeds pursuant to clause 8 9 (iv)(C) of the definition thereof which have not been used or committed to be used within 180 days from the casualty or condemnation of such Property to restore or replace the relevant Property shall be paid on such 180th day. Payments pursuant to the foregoing clause (ii) shall be made on the date the Borrower furnishes its annual financial statements to the Banks pursuant to Section 5.01(a) (or on the date such statements are required to be so furnished pursuant to such section, if they have not been furnished by such date). Prepayments pursuant hereto shall be made to the Agent and the Term Agent, for the ratable account of the Banks and the Term Lenders, based on the aggregate amount of the Commitments and the aggregate principal balance of the Term Loan as of the time of the payment; provided, that from and after the date that the Commitments have been reduced to $150,000,000 by payments made pursuant hereto in accordance with Section 2.08, such repayments or prepayments shall be made solely to the Term Lenders, until the Term Loan is paid in full, except that after the Commitments have so been reduced to $150,000,000, with respect to any sale of Collateral, if the Term Loan has been paid in full (or prepayments pursuant hereto have been waived by the Term Lenders pursuant to Section 2.10 of the Term Loan Credit Agreement), any Net Cash Proceeds from such sale which are not used to purchase replacement Collateral having equal or greater value shall be used to prepay the Loans, and the Commitments shall be reduced by the amount of such prepayments. At least 10 Business Days prior to any sale giving rise to Net Cash Proceeds subject to clause (i) hereof, the Borrower shall send a notice to the Agent (a "Sale Notice") which describes, with respect to such sale, (1) the property to be sold, (2) the anticipated sale date, (3) the anticipated gross sale proceeds and (4) the anticipated Net Sale Proceeds. Promptly upon receipt of the Sale Notice, the Agent shall send a copy thereof to each Bank and each Term Lender. Within 5 Business Days after the completion of such sale, the Borrower shall notify the Agent of the actual gross sale proceeds and Net Cash Proceeds received in connection therewith. At least 20 Business Days prior to furnishing its annual statements to the Banks pursuant to Section 5.01(a) (or on the date such statements are required to be so furnished pursuant to such section, if they have not been furnished by such date), the Borrower shall send a notice to the Agent (an "Excess Cash Flow Notice"), setting forth the amount of Excess Cash Flow payable pursuant hereto with respect to the Fiscal Year just ended. Promptly upon receipt of the Excess Cash Flow Notice, the Agent shall send a copy thereof to each Bank and each Term Lender. 5. Amendment to Section 5.01(c). Section 5.01(c) of the Credit Agreement hereby is amended by deleting it in its entirety and substituting the following therefor: 1. (c) simultaneously with the delivery of each set of financial statements referred to in clauses (a) and (b) above, a certificate, substantially in the form of Exhibit F or in such other form as shall be mutually satisfactory to the Borrower and the Agent (a "Compliance Certificate"), of the chief financial officer or the chief executive officer of the Borrower (i) setting forth in reasonable detail the calculations required to establish whether the Borrower was in compliance with the requirements of Sections 5.03 through 5.08, inclusive, 5.11, 5.21 and 5.26, on the date of such financial statements and (ii) stating whether any Default exists on the date of such certificate and, if any Default then 9 10 exists, setting forth the details thereof and the action which the Borrower is taking or proposes to take with respect thereto. 6. Amendment to Sections 5.01(j) and (k) and new Sections 5.02(k) and (l). The word "and" at the end of Section 5.01(j) is deleted, Section 5.01(k) is relettered as Section 5.01(m), and new Sections 5.01(k) and (l) are added, as follows: 1. (k) within 30 days after the end of each Fiscal Year, a quarterly budget for the next Fiscal Year, including a detailed statement of cash flow, balance sheet and income statement, on a consolidated basis for the Borrower and its Subsidiaries; and; and 2. (l) within 30 days after the end of each Fiscal Quarter, a report concerning theatre operations showing (a) gross attendance, (b) gross concession revenue and (c) gross ticket revenue for the Fiscal Quarter just ended; and 7. Amendment to Section 5.03. Section 5.03 of the Credit Agreement hereby is amended by deleting it in its entirety and by substituting therefor the following: 1. Section 5.03. Ratio of Consolidated Senior Funded Debt to Consolidated Cash Flow. At the end of each Fiscal Quarter, commencing with the Fiscal Quarter ending March 31, 2000, the ratio of Consolidated Senior Funded Debt to Consolidated Cash Flow for the period of 4 consecutive Fiscal Quarters ending on such date shall not be greater than the applicable ratio provided in the following table:
Fiscal Quarter Ending Applicable Ratio On or before September 30, 2000 4.25 to 1.0 December 31, 2000 through September 30, 2001 3.75 to 1.0 December 31, 2001 through September 30, 2002 3.50 to 1.0 December 31, 2002 and thereafter 3.00 to 1.0.
8. Amendment to Section 5.04. Section 5.04 of the Credit Agreement hereby is amended by deleting it in its entirety and by substituting therefor the following: 1. Section 5.04 Ratio of Consolidated Funded Debt to Consolidated Cash Flow. At the end of each Fiscal Quarter ending as provided in the following table, the ratio of Consolidated Funded Debt at the end of such Fiscal Quarter to Consolidated Cash Flow for the period of 4 consecutive Fiscal Quarters ending on such date shall not be greater than the applicable ratio provided in the following table: 10 11
Fiscal Quarter Ending Applicable Ratio On or before September 30, 2000 6.50 to 1.0 December 31, 2000 through September 30, 2001 5.75 to 1.0 December 31, 2001 through September 30, 2002 5.50 to 1.0 December 31, 2002 and thereafter 5.00 to 1.0.
9. Amendment to Section 5.06. Section 5.06 of the Credit Agreement hereby is amended by deleting it in its entirety and by substituting therefor the following: 1. Section 5.06 Fixed Charge Coverage. At the end of each Fiscal Quarter, commencing with the Fiscal Quarter ending March 31, 2000, the ratio of (a) Adjusted Cash Flow to (b) Fixed Charges, in each case for the current Fiscal Quarter and the immediately preceding 3 Fiscal Quarters, shall not be less than the applicable ratio provided in the following table:
Fiscal Quarter Ending Applicable Ratio On or before September 30, 2001 1.25 to 1.0 December 31, 2001 and thereafter 1.40 to 1.0.
10. Amendment to Section 5.07. Section 5.07 of the Credit Agreement hereby is amended by deleting it in its entirety and by substituting therefor the following: 1. Section 5.07 Ratio of Adjusted Consolidated Funded Debt to Adjusted Cash Flow. At the end of each Fiscal Quarter, commencing with the Fiscal Quarter ending March 31, 2000, the ratio of (a) Adjusted Consolidated Funded Debt to (b) Adjusted Cash Flow, in each case for the current Fiscal Quarter and the immediately preceding 3 Fiscal Quarters, shall not be less than the applicable ratio provided in the following table:
Fiscal Quarter Ending Applicable Ratio March 31, 2000 through September 30, 2000 7.5 to 1.0
11 12 December 31, 2000 through December 31, 2001 7.0 to 1.0. March 31, 2002 and thereafter 6.5 to 1.0
11. Amendment to Section 5.21. Section 5.21 of the Credit Agreement hereby is amended by deleting it in its entirety and by substituting therefor the following 1. Section 5.21 Investments. Neither the Borrower nor any of its Subsidiaries shall make Investments in any Person except: (a) Investments in (i) direct obligations of the United States Government maturing within one year, (ii) certificates of deposit issued by a commercial bank whose credit is satisfactory to the Agent, (iii) commercial paper rated A1 or the equivalent thereof by S&P or P1 or the equivalent thereof by Moody's and in either case maturing within 6 months after the date of acquisition, (iv) tender bonds the payment of the principal of and interest on which is fully supported by a letter of credit issued by a United States bank whose long-term certificates of deposit are rated at least AA or the equivalent thereof by S&P and Aa or the equivalent thereof by Moody's, (v) loans or advances to employees not exceeding $1,000,000 in the aggregate principal amount outstanding at any time, in each case made in the ordinary course of business and consistent with practices existing on December 31, 1998, (vi) deposits required by government agencies or public utilities, and (vii) loans, advances or other Investments to or in Guarantors; and (b) other Investments which, in the aggregate since the First Amendment Effective Date, do not exceed $10,000,000; provided, however, immediately after giving effect to the making of any Investment, no Default shall have occurred and be continuing. 12. New Section 5.26. A new Section 5.26 hereby is added to the Credit Agreement, as follows: Section 5.26 Capital Expenditures. At the end of each Fiscal Year, commencing with the Fiscal Quarter ending December 31, 2000, Capital Expenditures for such Fiscal Year (excluding non-maintenance Capital Expenditures on theatres opened on or before December 31, 1999 which were contracted for on or before such date) shall not exceed (a) for the Fiscal Year ending December 31, 2000, $25,000,000 and (b) for each Fiscal Year thereafter, $35,000,000. 13. New Section 5.27. A new Section 5.27 hereby is added to the Credit Agreement, as follows: Section 5.27 Carmike Mortgages; Pricing Adjustments. On or within 10 days after the First Amendment Effective Date, the Borrower shall deliver to the Agent, the Collateral Agent and the Secured Parties the Fee and Leasehold Properties Cash Flow Report. Prior to the Carmike Mortgage Properties Test Date, the Borrower shall (i) for each Fee Property and each Leasehold Property as to which no Third Party consent is required, execute and deliver to the Collateral 12 13 Agent a Carmike Mortgage and the related Real Estate Collateral Documentation reasonably requested by the Collateral Agent with respect thereto, and (ii) for each Leasehold Property as to which a Third Party consent is required, use its best efforts to obtain such Third Party consent, and upon obtaining such consent, execute and deliver to the Collateral Agent a Carmike Mortgage and the related Real Estate Collateral Documentation reasonably requested by the Collateral Agent with respect thereto. After the Carmike Mortgage Properties Test Date, the Borrower shall continue to use its best efforts to obtain such Third Party consents not previously obtained, and upon obtaining such consent, execute and deliver to the Collateral Agent a Carmike Mortgage and the related Real Estate Collateral Documentation reasonably requested by the Collateral Agent with respect thereto. On the Carmike Mortgage Properties Test Date, the Borrower shall provide to the Agent, the Collateral Agent and the Secured Parties the initial Carmike Mortgage Properties Cash Flow Coverage Report, reflecting the Carmike Mortgage Properties Cash Flow Coverage as of the Carmike Mortgage Properties Test Date (or a date within 5 Domestic Business Days prior thereto). After the Carmike Mortgage Properties Test Date, the Borrower may provide to the Agent, the Collateral Agent and the Secured Parties at any time, and shall provide to the Agent, the Collateral Agent and the Secured Parties upon the Agent's request, an update of the Carmike Mortgage Properties Cash Flow Coverage Report, reflecting the Carmike Mortgage Properties Cash Flow Coverage as of such updated report. On or before 60 days after the First Amendment Effective Date, the Intercreditor Agreement shall be amended as appropriate to include within its scope the Carmike Mortgages and the Fee Properties and Leasehold Mortgage Properties subject thereto. The Applicable Margin shall be adjusted from time to time as required by the last sentence of Section 2.05(a), based on the Carmike Mortgage Properties Cash Flow Coverage as reflected in the Carmike Mortgage Properties Cash Flow Coverage Report, as updated from time to time pursuant to the foregoing. 14. Amendment to Section 6.01(b). Section 6.01(b) of the Credit Agreement hereby is amended by deleting it in its entirety and by substituting therefor the following: (b) the Borrower shall fail to observe or perform any covenant contained in Sections 5.01(e), 5.01(j), 5.02(ii), 5.03 to 5.07, inclusive, 5.09 (as to the Borrower) and 5.10 (as to the Borrower) and 5.12, or Section 5.15, 5.21(b), or 5.23 to 5.26, inclusive; 15. Exhibit F. Exhibit F (Compliance Certificate) hereby is deleted in its entirety and Exhibit F hereto is substituted therefor. 16. Restatement of Representations and Warranties. The Borrower hereby restates and renews each and every representation and warranty heretofore made by it in the Credit Agreement and the other Loan Documents as fully as if made on the date hereof (except as to representations and warranties made as of a specific date) and with specific reference to this Consent and all other Loan Documents executed and/or delivered in connection herewith. 13 14 17. Ratification. The Borrower hereby restates, ratifies and reaffirms each and every term, covenant and condition set forth in the Credit Agreement and the other Loan Documents effective as of the date hereof. 18. Counterparts. This First Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts and transmitted by facsimile to the other parties, each of which when so executed and delivered by facsimile shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the same instrument. 19. Section References. Section titles and references used in this First Amendment shall be without substantive meaning or content of any kind whatsoever and are not a part of the agreements among the parties hereto evidenced hereby. 20. No Default. To induce the Agent and the Banks to enter into this First Amendment and to continue to make advances pursuant to the Credit Agreement, the Borrower hereby acknowledges and agrees that, as of the date hereof, and after giving effect to the terms hereof, there exists (i) no Default or Event of Default and (ii) no right of offset, defense, counterclaim, claim or objection in favor of the Borrower arising out of or with respect to any of the Loans or other obligations of the Borrower owed to the Agent or the Banks under the Credit Agreement. 21. Further Assurances. The Borrower agrees to take such further actions as the Agent shall reasonably request in connection herewith to evidence the Amendments herein contained. 22. Governing Law. This First Amendment shall be governed by and construed and interpreted in accordance with, the laws of the State of Georgia. 23. Conditions Precedent. This First Amendment shall become effective only upon: (i) execution and delivery (including by facsimile) of this First Amendment by the Borrower, the Agent and the Required Banks; (ii) execution and delivery (including by facsimile) of the Consent and Reaffirmation of Guarantors at the end hereof by the Guarantors; (iii) execution and delivery (including by facsimile) of amendments to the Term Loan Credit Agreement, the Reimbursement Agreement and the Lease comparable to those contained herein (as applicable), including equivalent changes to pricing, reporting requirements, financial covenants and regarding execution of Carmike Mortgages), as summarized in communications from the Agent to the Banks (and each of the Banks consents to such amendments); and (iv) payment to the Agent, for the ratable account of the Banks which execute this First Amendment of an amendment fee in the amount of 0.05% of the aggregate Commitments on the date of closing. 14 15 IN WITNESS WHEREOF, the Borrower, the Agent and each of the Banks has caused this First Amendment to be duly executed, under seal, by its duly authorized officer as of the day and year first above written. CARMIKE CINEMAS, INC., WACHOVIA BANK, N.A., as Borrower (SEAL) as Agent and as a Bank (SEAL) By: By: ------------------------- -------------------------- Title: Title: FIRST UNION NATIONAL BANK, SUNTRUST BANK, as a Bank (SEAL) as a Bank (SEAL) By: By: ------------------------- -------------------------- Title: Title: THE BANK OF NEW YORK, as a Bank (SEAL) By: -------------------------- Title: FIRST AMERICAN NATIONAL BANK, THE INDUSTRIAL BANK OF JAPAN, as a Bank (SEAL) LIMITED (SEAL) as a Bank By: By: ------------------------- -------------------------- Title: Title: THE SANWA BANK, LIMITED, THE BANK OF TOKYO-MITSUBISHI, LTD., as a Bank (SEAL) as a Bank (SEAL) By: By: ------------------------- -------------------------- Title: Title: 15 16 COLUMBUS BANK AND TRUST HIBERNIA NATIONAL BANK, COMPANY, as a Bank (SEAL) as a Bank (SEAL) By: By: -------------------------- -------------------------- Title: Title: GENERAL ELECTRIC CAPITAL CORPORATION, as a Bank (SEAL) By: -------------------------- Title: 16 17 CONSENT AND REAFFIRMATION OF GUARANTORS Each of the undersigned (i) acknowledges receipt of the foregoing First Amendment, (ii) consents to the execution and delivery of the First Amendment by the parties thereto and (iii) reaffirms all of its obligations and covenants under the Guaranty Agreement dated as of January 29, 1999 executed by it, and agrees that none of such obligations and covenants shall be affected by the execution and delivery of the First Amendment. This Consent and Reaffirmation may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the same instrument. WOODEN NICKEL PUB, INC. (SEAL), MILITARY SERVICES, INC. (SEAL) By: By: -------------------------- -------------------------- Title: Title: EASTWYNN THEATRES, INC. (SEAL) By: -------------------------- Title: 17 18 EXHIBIT F FORM OF COMPLIANCE CERTIFICATE Reference is made to the Amended and Restated Credit Agreement dated as of January 29, 1999 (as modified and supplemented and in effect from time to time, the "Credit Agreement") among Carmike Cinemas, Inc., the Banks from time to time parties thereto, and Wachovia Bank, N.A., as Agent. Capitalized terms used herein shall have the meanings ascribed thereto in the Credit Agreement. Pursuant to Section 5.01(c) of the Credit Agreement, ______________, the duly authorized ____________________, of Carmike Cinemas, Inc., hereby certifies to the Agent and the Banks that the information contained in the Compliance Check List attached hereto is true, accurate and complete as of ______________, ___, and that no Default is in existence on and as of the date hereof. CARMIKE CINEMAS, INC. By: ------------------------------------ Title: 18 19 COMPLIANCE CHECKLIST CARMIKE CINEMAS, INC. --------------,------- 1. Ratio of Consolidated Senior Funded Debt to Consolidated Total Cash Flow (Section 5.03) At the end of each Fiscal Quarter, commencing with the Fiscal Quarter ending March 31, 2000, the ratio of Consolidated Senior Funded Debt to Consolidated Cash Flow for the period of 4 consecutive Fiscal Quarters ending on such date shall not be greater than the applicable ratio provided in the following table:
Fiscal Quarter Ending Applicable Ratio On or before September 30, 2000 4.25 to 1.0 December 31, 2000 through September 30, 2001 3.75 to 1.0 December 31, 2001 through September 30, 2002 3.50 to 1.0 December 31, 2002 and thereafter 3.00 to 1.0 (a) Consolidated Senior Funded Debt Schedule - 4 $____________ (b) Consolidated Cash Flow Schedule - 5 $____________ Actual Ratio of (a) to (b) _____________ Maximum Ratio [4.25 to 1.0] [3.75 to 1.0] [3.50 to 1.0] [3.00 to 1.0]
2. Ratio of Consolidated Funded Debt to Consolidated Cash Flow (Section 5.04) At the end of each Fiscal Quarter ending as provided in the following table, the ratio of Consolidated Funded Debt at the end of such Fiscal Quarter to Consolidated Cash Flow for the period of 4 consecutive Fiscal Quarters ending on such date shall not be greater than the applicable ratio provided in the following table:
Fiscal Quarter Ending Applicable Ratio On or before September 30, 2000 6.50 to 1.0
19 20 COMPLIANCE CHECKLIST CARMIKE CINEMAS, INC. ______________, ______ December 31, 2000 through September 30, 2001 5.75 to 1.0 December 31, 2001 through September 30, 2002 5.50 to 1.0 December 31, 2002 and thereafter 5.00 to 1.0 (a) Consolidated Funded Debt Schedule - 4 $____________ (b) Consolidated Cash Flow Schedule - 5 $____________ Actual Ratio of (a) to (b) ___ to 1.00 Maximum Ratio [6.5 to 1.00] [5.75 to 1.0] [5.50 to 1.00] [5.00 to 1.00] 3. Restricted Payments (Section 5.05) The Borrower will not declare or make any, or permit any Subsidiary which is not a Wholly-Owned Subsidiary to make any, Restricted Payment after the Effective Date, if the aggregate amount of such Restricted Payments made in any consecutive 4 Fiscal Quarter period would exceed $4,000,000; provided that after giving effect to the payment of any such Restricted Payments, no Default shall be in existence or be created thereby. (a) Total Restricted Payments made after the Effective Date and during the 3 Fiscal Quarters prior to most recent Fiscal Quarter $____________ (b) Restricted Payment during most recent Fiscal Quarter $____________ (c) sum of (a) and (b) $____________ Limitation (c) may not exceed $4,000,000 4. Fixed Charge Coverage (Section 5.06) At the end of each Fiscal Quarter, commencing with the Fiscal Quarter ending March 31, 2000, the ratio of (a) Adjusted Cash Flow to (b) Fixed Charges, in each case for the 20 21 COMPLIANCE CHECKLIST CARMIKE CINEMAS, INC. ______________, ______ current Fiscal Quarter and the immediately preceding 3 Fiscal Quarters, shall not be less than the applicable ratio provided in the following table: Fiscal Quarter Ending Applicable Ratio On or before September 30, 2001 1.25 to 1.0 December 31, 2001 and thereafter 1.40 to 1.0 (a) Adjusted Cash Flow - Schedule - 3 $____________ (b) Fixed Charges - Schedule - 2 $____________ Actual Ratio of (a) to (b) _____________ Maximum Ratio [1.25 to 1.00] [1.40 to 1.00] 5. Ratio of Adjusted Consolidated Funded Debt to Adjusted Cash Flow (Section 5.07) 1. At the end of each Fiscal Quarter, commencing with the Fiscal Quarter ending March 31, 2000, the ratio of (a) Adjusted Consolidated Funded Debt to (b) Adjusted Cash Flow, in each case for the current Fiscal Quarter and the immediately preceding 3 Fiscal Quarters, shall not be less than the applicable ratio provided in the following table: Fiscal Quarter Ending Applicable Ratio March 31, 2000 through September 30, 2000 7.5 to 1.0 December 31, 2000 through December 31, 2001 7.0 to 1.0. March 31, 2002 and thereafter 6.5 to 1.0 (a) Consolidated Funded Debt - Schedule 4 $____________ (b) Rental Obligations - Schedule - 6 $____________ (c) (b) times 8 $____________ (d) sum of (a) plus (c) $____________ (e) Adjusted Cash Flow - Schedule - 3 $____________ 21 22 COMPLIANCE CHECKLIST CARMIKE CINEMAS, INC. ______________, ______ Actual Ratio of (d) to (e) ___ to 1.0 Maximum Ratio [7.5 to 1.0] [7.0 to 1.0] [6.5 to 1.0] 6. Negative Pledge (Section 5.08) None of the Borrower's or any Subsidiary's property is subject to any Lien securing Debt except for (i) Liens permitted by paragraph (a) through (e), and paragraph (l), of Section 5.08 of the Credit Agreement, (b) Liens not permitted by the aforementioned paragraphs of Section 5.08 (1) on fixed assets permitted under paragraph (l) securing Debt in an aggregate principal amount at any time outstanding not to exceed 5% of Consolidated Total Capitalization and (c) Liens not permitted by paragraphs (a) through (e) and paragraph (l) securing Debt in an aggregate principal amount at any time outstanding not to exceed 5% of Consolidated Total Capitalization: (a) Liens on fixed assets subject to paragraph (l):
Description of Lien and Property Amount of subject Debt Secured: to same: 1. ________________________ $____________________ 2. ________________________ $____________________ 3. ________________________ $____________________ 4. ________________________ $____________________ 5. ________________________ $____________________ 6. ________________________ $____________________ 7. ________________________ $____________________ Total of items 1-7 $____________________ (b) Limitation (5% of Consolidated Total Capitalization) $____________________ (c) Liens on other assets subject to paragraph (m): Description of Lien and Property Amount of Debt Secured: subject to same: 1. _______________________ $____________________ 2. _______________________ $____________________ 3. _______________________ $____________________
22 23 COMPLIANCE CHECKLIST CARMIKE CINEMAS, INC. ______________, ______ 4. _______________________ $____________________ 5. _______________________ $____________________ 6. _______________________ $____________________ 7. _______________________ $____________________ Total of items 1-7 $____________________ (d) Limitation (5% of Consolidated Total Capitalization) $____________________ 7. Sales of Assets (Section 5.11) The Borrower will not, nor will it permit any Subsidiary to, ... sell, lease or otherwise transfer all or any substantial part of its assets to, any other Person, or discontinue or eliminate any business line or segment, ... provided that the foregoing limitation on the sale, lease or other transfer of assets and on the discontinuation or elimination of a business line or segment shall not prohibit (i) the sale, lease or other transfer of assets by a Subsidiary to any other Subsidiary (other than of Collateral by Eastwynn) or to the Borrower, or (ii) subject to the mandatory prepayment provisions of Section 2.10(b), during any Fiscal Quarter, a transfer of assets in an arm's length transaction for fair market value or the discontinuance or elimination of a business line or segment (in a single transaction or in a series of related transactions) unless the aggregate assets to be so transferred or utilized in a business line or segment to be so discontinued, when combined with all other assets transferred, and all other assets utilized in all other business lines or segments discontinued, during such Fiscal Quarter and the immediately preceding three Fiscal Quarters (excluding, however, transfers of assets permitted by clause (i) of this Section) contributed more than 10% of Consolidated Operating Income during the 4 consecutive Fiscal Quarters immediately preceding such Fiscal Quarter, and (e) subject to the mandatory prepayment provisions of Section 2.10(b) and to presentation to the Agent and the Banks of a certificate showing compliance with the limitations contained in this clause (e) after giving effect thereto, the Borrower may enter into sale/leaseback transactions after the Effective Date in an amount not to exceed in the aggregate $150,000,000, provided in each of the foregoing such cases no Default shall be in existence or be created thereby. At the request of the Borrower, the Collateral Agent shall release any Collateral sold by the Borrower or Eastwynn in conformity with the foregoing provisions, so long as any prepayments required by Section 2.10(b) have been made. 23 24 COMPLIANCE CHECKLIST CARMIKE CINEMAS, INC. ______________, ______ (a) Aggregate Operating Income contributed by assets sold during Fiscal Quarter just ended(1) $____________ (b) Aggregate Operating Income contributed by assets sold during 3 prior Fiscal Quarters(1) $____________ (c) sum of (a) and (b) $____________ (d) Consolidated Operating Income during 4 Fiscal Quarters ending with Fiscal Quarter just ended $____________ (e) 10% of (d) $____________ Limitations: (c) may not exceed (e) 8. Investments (Section 5.21) Neither the Borrower nor any of its Subsidiaries shall make Investments in any Person except: (a) Investments in (i) direct obligations of the United States Government maturing within one year, (ii) certificates of deposit issued by a commercial bank whose credit is satisfactory to the Agent, (iii) commercial paper rated A1 or the equivalent thereof by S&P or P1 or the equivalent thereof by Moody's and in either case maturing within 6 months after the date of acquisition, (iv) tender bonds the payment of the principal of and interest on which is fully supported by a letter of credit issued by a United States bank whose long-term certificates of deposit are rated at least AA or the equivalent thereof by S&P and Aa or the equivalent thereof by Moody's, (v) loans or advances to employees not exceeding $1,000,000 in the aggregate principal amount outstanding at any time, in each case made in the ordinary course of business and consistent with practices existing on December 31, 1998, (vi) deposits required by government agencies or public utilities, and (vii) loans, advances or other Investments to or in Guarantors; and (b) other Investments which, in the aggregate since the First Amendment Effective Date, do not exceed $10,000,000; provided, however, immediately after giving effect to the making of any Investment, no Default shall have occurred and be continuing. (a) loans and advances to employees $____________ Limitation $1,000,000 (b) Aggregate Investments made pursuant to clause (b) from First Amendment Effective Date and prior to most recent Fiscal Quarter $____________ (c) Investments made pursuant to clause (b) during most recent Fiscal Quarter $____________ - --------------------------- (1)Excluding transfers permitted by clause (i) 24 25 COMPLIANCE CHECKLIST CARMIKE CINEMAS, INC. ______________, ______ (d) Sum of (b) and (c) $____________ Limitation: (d) may not exceed $10,000,000 1. Capital Expenditures (5.26) At the end of each Fiscal Year, commencing with the Fiscal Quarter ending December 31, 2000, Capital Expenditures for such Fiscal Year (excluding non-maintenance Capital Expenditures on theatres opened on or before December 31, 1999 which were contracted for on or before such date) shall not exceed (a) for the Fiscal Year ending December 31, 2000, $25,000,000 and (b) for each Fiscal Year thereafter, $35,000,000. (a) Capital Expenditures incurred during Fiscal Year to date $____________ (b) Tenant improvements included in (a) and actually reimbursed to date $____________ (c) Estimated amount of reimbursable tenant improvements included in (a) but not yet reimbursed $____________ (d) Non-maintenance Capital Expenditures on theatres opened on or before December 31, 1999 which were contracted for on or before such date $____________ (e) Sum of (a), less (b), less (c), less (d) $____________ Limitation: (e) may not exceed sum of $25,000,000 in Fiscal Year 2000 and $35,000,000 in any Fiscal Year thereafter 25 26 COMPLIANCE CHECKLIST CARMIKE CINEMAS, INC. ______________, ______ 2. Report as to Net Cash Proceeds paid pursuant to Section 2.10(b). Following is the information pertaining to the sale of each property during the Fiscal Quarter just ended which sale gave rise to the receipt of Net Cash Proceeds. (a) Property: [insert description of property sold] (1) date of sale ________________ (2) gross proceeds received $______________ (3) Net Cash Proceeds received $______________ (4) aggregate amount of prepayment on Loans and Term Loans $______________ (b) Property: [insert description of property sold] (1) date of sale ________________ (2) gross proceeds received $______________ (3) Net Cash Proceeds received $______________ (4) aggregate amount of prepayment on Loans and Term Loans $______________ TOTALS: total gross proceeds received $_______________ total Net Cash Proceeds received $_______________ total aggregate prepayments made $_______________ 26 27 COMPLIANCE CHECKLIST CARMIKE CINEMAS, INC. ______________, ______ SCHEDULE - 1 CONSOLIDATED TOTAL CAPITALIZATION (a) Consolidated Net Worth $___________________ (b) Consolidated Funded Debt $___________________ (c) Consolidated Total Capitalization (sum of (a) plus (b)) $___________________ 27 28 COMPLIANCE CHECKLIST CARMIKE CINEMAS, INC. ______________, ______ SCHEDULE - 2 FIXED CHARGES (a) Rental Obligations for: ____ quarter ____ _-__ $_____________ ____ quarter ____ _-__ $_____________ ____ quarter ____ _-__ $_____________ ____ quarter ____ _-__ $_____________ Total Rental Obligations $_____________ (b) Interest Expense for: ____ quarter ____ _-__ $_____________ ____ quarter ____ _-__ $_____________ ____ quarter ____ _-__ $_____________ ____ quarter ____ _-__ $_____________ Total Interest Expense $_____________ TOTAL FIXED CHARGES (sum of (a) plus (b)) $_____________ ADJUSTED FIXED CHARGES (c) Dividends for: ____ quarter ____ _-__ $_____________ ____ quarter ____ _-__ $_____________ ____ quarter ____ _-__ $_____________ ____ quarter ____ _-__ $_____________ Total Dividends $_____________ (d) Tax expense for: ____ quarter ____ _-__ $_____________ ____ quarter ____ _-__ $_____________ 28 29 COMPLIANCE CHECKLIST CARMIKE CINEMAS, INC. ______________, ______ ____ quarter ____ _-__ $_____________ ____ quarter ____ _-__ $_____________ Total Tax Expense $_____________ (e) Principal payments(2) for: ____ quarter ____ _-__ $_____________ ____ quarter ____ _-__ $_____________ ____ quarter ____ _-__ $_____________ ____ quarter ____ _-__ $_____________ Total principal payments $_____________ TOTAL ADJUSTED FIXED CHARGES (sum of (a) plus (b) plus (c) plus (d) plus (d)) $_____________ - ----------------------- (2) Exclude principal payments on the Senior Notes 29 30 COMPLIANCE CHECKLIST CARMIKE CINEMAS, INC. ______________, ______ SCHEDULE - 3 ADJUSTED CASH FLOW(3) (a) ____ quarter ____ $____________ Consolidated Operating Income $____________ Rental Obligations $____________ Depreciation and amortization $____________ Net income arising from sale, exchange or distribution of capital assets (not to exceed 5% of Consolidated Operating Income for such period) $____________ Theatre-Level EBITDA $____________ Total for Quarter $____________ (b) ____ quarter ____ $____________ Consolidated Operating Income $____________ Rental Obligations $____________ Depreciation and amortization $____________ Net income arising from sale, exchange or distribution of capital assets (not to exceed 5% of Consolidated Operating Income for such period) $____________ Theatre-Level EBITDA $____________ Total for Quarter $____________ (c) ____ quarter ____ $____________ Consolidated Operating Income $____________ Rental Obligations $____________ Depreciation and amortization $____________ Net income arising from sale, exchange or distribution of capital assets (not to exceed 5% of Consolidated Operating Income for such period) $____________ Theatre-Level EBITDA $____________ Total for Quarter $____________ - ---------------------------------- (3) In determining Adjusted Cash Flow, the expense incurred by the Borrower in complying with the provisions of Section 5.27 in granting and recording the Carmike Mortgages and obtaining the Real Estate Collateral Documentation shall be added back to Consolidated Operating Income. 30 31 COMPLIANCE CHECKLIST CARMIKE CINEMAS, INC. ______________, ______ (d) ____ quarter ____ $____________ Consolidated Operating Income $____________ Rental Obligations $____________ Depreciation and amortization $____________ Net income arising from sale, exchange or distribution of capital assets (not to exceed 5% of Consolidated Operating Income for such period) $____________ Theatre-Level EBITDA $____________ Total for Quarter $____________ Total Adjusted Cash Flow $============ (sum of (a) plus (b) plus (c) plus (d) 31 32 COMPLIANCE CHECKLIST CARMIKE CINEMAS, INC. -------------, ----- SCHEDULE - 4 CONSOLIDATED FUNDED DEBT Interest (a) Funded Debt Rate Maturity Total Secured ___________________ ________ ________ $____________ ___________________ ________ ________ $____________ ___________________ ________ ________ $____________ ___________________ ________ ________ $____________ ___________________ ________ ________ $____________ Total Secured $____________ Unsecured ___________________ ________ ________ $____________ ___________________ ________ ________ $____________ ___________________ ________ ________ $____________ ___________________ ________ ________ $____________ ___________________ ________ ________ $____________ Total Unsecured $____________ Guarantees _________________________________________________ $____________ _________________________________________________ $____________ Total $____________ Redeemable Preferred Stock $____________ Total $____________ Other Debt __________________________________________________ $____________ __________________________________________________ $____________ __________________________________________________ $____________ Total Funded Debt $ ============ (b) Current Debt $____________ (c) Unescrowed Off-Balance Sheet Lease Indebtedness (to the extent not included in (a) or (b) $____________ 32 33 COMPLIANCE CHECKLIST CARMIKE CINEMAS, INC. -------------, ----- (d) Off-Balance Sheet Lease Equity Amounts (to the extent not included in (a) or (b) $____________ (e) Consolidated Funded Debt (a) plus (b) plus (c) plus (d) $____________ CONSOLIDATED SENIOR FUNDED DEBT (f) Subordinated Debt $____________ (g) Consolidated Senior Funded Debt (e) less (f) $____________ 33 34 COMPLIANCE CHECKLIST CARMIKE CINEMAS, INC. -------------, ----- SCHEDULE - 5 CONSOLIDATED CASH FLOW(4) (a) ____ quarter ____ $____________ Consolidated Operating Income $____________ Depreciation and amortization $____________ Off-Balance Sheet Lease Payments $____________ Net income arising from sale, exchange or distribution of capital assets (not to exceed 5% of Consolidated Operating Income for such period) $____________ Total for Quarter $____________ (b) ____ quarter ____ $____________ Consolidated Operating Income $____________ Depreciation and amortization $____________ Off-Balance Sheet Lease Payments $____________ Net income arising from sale, exchange or distribution of capital assets (not to exceed 5% of Consolidated Operating Income for such period) $____________ Total for Quarter $____________ (c) ____ quarter ____ $____________ Consolidated Operating Income $____________ Depreciation and amortization $____________ Off-Balance Sheet Lease Payments $____________ Net income arising from sale, exchange or distribution of capital assets (not to exceed 5% of Consolidated Operating Income for such period) $____________ Total for Quarter $____________ - ----------------------------- (4) In determining Cash Flow, the expense incurred by the Borrower in complying with the provisions of Section 5.27 in granting and recording the Carmike Mortgages and obtaining the Real Estate Collateral Documentation shall be added back to Consolidated Operating Income. 34 35 COMPLIANCE CHECKLIST CARMIKE CINEMAS, INC. -------------, ----- (d) ____ quarter ____ $____________ Consolidated Operating Income $____________ Depreciation and amortization $____________ Off-Balance Sheet Lease Payments $____________ Net income arising from sale, exchange or distribution of capital assets (not to exceed 5% of Consolidated Operating Income for such period) $____________ Total for Quarter $____________ Consolidated Cash Flow (sum of (a) plus (b) plus (c) plus (d) $ ============ 35 36 COMPLIANCE CHECKLIST CARMIKE CINEMAS, INC. -------------, ----- SCHEDULE - 6 RENTAL OBLIGATIONS(5) ____ quarter ____ $____________ ____ quarter ____ $____________ ____ quarter ____ $____________ ____ quarter ____ $____________ Total $____________ - ----------------------------- (5) Rental Obligations shall not include Rental Obligations under the Lease and Rental Obligations under leases arising from sale/leaseback transactions of theatres shall be annualized on a proforma basis, as to any Operating Lease which has been in effect for less than 4 Fiscal Quarters. 36 EX-10.2 3 SECOND AMENDMENT TO TERM LOAN CREDIT AGREEMENT 1 EXHIBIT 10.2 SECOND AMENDMENT TO TERM LOAN CREDIT AGREEMENT THIS SECOND AMENDMENT TO TERM LOAN CREDIT AGREEMENT (this "Second Amendment") is dated as of March 31, 2000 among CARMIKE CINEMAS, INC. (the "Borrower"), WACHOVIA BANK, N.A., as Administrative Agent (the "Administrative Agent"), and the Lenders parties hereto (collectively, the "Lenders"); W I T N E S S E T H : WHEREAS, the Borrower, the Administrative Agent and the Lenders executed and delivered that certain Term Loan Credit Agreement, dated as of February 25, 1999, as amended by First Amendment to Term Loan Credit Agreement dated as of July 13, 1999 (as so amended, the "Credit Agreement"); WHEREAS, the Borrower has requested that the Administrative Agent and the Lenders amend the Credit Agreement as set forth herein and the Administrative Agent and the Lenders have agreed to such consent, subject to the terms and conditions hereof; NOW, THEREFORE, for and in consideration of the above premises and other good and valuable consideration, the receipt and sufficiency of which hereby is acknowledged by the parties hereto, the Borrower, the Administrative Agent and the Lenders hereby covenant and agree as follows: 1. Definitions. Unless otherwise specifically defined herein, each term used herein which is defined in the Credit Agreement shall have the meaning assigned to such term in the Credit Agreement. Each reference to "hereof", "hereunder", "herein" and "hereby" and each other similar reference and each reference to "this Agreement" and each other similar reference contained in the Credit Agreement shall from and after the date hereof refer to the Credit Agreement as amended hereby. 2. Amendments to Section 1.01 of the Credit Agreement. Section 1.01 of the Credit Agreement hereby is amended by deleting the definitions of "Adjusted Fixed Charges", "Collateral", "Collateral Documents", "Consolidated Cash Flow" and "Consolidated Net Income", and adding the following new definitions in appropriate alphabetical sequence: "Adjusted Cash Flow" means, for any period, Consolidated Operating Income for such period, plus, to the extent deducted in determining the amount thereof, (i) Rental Obligations (less any principal portion of any Off-Balance Sheet Lease), (ii) depreciation and amortization, and (iii) any aggregate net income during such period arising from the sale, exchange or other distribution of capital assets, provided that the total amount so included pursuant to this clause (iii) shall not exceed 5% of Consolidated Operating Income for such period, provided further, however, that, in calculating Adjusted Cash Flow for any such period, any acquisition or disposition of assets that shall have occurred during such period will be deemed to have occurred at the beginning of such period; and (iv) with respect to any Off-Balance Sheet Property which was acquired or ground-leased 2 by any entity acting in the capacity of landlord (or in any functionally similar capacity to a landlord) under any Off-Balance Sheet Lease within the 12-month period ending on the date of determination of Consolidated Cash Flow, Adjusted Cash Flow shall include Theatre-Level EBITDA for such Off-Balance Sheet Property and shall be determined with respect to such Off-Balance Sheet Property on the basis of actual Theatre-Level EBITDA within such period and projected Theatre-Level EBITDA for the remainder of such period (with such projections being based on the average Theatre-Level EBITDA of comparable theater properties of the Borrower which were operated during the entire 12-month period); provided, that in determining Adjusted Cash Flow, the expense incurred by the Borrower in complying with the provisions of Section 5.26 in granting and recording the Carmike Mortgages and obtaining the Real Estate Collateral Documentation shall be added back to Consolidated Operating Income. "Adjusted Consolidated Funded Debt" means at any time the sum (without duplication) of: (i) Consolidated Funded Debt; plus (ii) the product of (x) Rental Obligations (excluding Rental Obligations under the Lease) for the 4 Fiscal Quarter period just ended (and Rental Obligations under leases arising from sale/leaseback transactions of theatres shall be annualized on a proforma basis, as to any Operating Lease which has been in effect for less than 4 Fiscal Quarters), times (y) 8. "Capital Expenditures" means for any period the sum of all capital expenditures incurred during such period by the Borrower and its Consolidated Subsidiaries, as determined in accordance with GAAP, but excluding any Capital Expenditures consisting of tenant improvement expenses which are reimbursed or reimbursable to the Borrower or a Consolidated Subsidiary by the landlord. "Carmike Mortgage Properties Cash Flow" means, with respect to each Fee Property subject to a Carmike Mortgage and each Leasehold Mortgage Property, the portion of Fee and Leasehold Properties Cash Flow derived therefrom. "Carmike Mortgage Properties Cash Flow Coverage" means Carmike Mortgage Properties Cash Flow, as of the date of measurement, as determined by reference to the Carmike Mortgage Properties Cash Flow Coverage Report. Carmike Mortgage Properties Cash Flow Coverage Report means a report or an updated report, in form and substance reasonably satisfactory to the Collateral Agent, to be provided to the Agent, the Collateral Agent and the Secured Parties pursuant to Section 5.26, reflecting the Carmike Mortgage Properties Cash Flow Coverage as of the date of such report or updated report. "Carmike Mortgage Properties Test Date" means November 1, 2000. "Carmike Mortgages" means, individually or collectively, as the context shall require, any mortgage, deed to secure debt, deed of trust or similar instrument appropriate for the relevant jurisdiction, in form and substance satisfactory to the Agent and the Collateral Agent pursuant to which the Borrower and EastWynn, respectively, grant a first priority, perfected Lien on all Fee Properties and all Leasehold Properties which 2 3 become Leasehold Mortgages pursuant to Section 5.26, to the Collateral Agent, for the ratable benefit of the Secured Parties, to secure the Secured Obligations (or a designated portion thereof), as contemplated in Section 5.26, as it may hereafter be amended or supplemented from time to time. "Collateral" means the property of the Borrower and EastWynn, respectively, in which the Collateral Agent, for the ratable benefit of the Secured Parties, is granted a security interest pursuant to the Security Agreement, the Pledge Agreement and the Carmike Mortgages, to secure the Secured Obligations, for the ratable benefit of the Secured Parties. "Collateral Documents" means the Intercreditor Agreement, the Pledge Agreement, the Security Agreement, the Carmike Mortgages, and such financing statements as the Collateral Agent may require to perfect its security interest in the Collateral. "Consolidated Cash Flow" means, for any period, the sum of Consolidated Operating Income of the Borrower, and its Subsidiaries, plus to the extent deducted in determining such Consolidated Operating Income (i) depreciation and amortization, and (ii) any aggregate net income during such period arising from the sale, exchange or other distribution of capital assets, provided, however, that the total amount so included pursuant to this clause (ii) shall not exceed 5% of Consolidated Operating Income for such period, provided further, however, that, in calculating Consolidated Cash Flow for any such period, any acquisition or disposition of assets that shall have occurred during such period will be deemed to have occurred at the beginning of such period; provided further, however, that (x) for purposes of determining the ratio of Consolidated Funded Debt to Consolidated Cash Flow and the ratio of Consolidated Senior Funded Debt to Consolidated Cash Flow, all Off-Balance Sheet Lease Payments made during the relevant period which has been deducted in computing Consolidated Net Income shall be added back in computing Consolidated Cash Flow, (y) with respect to any Off-Balance Sheet Property which was acquired or ground-leased by any entity acting in the capacity of landlord (or in any functionally similar capacity to a landlord) under any Off-Balance Sheet Lease within the 12-month period ending on the date of determination of Consolidated Cash Flow, Consolidated Cash Flow shall include Theatre-Level EBITDA for such Off-Balance Sheet Property and shall be determined with respect to such Off-Balance Sheet Property on the basis of actual Theatre-Level EBITDA within such period and projected Theatre-Level EBITDA for the remainder of such period (with such projections being based on the average Theatre-Level EBITDA of comparable theater properties of the Borrower which were operated during the entire 12-month period), and (z) the expense incurred by the Borrower in complying with the provisions of Section 5.26 in granting and recording the Carmike Mortgages and obtaining the Real Estate Collateral Documentation shall be added back to Consolidated Operating Income. "Consolidated Net Income" means for any period, the net income (or deficit) of the Borrower and its Subsidiaries for such period in question (taken as a cumulative whole) after deducting, without duplication, all operating expenses, provisions for all taxes and reserves (including reserves for deferred income taxes) and all other proper 3 4 deductions, all determined in accordance with GAAP on a consolidated basis, after eliminating material inter-company items in accordance with GAAP and after deducting portions of income properly attributable to outside minority interests, if any, in Subsidiaries; provided, however, that there shall be excluded (a) any income or deficit of any other Person accrued prior to the date it becomes a Subsidiary or merges into or consolidates with the Borrower or another Subsidiary, (b) the net income in excess of an amount equal to 5% of Consolidated Net Income for such period before giving effect to this clause (b) (or deficit) of any Person (other than a Subsidiary) in which the Borrower or any Subsidiary has any ownership interest, except to the extent that any such income has been actually received by the Borrower or such Subsidiary in the form of cash dividends or similar distributions, and provided that the resulting income is generated by lines of businesses substantially similar to those of the Borrower and its Subsidiaries taken as a whole during the fiscal year ended December 31, 1998, (c) any restoration to income of any contingency reserve, except to the extent that provision for such reserve was made out of income accrued during such period, (d) any deferred credit or amortization thereof from the acquisition of any properties or assets of any Person, (e) any aggregate net income (but not any aggregate net loss) during such period arising from the sale, exchange or other distribution of capital assets (such term to include all fixed assets, whether tangible or intangible, all inventory sold in conjunction with the disposition of fixed assets and all securities) to the extent the aggregate gains from such transactions exceed losses from such transactions, (f) any impact on the income statement resulting from any write-up of any assets after the Effective Date, (g) any items properly classified as extraordinary in accordance with GAAP, (h) proceeds of life insurance policies to the extent such proceeds exceed premiums paid to maintain such life insurance policies, (i) any portion of the net income of a Subsidiary which is unavailable for the payment of dividends to the Borrower or a Subsidiary, (j) any gain arising from the acquisition of any debt securities for a cost less than principal and accrued interest, (k) in the case of a successor to the Borrower by permitted consolidation or merger or transfer of assets pursuant to Section 5.11, any earnings, of such successor or transferee prior to the consolidation, merger or transfer of assets, (1) any earnings on any Investments of the Borrower or any Subsidiary except to the extent that such earnings are received by the Borrower or such Subsidiary as cash, provided that earnings which would otherwise be excluded from Consolidated Net Income pursuant to the preceding provisions of this clause (1) shall be included in Consolidated Net Income but only to the extent that such earnings are attributable to the net income of any Person (other than a Subsidiary) in which the Borrower or any Subsidiary has any ownership interest and such net income is not otherwise excluded from Consolidated Net Income by virtue of clause (b) of this definition and (m) the Restructuring and Impairment Charges for 1998, the Impairment Charges for 1999, and any Subsequent Restructuring and Impairment Charges up to but not exceeding an aggregate of $10,000,000 in any Fiscal Year (but with any portion of such $10,000,000 which is unused in any Fiscal Year being carried over to subsequent Fiscal Years). "Fee and Leasehold Properties Cash Flow" means, with respect to each Fee Property and each Leasehold Property, the operating income derived therefrom, without provision for any interest, taxes related to income, depreciation, amortization and 4 5 corporate general and administrative expenses, for the Fiscal Year ending December 31, 1999, as determined by reference to the Fee and Leasehold Properties Cash Flow Report. "Fee and Leasehold Properties Cash Flow Report" means the report dated on or about the Second Amendment Effective Date which is furnished to the Agent, the Collateral Agent and the Lenders pursuant to Section 5.26 and which lists each of the Fee Properties and the Leasehold Properties and shows, for each such Property, the portion of Consolidated Cash Flow for the Fiscal Year ending December 31, 1999 which was produced by such Property. "Fee Properties" means all Properties consisting of real estate and improvements in which the Borrower or EastWynn owns fee simple title. "Impairment Charges for 1999" means asset impairment charges taken by the Borrower for the last Fiscal Quarter of its 1999 Fiscal Year in the amount of $33,037,122. "Leasehold Mortgage Properties" means all Leasehold Properties which have become subject to a Carmike Mortgage and as to which all Real Estate Collateral Documentation required by the Collateral Agent has been obtained pursuant to Section 5.26. "Leasehold Properties" means all Properties consisting of real estate and improvements in which the Borrower or EastWynn has a leasehold interest, excluding real estate and improvements which are subject to and leased pursuant to the Lease. "Permitted Encumbrance" means, with respect to any Fee Property or Leasehold Property which is subject to a Carmike Mortgage, the encumbrances permitted by the Collateral Agent in its reasonable judgment (but not including any Lien on the interests of the Borrower or a Guarantor thereon consisting of a mortgage, deed to secure debt, deed of trust or security agreement) as specified in such Carmike Mortgage. "Real Estate Collateral Documentation" means the instruments, documents and agreements executed and/or delivered by Borrower or EastWynn to the Collateral Agent (if applicable) pursuant to Section 5.26 in connection with each Carmike Mortgage in order to convey to the Collateral Agent (or a trustee for the benefit of the Collateral Agent, as applicable in the relevant jurisdiction) for the ratable benefit of the Secured Parties a first priority Lien (subject to Permitted Encumbrances) on the right, title and interest of the Borrower or EastWynn in the Fee Property or Leasehold Property described therein, and other rights ancillary thereto, all in form and substance reasonably satisfactory to the Collateral Agent, after consultation with the Borrower or EastWynn, as applicable. The Real Estate Collateral Documentation may include, without limitation, the following as to each Fee Property or Leasehold Property: (i) an owner's/lessee's affidavit for each parcel or tract of such Fee Property or Leasehold Property; (ii) mortgagee title insurance binders and policies for each tract or parcel of such Fee Property or Leasehold Property; 5 6 (iii) such landlord consents with respect to the Leasehold Properties as the Collateral Agent may reasonably require from any Third Parties with respect to any portion of such Leasehold Property; (iv) for each Fee Property and Leasehold Property, a copy of any existing survey of each parcel or tract of such Fee Property or Leasehold Property; provided, that if no existing survey exists, the Collateral Agent shall be furnished a current survey showing metes-and-bounds only, and upon request of the Collateral Agent during the existence of an Event of Default, the Collateral Agent shall be furnished a current "as-built" survey; (v) a certificate as to the insurance required by the related Carmike Mortgage; (vi) upon request of the Collateral Agent during the existence of an Event of Default, the Collateral Agent shall be furnished a report of a licensed engineer detailing an environmental inspection of such Fee Property or Leasehold Property; and (vii) an indemnification agreement regarding hazardous materials for such Fee Property or Leasehold Property. "Second Amendment Effective Date" means March 31, 2000. "Subsequent Restructuring and Impairment Charges" means any non-cash restructuring charges taken with respect to any impaired assets and any asset impairment charges taken by the Borrower during any Fiscal Year following its 1999 Fiscal Year. 3. Amendment to Section 2.05(a) of the Credit Agreement. Section 2.05(a) of the Credit Agreement hereby is amended by deleting it in its entirety and substituting the following therefor: (a) "Applicable Margin" shall be determined quarterly based upon the ratio of Consolidated Funded Debt to Consolidated Cash Flow (calculated as of the last day of each Fiscal Quarter for the period of 4 consecutive Fiscal Quarters then ended), as follows subject to adjustment pursuant to the last sentence of this Section 2.05(a):
Ratio of Consolidated Funded Debt to Euro-Dollar Consolidated Cash Flow Base Rate Loans Loans ---------------------- --------------- ----------- Greater than or equal to 4.5 2.50% 3.5% Less than 4.5 2.25% 3.25%
6 7 The Applicable Margin shall be determined effective as of each date (herein, the "Rate Determination Date") which is 50 days after the last day of the final Fiscal Quarter in the period for which the foregoing ratio is being determined, and the Applicable Margin so determined shall remain effective from such Rate Determination Date until the date which is 50 days after the last day of the Fiscal Quarter in which such Rate Determination Date falls (which latter date shall be a new Rate Determination Date); provided that (i) in the case of Applicable Margins determined for the fourth and final Fiscal Quarter of a Fiscal Year, commencing in Fiscal Year 2000, the Rate Determination Date shall be the date which is 95 days after the last day of such final Fiscal Quarter and such Applicable Margins shall be determined based upon the annual audited financial statements for the Fiscal Year ended on the last day of such final Fiscal Quarter, and (ii) if on any Rate Determination Date the Borrower shall have failed to deliver to the Lenders the financial statements required to be delivered pursuant to Section 5.01 with respect to the Fiscal Quarter most recently ended prior to such Rate Determination Date (or, in the case of annual audited financial statements, with respect to the Fiscal Year which includes such final Fiscal Quarter), then for the period beginning on such Rate Determination Date and ending on the earlier of (x) the next Rate Determination Date (on which the Applicable Margin shall again be determined pursuant to this paragraph) and (y) the date on which the Borrower shall deliver to the Lenders the financial statements to be delivered pursuant to Section 5.01(b) with respect to such Fiscal Quarter (in the case of a failure to deliver quarterly unaudited financial statements) or the date on which the Borrower shall deliver to the Lenders the annual audited financial statements to be delivered pursuant to Section 5.01(a) with respect to the Fiscal Year which includes such final Fiscal Quarter (in the case of a failure to deliver annual audited financial statements), the Applicable Margin shall be determined as if the ratio of Consolidated Funded Debt to Consolidated Cash Flow was more than 5.0 at all times during such period. Any change in the Applicable Margin on any Rate Determination Date shall result in a corresponding change, effective on and as of such Rate Determination Date, in the interest rate applicable to each Loan outstanding on such Rate Determination Date, provided that (i) for Euro-Dollar Loans, changes in the Applicable Margin shall only be effective for Interest Periods commencing on or after the Rate Determination Date, and (ii) no Applicable Margin shall be decreased pursuant to this Section 2.05 if an Event of Default is in existence on the Rate Determination Date. The Applicable Margin determined pursuant to the foregoing shall be adjusted by (i) an increase on the Carmike Mortgage Properties Test Date, in the percentage shown below for the applicable level of the Carmike Mortgage Properties Cash Flow Coverage achieved as of such date as reflected in the Carmike Mortgage Properties Cash Flow Coverage Report furnished on or within 5 Domestic Business Days prior to such date pursuant to Section 5.26, which increase shall be retroactive to the Second Amendment Effective Date, and (ii) a decrease from time to time thereafter, if the Carmike Mortgage Properties Cash Flow Coverage achieved on any date thereafter as reflected in any updated Carmike Mortgage Properties Cash Flow Coverage Report furnished thereafter pursuant to Section 5.26, has increased to a higher level, by a percentage equal to the percentage shown below for the level in effect prior to the delivery of such updated Carmike Mortgage Properties Cash Flow Coverage Report less the percentage shown below for the higher level of Carmike Mortgage Properties Cash Flow Coverage reflected 7 8 in such updated report, which subsequent decrease shall be effective from and after the date such increase to a higher level is achieved.
Carmike Mortgage Properties Cash Percentage Flow Coverage Level Increase -------------------------------- ---------- Less than $40,000,000 1.00% Greater than or equal to $40,000,000 but less than $50,000,000 0.50% Greater than or equal to $50,000,000 but less than $60,000,000 0.25% Equal to or greater than $60,000,000 0.00%
4. Amendment to Section 2.10. Section 2.10 of the Credit Agreement hereby is amended by deleting it in its entirety and substituting the following therefor: The Borrower shall repay or prepay Loans and the Revolving Loans in an amount equal to (i) 50% of Net Cash Proceeds, up to the first $50,000,000 of Net Cash Proceeds and 100% of Net Cash Proceeds in excess of thereof and (ii) 75% of any Excess Cash Flow. Payments pursuant to the foregoing clause (i) shall be made within 15 Business Days after the receipt of Net Cash Proceeds (except that prepayments from proceeds of Subordinated Debt shall be made on the date of receipt of such proceeds); provided, that amounts not included in Net Cash Proceeds pursuant to clause (iv)(C) of the definition thereof which have not been used or committed to be used within 180 days from the casualty or condemnation of such Property to restore or replace the relevant Property shall be paid on such 180th day. Payments pursuant to the foregoing clause (ii) shall be made on the date the Borrower furnishes its annual financial statements to the Lenders pursuant to Section 5.01(a) (or on the date such statements are required to be so furnished pursuant to such section, if they have not been furnished by such date). Prepayments pursuant hereto shall be made to the Administrative Agent and to the Revolver Agent, for the ratable account of the Revolver Banks and the Lenders, based on the aggregate amount of the Revolver Commitments and the aggregate principal balance of the Loans as of the time of the payment; provided, that: (1) any Lender (a "Declining Lender") may, by notice to the Administrative Agent as provided below, decline to accept any particular prepayment pursuant to this Section 2.10, in which event the amount of any prepayment otherwise payable to such Declining Lender shall be paid to the Revolver Agent for the ratable account of the Revolver Banks, subject to the provisions of subclause (2) below; and 8 9 (2) from and after the date that the Revolver Commitments have been reduced to $150,000,000 by payments made pursuant hereto and in accordance with Section 2.08 of the Revolver Credit Agreement, such repayments or prepayments shall be made solely to the Lenders, other than any Lenders which are Declining Lenders with respect thereto (and the amount of any prepayment otherwise payable to a Declining Lenders shall be not be subject to prepayment pursuant to this Section 2.08, except as provided in subclause (2) below), until the Loans are paid in full, and (3) notwithstanding the reduction of the Revolver Commitments to $150,000,000 by prepayments pursuant hereto in accordance with Section 2.08 of the Revolving Credit Agreement, but only with respect to any sale of Collateral, to the extent of any Net Cash Proceeds from such sale which are not used to purchase replacement Collateral having equal or greater value and are not paid to the Declining Lenders pursuant to subclause (2) above shall be used to prepay the Revolving Loans, and the Revolver Commitments shall be reduced by the amount of such prepayments in accordance with the terms of the Revolver Credit Agreement. At least 10 Business Days prior to any sale giving rise to Net Cash Proceeds subject to clause (i) hereof, the Borrower shall send a notice to the Administrative Agent (a "Sale Notice") which describes, with respect to such sale, (1) the property to be sold, (2) the anticipated sale date, (3) the anticipated gross sale proceeds and (4) the anticipated Net Sale Proceeds. Promptly upon receipt of the Sale Notice, the Administrative Agent shall send a copy thereof to each Lender and each Revolver Bank. Within 5 Business Days after the completion of such sale, the Borrower shall notify the Administrative Agent of the actual gross sale proceeds and Net Cash Proceeds received in connection therewith. At least 20 Business Days prior to furnishing its annual statements to the Lenders pursuant to Section 5.01(a) (or on the date such statements are required to be so furnished pursuant to such section, if they have not been furnished by such date), the Borrower shall send a notice to the Administrative Agent (an "Excess Cash Flow Notice", setting forth the amount of Excess Cash Flow payable pursuant hereto with respect to the Fiscal Year just ended. Promptly upon receipt of the Excess Cash Flow Notice, the Administrative Agent shall send a copy thereof to each Lender and each Revolver Bank. Within 15 Business Days after receipt of a copy of a Sale Notice or any Excess Cash Flow Notice, each Term Lender desiring to waive a prepayment hereunder shall so notify the Administrative Agent in writing (and any Term Lender which fails to give such notice within such period shall be deemed not to have waived such payment). All prepayments made for the account of the Lenders pursuant to this Section 2.10 shall be accompanied by any amount required to be paid pursuant to Sections 2.07 and 8.05(a), and shall be applied in installments of principal in the inverse order of maturity. 5. Amendment to Section 5.01(c). Section 5.01(c) of the Credit Agreement hereby is amended by deleting it in its entirety and substituting the following therefor: (c) simultaneously with the delivery of each set of financial statements referred to in clauses (a) and (b) above, a certificate, substantially in the form of Exhibit F or in such other form as shall be mutually satisfactory to the Borrower and the Administrative Agent 9 10 (a "Compliance Certificate"), of the chief financial officer or the chief executive officer of the Borrower (i) setting forth in reasonable detail the calculations required to establish whether the Borrower was in compliance with the requirements of Sections 5.03 through 5.08, inclusive, 5.11, 5.21 and 5.25, on the date of such financial statements and (ii) stating whether any Default exists on the date of such certificate and, if any Default then exists, setting forth the details thereof and the action which the Borrower is taking or proposes to take with respect thereto. 6. Amendment to Sections 5.01(j) and (k) and new Sections 5.02(k) and (l). The word "and" at the end of Section 5.01(j) is deleted, Section 5.01(k) is relettered as Section 5.01(m), and new Sections 5.01(k) and (l) are added, as follows: (k) within 30 days after the end of each Fiscal Year, a quarterly budget for the next Fiscal Year, including a detailed statement of cash flow, balance sheet and income statement, on a consolidated basis for the Borrower and its Subsidiaries; and (l) within 30 days after the end of each Fiscal Quarter, a report concerning theatre operations showing (a) gross attendance, (b) gross concession revenue and (c) gross ticket revenue for the Fiscal Quarter just ended; and 7. Amendment to Section 5.03. Section 5.03 of the Credit Agreement hereby is amended by deleting it in its entirety and by substituting therefor the following: Section 5.03. Ratio of Consolidated Senior Funded Debt to Consolidated Cash Flow. At the end of each Fiscal Quarter, commencing with the Fiscal Quarter ending March 31, 2000, the ratio of Consolidated Senior Funded Debt to Consolidated Cash Flow for the period of 4 consecutive Fiscal Quarters ending on such date shall not be greater than the applicable ratio provided in the following table:
Fiscal Quarter Ending Applicable Ratio --------------------- ---------------- On or before September 30, 2000 4.25 to 1.0 December 31, 2000 through September 30, 2001 3.75 to 1.0 December 31, 2001 through September 30, 2002 3.50 to 1.0 December 31, 2002 and thereafter 3.00 to 1.0.
8. Amendment to Section 5.04. Section 5.04 of the Credit Agreement hereby is amended by deleting it in its entirety and by substituting therefor the following: 10 11 Section 5.04 Ratio of Consolidated Funded Debt to Consolidated Cash Flow. At the end of each Fiscal Quarter ending as provided in the following table, the ratio of Consolidated Funded Debt at the end of such Fiscal Quarter to Consolidated Cash Flow for the period of 4 consecutive Fiscal Quarters ending on such date shall not be greater than the applicable ratio provided in the following table:
Fiscal Quarter Ending Applicable Ratio --------------------- ---------------- On or before September 30, 2000 6.50 to 1.0 December 31, 2000 through September 30, 2001 5.75 to 1.0 December 31, 2001 through September 30, 2002 5.50 to 1.0 December 31, 2002 and thereafter 5.00 to 1.0.
9. Amendment to Section 5.06. Section 5.06 of the Credit Agreement hereby is amended by deleting it in its entirety and by substituting therefor the following: Section 5.06 Fixed Charge Coverage. At the end of each Fiscal Quarter, commencing with the Fiscal Quarter ending March 31, 2000, the ratio of (a) Adjusted Cash Flow to (b) Fixed Charges, in each case for the current Fiscal Quarter and the immediately preceding 3 Fiscal Quarters, shall not be less than the applicable ratio provided in the following table:
Fiscal Quarter Ending Applicable Ratio --------------------- ---------------- On or before September 30, 2001 1.25 to 1.0 December 31, 2001 and thereafter 1.40 to 1.0.
10. Amendment to Section 5.07. Section 5.07 of the Credit Agreement hereby is amended by deleting it in its entirety and by substituting therefor the following: Section 5.07 Ratio of Adjusted Consolidated Funded Debt to Adjusted Cash Flow. At the end of each Fiscal Quarter, commencing with the Fiscal Quarter ending March 31, 2000, the ratio of (a) Adjusted Consolidated Funded Debt to (b) Adjusted Cash Flow, in each case for the current Fiscal Quarter and the immediately preceding 3 Fiscal Quarters, shall not be less than the applicable ratio provided in the following table: 11 12
Fiscal Quarter Ending Applicable Ratio --------------------- ---------------- March 31, 2000 through September 30, 2000 7.5 to 1.0 December 31, 2000 through December 31, 2001 7.0 to 1.0. March 31, 2002 and thereafter 6.5 to 1.0
11. Amendment to Section 5.21. Section 5.21 of the Credit Agreement hereby is amended by deleting it in its entirety and by substituting therefor the following Section 5.21 Investments. Neither the Borrower nor any of its Subsidiaries shall make Investments in any Person except: (a) Investments in (i) direct obligations of the United States Government maturing within one year, (ii) certificates of deposit issued by a commercial bank whose credit is satisfactory to the Agent, (iii) commercial paper rated A1 or the equivalent thereof by S&P or P1 or the equivalent thereof by Moody's and in either case maturing within 6 months after the date of acquisition, (iv) tender bonds the payment of the principal of and interest on which is fully supported by a letter of credit issued by a United States bank whose long-term certificates of deposit are rated at least AA or the equivalent thereof by S&P and Aa or the equivalent thereof by Moody's, (v) loans or advances to employees not exceeding $1,000,000 in the aggregate principal amount outstanding at any time, in each case made in the ordinary course of business and consistent with practices existing on December 31, 1998, (vi) deposits required by government agencies or public utilities, and (vii) loans, advances or other Investments to or in Guarantors; and (b) other Investments which, in the aggregate since the Second Amendment Effective Date, do not exceed $10,000,000; provided, however, immediately after giving effect to the making of any Investment, no Default shall have occurred and be continuing. 12. New Section 5.25. A new Section 5.25 hereby is added to the Credit Agreement, as follows: Section 5.25 Capital Expenditures. At the end of each Fiscal Year, commencing with the Fiscal Quarter ending December 31, 2000, Capital Expenditures (excluding non-maintenance Capital Expenditures on theatres opened on or before December 31, 1999 which were contracted for on or before such date) for such Fiscal Year shall not exceed (a) for the Fiscal Year ending December 31, 2000, $25,000,000 and (b) for each Fiscal Year thereafter, $35,000,000. 13. New Section 5.26. A new Section 5.26 hereby is added to the Credit Agreement, as follows: 12 13 Section 5.26 Carmike Mortgages; Pricing Adjustments. On or within 10 days after the Second Amendment Effective Date, the Borrower shall deliver to the Agent, the Collateral Agent and the Secured Parties the Fee and Leasehold Properties Cash Flow Report. Prior to the Carmike Mortgage Properties Test Date, the Borrower shall (i) for each Fee Property and each Leasehold Property as to which no Third Party consent is required, execute and deliver to the Collateral Agent a Carmike Mortgage and the related Real Estate Collateral Documentation reasonably requested by the Collateral Agent with respect thereto, and (ii) for each Leasehold Property as to which a Third Party consent is required, use its best efforts to obtain such Third Party consent, and upon obtaining such consent, execute and deliver to the Collateral Agent a Carmike Mortgage and the related Real Estate Collateral Documentation reasonably requested by the Collateral Agent with respect thereto. After the Carmike Mortgage Properties Test Date, the Borrower shall continue to use its best efforts to obtain such Third Party consents not previously obtained, and upon obtaining such consent, execute and deliver to the Collateral Agent a Carmike Mortgage and the related Real Estate Collateral Documentation reasonably requested by the Collateral Agent with respect thereto. On the Carmike Mortgage Properties Test Date, the Borrower shall provide to the Agent, the Collateral Agent and the Secured Parties the initial Carmike Mortgage Properties Cash Flow Coverage Report, reflecting the Carmike Mortgage Properties Cash Flow Coverage as of the Carmike Mortgage Properties Test Date (or a date within 5 Domestic Business Days prior thereto). After the Carmike Mortgage Properties Test Date, the Borrower may provide to the Agent, the Collateral Agent and the Secured Parties at any time, and shall provide to the Agent, the Collateral Agent and the Secured Parties upon the Agent's request, an update of the Carmike Mortgage Properties Cash Flow Coverage Report, reflecting the Carmike Mortgage Properties Cash Flow Coverage as of such updated report. On or before 60 days after the Second Amendment Effective Date, the Intercreditor Agreement shall be amended as appropriate to include within its scope the Carmike Mortgages and the Fee Properties and Leasehold Mortgage Properties subject thereto. The Applicable Margin shall be adjusted from time to time as required by the last sentence of Section 2.05(a), based on the Carmike Mortgage Properties Cash Flow Coverage as reflected in the Carmike Mortgage Properties Cash Flow Coverage Report, as updated from time to time pursuant to the foregoing. 14. Amendment to Section 6.01(b). Section 6.01(b) of the Credit Agreement hereby is amended by deleting it in its entirety and by substituting therefor the following: (b) the Borrower shall fail to observe or perform any covenant contained in Sections 5.01(e), 5.01(j), 5.02(ii), 5.03 to 5.07, inclusive, 5.09 (as to the Borrower) and 5.10 (as to the Borrower) and 5.12, or Section 5.15, 5.21(b), or 5.23 to 5.25, inclusive; 15. Exhibit F. Exhibit F (Compliance Certificate) hereby is deleted in its entirety and Exhibit F hereto is substituted therefor. 16. Restatement of Representations and Warranties. The Borrower hereby restates and renews each and every representation and warranty heretofore made by it in the Credit Agreement and the other Loan Documents as fully as if made on the date hereof (except as to 13 14 representations and warranties made as of a specific date) and with specific reference to this Consent and all other Loan Documents executed and/or delivered in connection herewith. 17. Ratification. The Borrower hereby restates, ratifies and reaffirms each and every term, covenant and condition set forth in the Credit Agreement and the other Loan Documents effective as of the date hereof. 18. Counterparts. This Second Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts and transmitted by facsimile to the other parties, each of which when so executed and delivered by facsimile shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the same instrument. 19. Section References. Section titles and references used in this Second Amendment shall be without substantive meaning or content of any kind whatsoever and are not a part of the agreements among the parties hereto evidenced hereby. 20. No Default. To induce the Administrative Agent and the Lenders to enter into this Second Amendment, the Borrower hereby acknowledges and agrees that, as of the date hereof, and after giving effect to the terms hereof, there exists (i) no Default or Event of Default and (ii) no right of offset, defense, counterclaim, claim or objection in favor of the Borrower arising out of or with respect to any of the Loans or other obligations of the Borrower owed to the Administrative Agent or the Lenders under the Credit Agreement. 21. Further Assurances. The Borrower agrees to take such further actions as the Administrative Agent shall reasonably request in connection herewith to evidence the Amendments herein contained. 22. Governing Law. This Second Amendment shall be governed by and construed and interpreted in accordance with, the laws of the State of New York. 23. Conditions Precedent. This Second Amendment shall become effective only upon: (i) execution and delivery (including by facsimile) of this Second Amendment by the Borrower, the Administrative Agent and the Required Lenders; (ii) execution and delivery (including by facsimile) of the Consent and Reaffirmation of Guarantors at the end hereof by the Guarantors; (iii) execution and delivery (including by facsimile) of amendments to the Revolver Credit Agreement, the Reimbursement Agreement and the Lease comparable to those contained herein (as applicable), including equivalent changes to pricing, reporting requirements, financial covenants and regarding execution of Carmike Mortgages), as summarized in communications from the Administrative Agent to the Lenders (and each of the Lenders consents to such amendments); and (iv) payment to the Administrative Agent, for the ratable account of the Lenders which execute this Second Amendment of an amendment fee in the amount of 0.05% of the aggregate principal amount of the Loans outstanding on the date of closing. 14 15 [SIGNATURES COMMENCE ON NEXT PAGE] 15 16 IN WITNESS WHEREOF, the Borrower, the Administrative Agent and each of the Lenders has caused this Second Amendment to be duly executed, under seal, by its duly authorized officer as of the day and year first above written. CARMIKE CINEMAS, INC., as Borrower (SEAL) By: Title: ----------------------- ------------------------------ 16 17 WACHOVIA BANK, N.A., as Administrative Agent and as a Lender (SEAL) By: ------------------------ Title: 17 18 SKM-LIBERTYVIEW CBO I LIMITED, (SEAL) By: ------------------------- Title: 18 19 SENIOR DEBT PORTFOLIO, as a Lender (SEAL) By: Boston Management and Research, as Investment Advisor By: ------------------------- Title: 19 20 SEQUILS - PILGRIM 1, LTD, LTD., as a Lender as (SEAL) By: Pilgrim Investments, Inc., as its investment manager By: ------------------------- Title: 20 21 ML CLO XV PILGRIM AMERICA (CAYMAN) LTD as a Lender (SEAL) By: Pilgrim Investments, LLC., as its investment manager By: ------------------------- Title: 21 22 OSPREY INVESTMENTS PORTFOLIO, as a Lender (SEAL) By: Citibank, N.A., as Manager By: ------------------------- Title: 22 23 THE TORONTO DOMINION BANK, as a Lender (SEAL) By: ------------------------- Title: 23 24 SENECA CBO II, L.P., as a Lender (SEAL) By: ------------------------- Title: 24 25 FIVE FINANCE CORPORATION, As a Lender (SEAL) By: Citibank, N.A., as Additional Investment Manager for and on Behalf of Five Finance Corporation By: ------------------------- Title: 25 26 GENERAL ELECTRIC CAPITAL CORPORATION, as a Lender (SEAL) By: ------------------------- Title: 26 27 BLACK DIAMOND CAPITAL MANAGEMENT, L.L.C., as collateral agent for Black Diamond International Funding, Ltd., as a Lender (SEAL) By: ------------------------- Title: 27 28 Sankaty Advisors, Inc. as Collateal Manager for GREAT POINT CLO 1999-1 LTD, as Term Lender By: ------------------------- Title: 28 29 THE CIT GROUP/EQUIPMENT FINANCING, INC., as a Lender (SEAL) By: ------------------------- Title: 29 30 THE FIRST UNION NATIONAL BANK, as a Lender (SEAL) By: ------------------------- Title: 30 31 CONSENT AND REAFFIRMATION OF GUARANTORS Each of the undersigned (i) acknowledges receipt of the foregoing Second Amendment, (ii) consents to the execution and delivery of the Second Amendment by the parties thereto and (iii) reaffirms all of its obligations and covenants under the Guaranty Agreement dated as of February 25, 1999 executed by it, and agrees that none of such obligations and covenants shall be affected by the execution and delivery of the Second Amendment. This Consent and Reaffirmation may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the same instrument. WOODEN NICKEL PUB, INC. (SEAL), MILITARY SERVICES, INC. (SEAL) By: By: ---------------------------- -------------------------------- Title: Title: EASTWYNN THEATRES, INC. (SEAL) By: ---------------------------- Title: 31 32 EXHIBIT F FORM OF COMPLIANCE CERTIFICATE Reference is made to the Term Loan Credit Agreement dated as of February 25, 1999 (as modified and supplemented and in effect from time to time, the "Credit Agreement") among Carmike Cinemas, Inc., the Lenders from time to time parties thereto, and Wachovia Bank, N.A., as Administrative Agent. Capitalized terms used herein shall have the meanings ascribed thereto in the Credit Agreement. Pursuant to Section 5.01(c) of the Credit Agreement, ______________________, the duly authorized ____________________, of Carmike Cinemas, Inc., hereby certifies to the Administrative Agent and the Lenders that the information contained in the Compliance Check List attached hereto is true, accurate and complete as of ______________, ___, and that no Default is in existence on and as of the date hereof. CARMIKE CINEMAS, INC. By: ------------------------------- Title: 32 33 COMPLIANCE CHECKLIST CARMIKE CINEMAS, INC. ______________,____ 1. Ratio of Consolidated Senior Funded Debt to Consolidated Total Cash Flow (Section 5.03) At the end of each Fiscal Quarter, commencing with the Fiscal Quarter ending March 31, 2000, the ratio of Consolidated Senior Funded Debt to Consolidated Cash Flow for the period of 4 consecutive Fiscal Quarters ending on such date shall not be greater than the applicable ratio provided in the following table:
Fiscal Quarter Ending Applicable Ratio --------------------- ---------------- On or before September 30, 2000 4.25 to 1.0 December 31, 2000 through September 30, 2001 3.75 to 1.0 December 31, 2001 through September 30, 2002 3.50 to 1.0 December 31, 2002 and thereafter 3.00 to 1.0 (a) Consolidated Senior Funded Debt Schedule - 4 $____________ (b) Consolidated Cash Flow Schedule - 5 $____________ Actual Ratio of (a) to (b) _____________ Maximum Ratio [4.25 to 1.0] [3.75 to 1.0] [3.50 to 1.0] [3.00 to 1.0]
2. Ratio of Consolidated Funded Debt to Consolidated Cash Flow (Section 5.04) At the end of each Fiscal Quarter ending as provided in the following table, the ratio of Consolidated Funded Debt at the end of such Fiscal Quarter to Consolidated Cash Flow for the period of 4 consecutive Fiscal Quarters ending on such date shall not be greater than the applicable ratio provided in the following table: 33 34 COMPLIANCE CHECKLIST CARMIKE CINEMAS, INC. ______________,____
Fiscal Quarter Ending Applicable Ratio --------------------- ---------------- On or before September 30, 2000 6.50 to 1.0 December 31, 2000 through September 30, 2001 5.75 to 1.0 December 31, 2001 through September 30, 2002 5.50 to 1.0 December 31, 2002 and thereafter 5.00 to 1.0 (a) Consolidated Funded Debt Schedule - 4 $____________ (b) Consolidated Cash Flow Schedule - 5 $____________ Actual Ratio of (a) to (b) ___ to 1.00 Maximum Ratio [6.50 to 1.00] [5.75 to 1.0] [5.50 to 1.00] [5.00 to 1.00]
3. Restricted Payments (Section 5.05) The Borrower will not declare or make any, or permit any Subsidiary which is not a Wholly-Owned Subsidiary to make any, Restricted Payment after the Effective Date, if the aggregate amount of such Restricted Payments made in any consecutive 4 Fiscal Quarter period would exceed $4,000,000; provided that after giving effect to the payment of any such Restricted Payments, no Default shall be in existence or be created thereby. (a) Total Restricted Payments made after the Effective Date and during the 3 Fiscal Quarters prior to most recent Fiscal Quarter $____________ (b) Restricted Payment during most recent Fiscal Quarter $____________ (c) sum of (a) and (b) $____________ Limitation (c) may not exceed $4,000,000 34 35 COMPLIANCE CHECKLIST CARMIKE CINEMAS, INC. ______________,____ 4. Fixed Charge Coverage (Section 5.06) At the end of each Fiscal Quarter, commencing with the Fiscal Quarter ending March 31, 2000, the ratio of (a) Adjusted Cash Flow to (b) Fixed Charges, in each case for the current Fiscal Quarter and the immediately preceding 3 Fiscal Quarters, shall not be less than the applicable ratio provided in the following table:
Fiscal Quarter Ending Applicable Ratio --------------------- ---------------- On or before September 30, 2001 1.25 to 1.0 December 31, 2001 and thereafter 1.40 to 1.0 (a) Adjusted Cash Flow - Schedule - 3 $____________ (b) Fixed Charges - Schedule - 2 $____________ Actual Ratio of (a) to (b) _____________ Maximum Ratio [1.25 to 1.00] [1.40 to 1.00]
5. Ratio of Adjusted Consolidated Funded Debt to Adjusted Cash Flow (Section 5.07) At the end of each Fiscal Quarter, commencing with the Fiscal Quarter ending March 31, 2000, the ratio of (a) Adjusted Consolidated Funded Debt to (b) Adjusted Cash Flow, in each case for the current Fiscal Quarter and the immediately preceding 3 Fiscal Quarters, shall not be less than the applicable ratio provided in the following table:
Fiscal Quarter Ending Applicable Ratio --------------------- ---------------- March 31, 2000 through September 30, 2000 7.5 to 1.0 December 31, 2000 through December 31, 2001 7.0 to 1.0. March 31, 2002 and thereafter 6.5 to 1.0 (a) Consolidated Funded Debt - Schedule 4 $____________ (b) Rental Obligations - Schedule - 6 $____________ (c) (b) times 8 $____________ 35 36 COMPLIANCE CHECKLIST CARMIKE CINEMAS, INC. ______________,____ (d) sum of (a) plus (c) $____________ (e) Adjusted Cash Flow - Schedule - 3 $____________ Actual Ratio of (d) to (e) ___ to 1.0 Maximum Ratio [7.5 to 1.0] [7.0 to 1.0] [6.5 to 1.0]
6. Negative Pledge (Section 5.08) None of the Borrower's or any Subsidiary's property is subject to any Lien securing Debt except for (i) Liens permitted by paragraph (a) through (e), and paragraph (l), of Section 5.08 of the Credit Agreement, (b) Liens not permitted by the aforementioned paragraphs of Section 5.08 (1) on fixed assets permitted under paragraph (l) securing Debt in an aggregate principal amount at any time outstanding not to exceed 5% of Consolidated Total Capitalization and (c) Liens not permitted by paragraphs (a) through (e) and paragraph (l) securing Debt in an aggregate principal amount at any time outstanding not to exceed 5% of Consolidated Total Capitalization: (a) Liens on fixed assets subject to paragraph (l): Description of Lien and Property subject to same: Amount of Debt Secured: 1. ______________________ $____________________ 2. ______________________ $____________________ 3. ______________________ $____________________ 4. ______________________ $____________________ 5. ______________________ $____________________ 6. ______________________ $____________________ 7. ______________________ $____________________ Total of items 1-7 $____________________ (b) Limitation (5% of Consolidated Total Capitalization) $____________________ (c) Liens on other assets subject to paragraph (m): 36 37 COMPLIANCE CHECKLIST CARMIKE CINEMAS, INC. ______________,____ Description of Lien and Property subject to same: Amount of Debt Secured: 1. ___________________________ $____________________ 2. ___________________________ $____________________ 3. ___________________________ $____________________ 4. ___________________________ $____________________ 5. ___________________________ $____________________ 6. ___________________________ $____________________ 7. ___________________________ $____________________ Total of items 1-7 $____________________ (d) Limitation (5% of Consolidated Total Capitalization) $____________________ 7. Sales of Assets (Section 5.11) The Borrower will not, nor will it permit any Subsidiary to, ... sell, lease or otherwise transfer all or any substantial part of its assets to, any other Person, or discontinue or eliminate any business line or segment, ... provided that the foregoing limitation on the sale, lease or other transfer of assets and on the discontinuation or elimination of a business line or segment shall not prohibit (i) the sale, lease or other transfer of assets by a Subsidiary to any other Subsidiary (other than of Collateral by Eastwynn) or to the Borrower, or (ii) subject to the mandatory prepayment provisions of Section 2.10(b), during any Fiscal Quarter, a transfer of assets in an arm's length transaction for fair market value or the discontinuance or elimination of a business line or segment (in a single transaction or in a series of related transactions) unless the aggregate assets to be so transferred or utilized in a business line or segment to be so discontinued, when combined with all other assets transferred, and all other assets utilized in all other business lines or segments discontinued, during such Fiscal Quarter and the immediately preceding three Fiscal Quarters (excluding, however, transfers of assets permitted by clause (i) of this Section) contributed more than 10% of Consolidated Operating Income during the 4 consecutive Fiscal Quarters immediately preceding such Fiscal Quarter, and (e) subject to the mandatory prepayment provisions of Section 2.10(b) and to presentation to the Administrative Agent and the Lenders of a certificate showing compliance with the limitations contained in this clause (e) after giving effect thereto, the Borrower may enter into sale/leaseback transactions after the Effective Date in an amount not to exceed in the aggregate $150,000,000, provided in each of the foregoing such cases no Default shall be in existence or be created thereby. At the request of the Borrower, the Collateral Agent shall release any Collateral sold by the Borrower or Eastwynn in conformity with the 37 38 COMPLIANCE CHECKLIST CARMIKE CINEMAS, INC. ______________,____ foregoing provisions, so long as any prepayments required by Section 2.10(b) have been made. (a) Aggregate Operating Income contributed by assets sold during Fiscal Quarter just ended(1) $____________ (b) Aggregate Operating Income contributed by assets sold during 3 prior Fiscal Quarters(1) $____________ (c) sum of (a) and (b) $____________ (d) Consolidated Operating Income during 4 Fiscal Quarters ending with Fiscal Quarter just ended $____________ (e) 10% of (d) $____________ Limitations: (c) may not exceed (e) 8. Investments (Section 5.21) Neither the Borrower nor any of its Subsidiaries shall make Investments in any Person except: (a) Investments in (i) direct obligations of the United States Government maturing within one year, (ii) certificates of deposit issued by a commercial bank whose credit is satisfactory to the Agent, (iii) commercial paper rated A1 or the equivalent thereof by S&P or P1 or the equivalent thereof by Moody's and in either case maturing within 6 months after the date of acquisition, (iv) tender bonds the payment of the principal of and interest on which is fully supported by a letter of credit issued by a United States bank whose long-term certificates of deposit are rated at least AA or the equivalent thereof by S&P and Aa or the equivalent thereof by Moody's, (v) loans or advances to employees not exceeding $1,000,000 in the aggregate principal amount outstanding at any time, in each case made in the ordinary course of business and consistent with practices existing on December 31, 1998, (vi) deposits required by government agencies or public utilities, and (vii) loans, advances or other Investments to or in Guarantors; and (b) other Investments which, in the aggregate since the Second Amendment Effective Date, do not exceed $10,000,000; provided, however, immediately after giving effect to the making of any Investment, no Default shall have occurred and be continuing. (a) loans and advances to employees $________________ Limitation $1,000,000 _____________ (1) Excluding transfers permitted by clause (i) 38 39 COMPLIANCE CHECKLIST CARMIKE CINEMAS, INC. ______________,____ (b) Aggregate Investments made pursuant to clause (b) from Second Amendment Effective Date and prior to most recent Fiscal Quarter $___________ (c) Investments made pursuant to clause (b) during most recent Fiscal Quarter $___________ (d) Sum of (b) and (c) $___________ Limitation: (d) may not exceed $10,000,000 9. Capital Expenditures (5.25) At the end of each Fiscal Year, commencing with the Fiscal Quarter ending December 31, 2000, Capital Expenditures for such Fiscal Year (excluding on-maintenance Capital Expenditures on theatres opened on or before December 31, 1999 which were contracted for on or before such date) shall not exceed (a) for the Fiscal Year ending December 31, 2000, $25,000,000 and (b) for each Fiscal Year thereafter, $35,000,000. (a) Capital Expenditures incurred during Fiscal Year to date $___________ (b) Tenant improvements included in (a) and actually reimbursed to date $___________ (c) Estimated amount of reimbursable tenant improvements included in (a) but not yet reimbursed $___________ (d) Non-maintenance Capital Expenditures on theatres opened on or before December 31, 1999 which were contracted for on or before such date $___________ (e) Sum of (a), less (b), less (c), less (d) $___________ Limitation: (e) may not exceed sum of $25,000,000 in Fiscal Year 2000 and $35,000,000 in any Fiscal Year thereafter 10. Report as to Net Cash Proceeds paid pursuant to Section 2.10. Following is the information pertaining to the sale of each property during the Fiscal Quarter just ended which sale gave rise to the receipt of Net Cash Proceeds. (a) Property: [insert description of property sold] (1) date of sale ________________ 39 40 COMPLIANCE CHECKLIST CARMIKE CINEMAS, INC. ______________,____ (2) gross proceeds received $___________ (3) Net Cash Proceeds received $___________ (4) aggregate amount of prepayment on Loans and Term Loans $___________ (b) Property: [insert description of property sold] (1) date of sale ________________ (2) gross proceeds received $___________ (3) Net Cash Proceeds received $___________ (4) aggregate amount of prepayment on Loans and Term Loans $___________ TOTALS: total gross proceeds received $___________ total Net Cash Proceeds received $___________ total aggregate prepayments made $___________ 40 41 COMPLIANCE CHECKLIST CARMIKE CINEMAS, INC. _______________,____ SCHEDULE - 1 CONSOLIDATED TOTAL CAPITALIZATION (a) Consolidated Net Worth $_______________________ (b) Consolidated Funded Debt $_______________________ (c) Consolidated Total Capitalization (sum of (a) plus (b)) $ ======================= 41 42 COMPLIANCE CHECKLIST CARMIKE CINEMAS, INC. ______________,_____ SCHEDULE - 2 FIXED CHARGES (a) Rental Obligations for: ____ quarter ____ _-__ $_____________ ____ quarter ____ _-__ $_____________ ____ quarter ____ _-__ $_____________ ____ quarter ____ _-__ $_____________ Total Rental Obligations $_____________ (b) Interest Expense for: ____ quarter ____ _-__ $_____________ ____ quarter ____ _-__ $_____________ ____ quarter ____ _-__ $_____________ ____ quarter ____ _-__ $_____________ Total Interest Expense $_____________ TOTAL FIXED CHARGES (sum of (a) plus (b)) $_____________ ADJUSTED FIXED CHARGES (c) Dividends for: ____ quarter ____ _-__ $_____________ ____ quarter ____ _-__ $_____________ ____ quarter ____ _-__ $_____________ 42 43 COMPLIANCE CHECKLIST CARMIKE CINEMAS, INC. _______________,____ ____ quarter ____ _-__ $_____________ Total Dividends $_____________ (d) Tax expense for: ____ quarter ____ _-__ $_____________ ____ quarter ____ _-__ $_____________ ____ quarter ____ _-__ $_____________ ____ quarter ____ _-__ $_____________ Total Tax Expense $_____________ (e) Principal payments(2) for: ____ quarter ____ _-__ $_____________ ____ quarter ____ _-__ $_____________ ____ quarter ____ _-__ $_____________ ____ quarter ____ _-__ $_____________ Total principal payments $_____________ TOTAL ADJUSTED FIXED CHARGES (sum of (a) plus (b) plus (c) plus (d) plus (d)) $_____________ - -------------- (2) Exclude principal payments on the Senior Notes 43 44 COMPLIANCE CHECKLIST CARMIKE CINEMAS, INC. _______________,____ SCHEDULE - 3 ADJUSTED CASH FLOW(3) (a) ____ quarter ____ $____________ Consolidated Operating Income $____________ Rental Obligations $____________ Depreciation and amortization $____________ Net income arising from sale, exchange or distribution of capital assets (not to exceed 5% of Consolidated Operating Income for such period) $____________ Theatre-Level EBITDA $____________ Total for Quarter $____________ (b) ____ quarter ____ $____________ Consolidated Operating Income $____________ Rental Obligations $____________ Depreciation and amortization $____________ Net income arising from sale, exchange or distribution of capital assets (not to exceed 5% of Consolidated Operating Income for such period) $____________ Theatre-Level EBITDA $____________ Total for Quarter $____________ (c) ____ quarter ____ $____________ Consolidated Operating Income $____________ Rental Obligations $____________ Depreciation and amortization $____________ Net income arising from sale, exchange or distribution of capital assets (not to exceed 5% of Consolidated Operating Income for such period) $____________ Theatre-Level EBITDA $____________ Total for Quarter $____________ (d) ____ quarter ____ $____________ - -------------- (3) In determining Adjusted Cash Flow, the expense incurred by the Borrower in complying with the provisions of Section 5.26 in granting and recording the Carmike Mortgages and obtaining the Real Estate Collateral Documentation shall be added back to Consolidated Operating Income. 44 45 COMPLIANCE CHECKLIST CARMIKE CINEMAS, INC. ______________,____ Consolidated Operating Income $____________ Rental Obligations $____________ Depreciation and amortization $____________ Net income arising from sale, exchange or distribution of capital assets (not to exceed 5% of Consolidated Operating Income for such period) $____________ Theatre-Level EBITDA $____________ Total for Quarter $____________ Total Adjusted Cash Flow $ (sum of (a) plus (b) plus (c) plus (d) ============ ---- ---- ----
45 46 COMPLIANCE CHECKLIST CARMIKE CINEMAS, INC. ______________,____ SCHEDULE - 4 CONSOLIDATED FUNDED DEBT
Interest (a) Funded Debt Rate Maturity Total ----------- --------- -------- ----- Secured ------- __________________________ _________ _________ $___________ __________________________ _________ _________ $___________ __________________________ _________ _________ $___________ __________________________ _________ _________ $___________ __________________________ _________ _________ $___________ __________________________ _________ _________ $___________ Total Secured $___________ Unsecured --------- __________________________ _________ _________ $___________ __________________________ _________ _________ $___________ __________________________ _________ _________ $___________ __________________________ _________ _________ $___________ Total Unsecured $___________ Guarantees ---------- ____________________________________________________________________ $___________ ____________________________________________________________________ $___________ Total $___________ Redeemable Preferred Stock $___________ -------------------------- Total $___________ Other Debt ---------- ____________________________________________________________________ $___________ ____________________________________________________________________ $___________ ____________________________________________________________________ $___________ Total Funded Debt $ =========== (b) Current Debt $___________ (c) Unescrowed Off-Balance Sheet Lease Indebtedness (to the extent not included in (a) or (b) $___________
46 47 COMPLIANCE CHECKLIST CARMIKE CINEMAS, INC. ______________,____ (d) Off-Balance Sheet Lease Equity Amounts (to the extent not included in (a) or (b) $____________ (e) Consolidated Funded Debt (a) plus (b) plus (c) plus (d) $ ---- ---- ---- ============ CONSOLIDATED SENIOR FUNDED DEBT (f) Subordinated Debt $___________ (g) Consolidated Senior Funded Debt (e) less (f) $___________
47 48 COMPLIANCE CHECKLIST CARMIKE CINEMAS, INC. ______________,____ SCHEDULE - 5 CONSOLIDATED CASH FLOW(4) (a) ____ quarter ____ $____________ Consolidated Operating Income $____________ Depreciation and amortization $____________ Off-Balance Sheet Lease Payments $____________ Net income arising from sale, exchange or distribution of capital assets (not to exceed 5% of Consolidated Operating Income for such period) $____________ Total for Quarter $____________ (b) ____ quarter ____ $____________ Consolidated Operating Income $____________ Depreciation and amortization $____________ Off-Balance Sheet Lease Payments $____________ Net income arising from sale, exchange or distribution of capital assets (not to exceed 5% of Consolidated Operating Income for such period) $____________ Total for Quarter $____________ (c) ____ quarter ____ $____________ Consolidated Operating Income $____________ Depreciation and amortization $____________ Off-Balance Sheet Lease Payments $____________ Net income arising from sale, exchange or distribution of capital assets (not to exceed 5% of Consolidated Operating Income for such period) $____________ Total for Quarter $____________ (d) ____ quarter ____ $____________
- --------------------------------- (4) In determining Cash Flow, the expense incurred by the Borrower in complying with the provisions of Section 5.26 in granting and recording the Carmike Mortgages and obtaining the Real Estate Collateral Documentation shall be added back to Consolidated Operating Income. 48 49 COMPLIANCE CHECKLIST CARMIKE CINEMAS, INC. ______________,____ Consolidated Operating Income $____________ Depreciation and amortization $____________ Off-Balance Sheet Lease Payments $____________ Net income arising from sale, exchange or distribution of capital assets (not to exceed 5% of Consolidated Operating Income for such period) $____________ Total for Quarter $____________ Consolidated Cash Flow $ (sum of (a) plus (b) plus (c) plus (d) ============ ---- ---- ----
49 50 COMPLIANCE CHECKLIST CARMIKE CINEMAS, INC. ______________,____ SCHEDULE - 6 RENTAL OBLIGATIONS(5) ____ quarter ____ $____________ ____ quarter ____ $____________ ____ quarter ____ $____________ ____ quarter ____ $____________ Total $____________
- --------------------------- (5) Rental Obligations shall not include Rental Obligations under the Lease and Rental Obligations under leases arising from sale/leaseback transactions of theatres shall be annualized on a proforma basis, as to any Operating Lease which has been in effect for less than 4 Fiscal Quarters. 50 EX-10.3 4 SECOND AMENDMENT TO AMEND. & RESTATED MASTER LEASE 1 EXHIBIT 10.3 SECOND AMENDMENT TO AMENDED AND RESTATED MASTER LEASE THIS SECOND AMENDMENT TO AMENDED AND RESTATED MASTER LEASE (this "Second Amendment") is dated as of March 31, 2000 between MOVIEPLEX REALTY LEASING, L.L.C. (the "Landlord") and Carmike Cinemas, Inc. (the "Tenant"); WITNESSETH: WHEREAS, the Landlord and the Tenant executed and delivered that certain Amended and Restated Master Lease, dated as of the 29th day of January, 1999, as amended by First Amendment to Amended and Restated Lease dated as of November 19, 1999 (as so amended, the "Lease"); WHEREAS, the Tenant has requested and the Landlord has agreed to certain amendments to the Lease, subject to the terms and conditions hereof; NOW, THEREFORE, for and in consideration of the above premises and other good and valuable consideration, the receipt and sufficiency of which hereby is acknowledged by the parties hereto, the Landlord and the Tenant hereby covenant and agree as follows: 1. Definitions. Unless otherwise specifically defined herein, each term used herein which is defined in the Lease shall have the meaning assigned to such term in the Lease. Each reference to "hereof", "hereunder", "herein" and "hereby" and each other similar reference and each reference to "this Agreement" and each other similar reference contained in the Lease shall from and after the date hereof refer to the Lease as amended hereby. 2. Amendment to Section 1.1. Amendments to Section 1.1. Section 1.1 of the Lease hereby is amended by deleting the definitions of "Adjusted Cash Flow", "Adjusted Fixed Charges", "Collateral", "Collateral Documents", "Consolidated Cash Flow", "Consolidated Net Income", "Equity Return Rate and "Permitted Encumbrances", and adding the following new definitions in appropriate alphabetical sequence: "Adjusted Cash Flow" means, for any period, Consolidated Operating Income for such period, plus, to the extent deducted in determining the amount thereof, (i) Rental Obligations (less any principal portion of any Off-Balance Sheet Lease), (ii) depreciation and amortization, and (iii) any aggregate net income during such period arising from the sale, exchange or other distribution of capital assets, provided that the total amount so included pursuant to this clause (iii) shall not exceed 5% of Consolidated Operating Income for such period, provided further, however, that, in calculating Adjusted Cash Flow for any such period, any acquisition or disposition of assets that shall have occurred during such period will be deemed to have occurred at the beginning of such period; and (iv) with respect to any Off-Balance Sheet Property which was acquired or ground-leased by any entity acting in the capacity of landlord (or in any functionally similar capacity to a landlord) under any Off-Balance Sheet Lease within the 12-month period ending on the 2 date of determination of Consolidated Cash Flow, Adjusted Cash Flow shall include Theatre-Level EBITDA for such Off-Balance Sheet Property and shall be determined with respect to such Off-Balance Sheet Property on the basis of actual Theatre-Level EBITDA within such period and projected Theatre-Level EBITDA for the remainder of such period (with such projections being based on the average Theatre-Level EBITDA of comparable theater properties of the Tenant which were operated during the entire 12-month period); provided, that in determining Adjusted Cash Flow, the expense incurred by the Tenant in complying with the provisions of Section 2.1(mm) in granting and recording the Carmike Mortgages and obtaining the Real Estate Collateral Documentation shall be added back to Consolidated Operating Income. "Adjusted Consolidated Funded Debt" means at any time the sum (without duplication) of: (i) Consolidated Funded Debt; plus (ii) the product of (x) Rental Obligations (excluding Rental Obligations under the Lease) for the 4 Fiscal Quarter period just ended (and Rental Obligations under leases arising from sale/leaseback transactions of theatres shall be annualized on a proforma basis, as to any Operating Lease which has been in effect for less than 4 Fiscal Quarters), times (y)8. "Capital Expenditures" means for any period the sum of all capital expenditures incurred during such period by the Tenant and its Consolidated Subsidiaries, as determined in accordance with GAAP, but excluding any Capital Expenditures consisting of tenant improvement expenses which are reimbursed or reimbursable to the Tenant or a Consolidated Subsidiary by the landlord. "Carmike Mortgage Properties Cash Flow" means, with respect to each Fee Property subject to a Carmike Mortgage and each Leasehold Mortgage Property, the portion of Fee and Leasehold Properties Cash Flow derived therefrom. "Carmike Mortgage Properties Cash Flow Coverage" means Carmike Mortgage Properties Cash Flow, as of the date of measurement, as determined by reference to the Carmike Mortgage Properties Cash Flow Coverage Report. Carmike Mortgage Properties Cash Flow Coverage Report means a report or an updated report, in form and substance reasonably satisfactory to the Collateral Agent, to be provided to the Landlord, the Agent, the Collateral Agent and the Secured Parties pursuant to Section 2.1(mm), reflecting the Carmike Mortgage Properties Cash Flow Coverage as of the date of such report or updated report. "Carmike Mortgage Properties Test Date" means November 1, 2000. "Carmike Mortgages" means, individually or collectively, as the context shall require, any mortgage, deed to secure debt, deed of trust or similar instrument appropriate for the relevant jurisdiction, in form and substance satisfactory to the Agent and the Collateral Agent pursuant to which the Tenant and EastWynn, respectively, grant a first priority, perfected Lien on all Fee Properties and all Leasehold Properties which become Leasehold Mortgages pursuant to Section 5.27, to the Collateral Agent, for the ratable benefit of the Secured Parties, to secure the Secured Obligations (or a designated portion 2 3 thereof), as contemplated in Section 5.27, as it may hereafter be amended or supplemented from time to time. "Collateral" means the property of the Tenant and EastWynn, respectively, in which the Collateral Agent, for the ratable benefit of the Secured Parties, is granted a security interest pursuant to the Security Agreement, the Pledge Agreement and the Carmike Mortgages, to secure the Secured Obligations, for the ratable benefit of the Secured Parties. "Collateral Documents" means the Intercreditor Agreement, the Pledge Agreement, the Security Agreement, the Carmike Mortgages, and such financing statements as the Collateral Agent may require to perfect its security interest in the Collateral. "Consolidated Cash Flow" means, for any period, the sum of Consolidated Operating Income of the Tenant, and its Subsidiaries, plus to the extent deducted in determining such Consolidated Operating Income (i) depreciation and amortization, and (ii) any aggregate net income during such period arising from the sale, exchange or other distribution of capital assets, provided, however, that the total amount so included pursuant to this clause (ii) shall not exceed 5% of Consolidated Operating Income for such period, provided further, however, that, in calculating Consolidated Cash Flow for any such period, any acquisition or disposition of assets that shall have occurred during such period will be deemed to have occurred at the beginning of such period; provided further, however, that (x) for purposes of determining the ratio of Consolidated Funded Debt to Consolidated Cash Flow and the ratio of Consolidated Senior Funded Debt to Consolidated Cash Flow, all Off-Balance Sheet Lease Payments made during the relevant period which has been deducted in computing Consolidated Net Income shall be added back in computing Consolidated Cash Flow, (y) with respect to any Off-Balance Sheet Property which was acquired or ground-leased by any entity acting in the capacity of landlord (or in any functionally similar capacity to a landlord) under any Off-Balance Sheet Lease within the 12-month period ending on the date of determination of Consolidated Cash Flow, Consolidated Cash Flow shall include Theatre-Level EBITDA for such Off-Balance Sheet Property and shall be determined with respect to such Off-Balance Sheet Property on the basis of actual Theatre-Level EBITDA within such period and projected Theatre-Level EBITDA for the remainder of such period (with such projections being based on the average Theatre-Level EBITDA of comparable theater properties of the Tenant which were operated during the entire 12-month period), and (z) the expense incurred by the Tenant in complying with the provisions of Section 2.1(mm) in granting and recording the Carmike Mortgages and obtaining the Real Estate Collateral Documentation shall be deducted from Consolidated Operating Income. "Consolidated Net Income" means for any period, the net income (or deficit) of the Tenant and its Subsidiaries for such period in question (taken as a cumulative whole) after deducting, without duplication, all operating expenses, provisions for all taxes and reserves (including reserves for deferred income taxes) and all other proper deductions, all determined in accordance with GAAP on a consolidated basis, after eliminating material inter-company items in accordance with GAAP and after deducting portions of 3 4 income properly attributable to outside minority interests, if any, in Subsidiaries; provided, however, that there shall be excluded (a) any income or deficit of any other Person accrued prior to the date it becomes a Subsidiary or merges into or consolidates with the Tenant or another Subsidiary, (b) the net income in excess of an amount equal to 5% of Consolidated Net Income for such period before giving effect to this clause (b) (or deficit) of any Person (other than a Subsidiary) in which the Tenant or any Subsidiary has any ownership interest, except to the extent that any such income has been actually received by the Tenant or such Subsidiary in the form of cash dividends or similar distributions, and provided that the resulting income is generated by lines of businesses substantially similar to those of the Tenant and its Subsidiaries taken as a whole during the fiscal year ended December 31, 1998, (c) any restoration to income of any contingency reserve, except to the extent that provision for such reserve was made out of income accrued during such period, (d) any deferred credit or amortization thereof from the acquisition of any properties or assets of any Person, (e) any aggregate net income (but not any aggregate net loss) during such period arising from the sale, exchange or other distribution of capital assets (such term to include all fixed assets, whether tangible or intangible, all inventory sold in conjunction with the disposition of fixed assets and all securities) to the extent the aggregate gains from such transactions exceed losses from such transactions, (f) any impact on the income statement resulting from any write-up of any assets after the Effective Date (as defined in the Credit Agreement), (g) any items properly classified as extraordinary in accordance with GAAP, (h) proceeds of life insurance policies to the extent such proceeds exceed premiums paid to maintain such life insurance policies, (i) any portion of the net income of a Subsidiary which is unavailable for the payment of dividends to the Tenant or a Subsidiary, (j) any gain arising from the acquisition of any debt securities for a cost less than principal and accrued interest, (k) in the case of a successor to the Tenant by permitted consolidation or merger or transfer of assets pursuant to Section 2.1(cc), any earnings, of such successor or transferee prior to the consolidation, merger or transfer of assets, (1) any earnings on any Investments of the Tenant or any Subsidiary except to the extent that such earnings are received by the Tenant or such Subsidiary as cash, provided that earnings which would otherwise be excluded from Consolidated Net Income pursuant to the preceding provisions of this clause (1) shall be included in Consolidated Net Income but only to the extent that such earnings are attributable to the net income of any Person (other than a Subsidiary) in which the Tenant or any Subsidiary has any ownership interest and such net income is not otherwise excluded from Consolidated Net Income by virtue of clause (b) of this definition and (m) the Restructuring and Impairment Charges for 1998, the Impairment Charges for 1999, and any Subsequent Restructuring and Impairment Charges up to but not exceeding an aggregate of $10,000,000 in any Fiscal Year (but with any portion of such $10,000,000 which is unused in any Fiscal Year being carried over to subsequent Fiscal Years). "Equity Return Rate" means a percentage rate of return per annum on the Landlord's Equity Amount, to be determined for each calendar quarter, equal to the greater of: 4 5 (A) The sum of (i) 3-month LIBOR; plus, (ii) the Letter of Credit Fee with respect to the Series B Bonds determined pursuant to Section 2.01(h)(iii) of the Reimbursement Agreement; plus, (iii) 5.50%; or (B) 12.00%, provided, however, that in the event that any Preferred Member of the Landlord shall have exercised the special rights provided in Section 11(d) of the Operating Agreement, but such rights shall not, for any reason, have been honored, the Equity Return Rate shall be increased thereafter to 200% of the rate determined herein. "Fee and Leasehold Properties Cash Flow" means, with respect to each Fee Property and each Leasehold Property, the operating income derived therefrom, without provision for any interest, taxes related to income, depreciation, amortization and corporate general and administrative expenses, for the Fiscal Year ending December 31, 1999, as determined by reference to the Fee and Leasehold Properties Cash Flow Report. "Fee and Leasehold Properties Cash Flow Report" means the report dated on or about the First Amendment Effective Date which is furnished to the Agent, the Collateral Agent, the LC Lenders and the Landlord pursuant to Section 2.1(mm) and which lists each of the Fee Properties and the Leasehold Properties and shows, for each such Property, the portion of Consolidated Cash Flow for the Fiscal Year ending December 31, 1999 which was produced by such Property. "Fee Properties" means all Properties consisting of real estate and improvements in which the Tenant or EastWynn owns fee simple title. "Impairment Charges for 1999" means asset impairment charges taken by the Tenant for the last Fiscal Quarter of its 1999 Fiscal Year in the amount of $33,037,122. "Leasehold Mortgage Properties" means all Leasehold Properties which have become subject to a Carmike Mortgage and as to which all Real Estate Collateral Documentation required by the Collateral Agent has been obtained pursuant to Section 2.1(mm). "Leasehold Properties" means all Properties consisting of real estate and improvements in which the Tenant or EastWynn has a leasehold interest, excluding real estate and improvements which are subject to and leased pursuant to the Lease. "Permitted Encumbrance" means, (i) with respect to each Supplemental Property, only those liens, easements building lines, restrictions, security interests and other matters accepted or approved by the Landlord and the Agent in writing and (ii) with respect to any Fee Property or Leasehold Property which is subject to a Carmike Mortgage, the encumbrances permitted by the Collateral Agent in its reasonable judgment (but not including any Lien on interests of the Tenant or a Guarantor thereon consisting of a mortgage, deed to secure debt, deed of trust or security agreement) as specified in such Carmike Mortgage. 5 6 "Real Estate Collateral Documentation" means the instruments, documents and agreements executed and/or delivered by the Tenant or EastWynn to the Collateral Agent (if applicable) pursuant to Section 2.1(mm) in connection with each Carmike Mortgage in order to convey to the Collateral Agent (or a trustee for the benefit of the Collateral Agent, as applicable in the relevant jurisdiction) for the ratable benefit of the Secured Parties a first priority Lien (subject to Permitted Encumbrances) on the right, title and interest of the Tenant or EastWynn in the Fee Property or Leasehold Property described therein, and other rights ancillary thereto, all in form and substance reasonably satisfactory to the Collateral Agent, after consultation with the Tenant or EastWynn, as applicable. The Real Estate Collateral Documentation may include, without limitation, the following as to each Fee Property or Leasehold Property: (i) an owner's/lessee's affidavit for each parcel or tract of such Fee Property or Leasehold Property; (ii) mortgagee title insurance binders and policies for each tract or parcel of such Fee Property or Leasehold Property; (iii) such landlord consents with respect to the Leasehold Properties as the Collateral Agent may reasonably require from any Third Parties with respect to any portion of such Leasehold Property; (iv) for each Fee Property and Leasehold Property, a copy of any existing survey of each parcel or tract of such Fee Property or Leasehold Property; provided, that if no existing survey exists, the Collateral Agent shall be furnished a current survey showing metes-and-bounds only, and upon request of the Collateral Agent during the existence of an Event of Default, the Collateral Agent shall be furnished a current "as-built" survey; (v) a certificate as to the insurance required by the related Carmike Mortgage; (vi) upon request of the Collateral Agent during the existence of an Event of Default, the Collateral Agent shall be furnished a report of a licensed engineer detailing an environmental inspection of such Fee Property or Leasehold Property; and (vii) an indemnification agreement regarding hazardous materials for such Fee Property or Leasehold Property. "Second Amendment Effective Date" means March 31, 2000. "Subsequent Restructuring and Impairment Charges" means any non-cash restructuring charges taken with respect to any impaired assets and any asset impairment charges taken by the Tenant during any Fiscal Year following its 1999 Fiscal Year. 6 7 3. Amendment to Section 2.1(s)(iii). Section 2.1(s)(iii) of the Lease hereby is amended by deleting it in its entirety and by substituting therefor the following: (iii) simultaneously with the delivery of each set of financial statements referred to in clauses (i) and (ii) above, a certificate, substantially in the form of Exhibit M or in such other form as shall be mutually satisfactory to the Tenant, the Landlord and the Agent (a "Compliance Certificate"), of the chief financial officer or the chief executive officer of the Tenant (A) setting forth in reasonable detail the calculations required to establish whether the Tenant was in compliance with the requirements of Sections 2.1(u) through 2.1(z), inclusive, 2.1(cc), 2.1(gg) and 2.1(ll) on the date of such financial statements and (B) stating whether any Default exists on the date of such certificate and, if any Default then exists, setting forth the details thereof and the action which the Tenant is taking or proposes to take with respect thereto. 4. Amendment to Sections 2.1(x) and (xi) and new Sections 2.1(xi) and (xii). The word "and" at the end of Section 2.1(x) is deleted, Section 2.1(xi) is relettered as Section 2.1(xiii), and new Sections 2.1(xi) and (xii) are added, as follows: 1. (xi) within 30 days after the end of each Fiscal Year, a budget for the next Fiscal Year, including a detailed statement of cash flow, balance sheet and income statement, on a consolidated basis for the Tenant and its Subsidiaries; and 2. (l) within 30 days after the end of each Fiscal Quarter, a report concerning theatre operations showing (a) gross attendance, (b) gross concession revenue and (c) gross ticket revenue for the Fiscal Quarter just ended; and 5. Amendment to Section 2.1(u). Section 2.1(u) of the Lease hereby is amended by deleting it in its entirety and by substituting therefor the following: (u) Ratio of Consolidated Senior Funded Debt to Consolidated Cash Flow. At the end of each Fiscal Quarter, commencing with the Fiscal Quarter ending March 31, 2000, the ratio of Consolidated Senior Funded Debt to Consolidated Cash Flow for the period of 4 consecutive Fiscal Quarters ending on such date shall not be greater than the applicable ratio provided in the following table:
Fiscal Quarter Ending Applicable Ratio --------------------- ---------------- On or before September 30, 2000 4.25 to 1.0 December 31, 2000 through 3.75 to 1.0 September 30, 2001 December 31, 2001 through 3.50 to 1.0 September 30, 2002 December 31, 2002 and 3.00 to 1.0. thereafter
6. Amendment to Section 2.1(v). Section 2.1(v) of the Lease hereby is amended by deleting it in its entirety and by substituting therefor the following: 7 8 (v) Ratio of Consolidated Funded Debt to Consolidated Cash Flow. At the end of each Fiscal Quarter ending as provided in the following table, the ratio of Consolidated Funded Debt at the end of such Fiscal Quarter to Consolidated Cash Flow for the period of 4 consecutive Fiscal Quarters ending on such date shall not be greater than the applicable ratio provided in the following table:
Fiscal Quarter Ending Applicable Ratio --------------------- ---------------- On or before September 30, 2000 6.50 to 1.0 December 31, 2000 through 5.75 to 1.0 September 30, 2001 December 31, 2001 through 5.50 to 1.0 September 30, 2002 December 31, 2002 and 5.00 to 1.0. thereafter
7. Amendment to Section 2.1(x). Section 2.1(x) of the Lease hereby is amended by deleting it in its entirety and by substituting therefor the following: (x) Fixed Charge Coverage. At the end of each Fiscal Quarter, commencing with the Fiscal Quarter ending March 31, 2000, the ratio of (a) Adjusted Cash Flow to (b) Fixed Charges, in each case for the current Fiscal Quarter and the immediately preceding 3 Fiscal Quarters, shall not be less than the applicable ratio provided in the following table:
Fiscal Quarter Ending Applicable Ratio --------------------- ---------------- On or before September 30, 2001 1.25 to 1.0 December 31, 2001 and 1.40 to 1.0. thereafter
8. Amendment to Section 2.1(y). Section 2.1(y) of the Lease hereby is amended by deleting it in its entirety and by substituting therefor the following: (y) Ratio of Adjusted Consolidated Funded Debt to Adjusted Cash Flow. At the end of each Fiscal Quarter, commencing with the Fiscal Quarter ending March 31, 2000, the ratio of (a) Adjusted Consolidated Funded Debt to (b) Adjusted Cash Flow, in each case for the current Fiscal Quarter and the immediately preceding 3 Fiscal Quarters, shall not be less than the applicable ratio provided in the following table:
Fiscal Quarter Ending Applicable Ratio --------------------- ---------------- March 31, 2000 through 7.5 to 1.0 September 30, 2000 December 31, 2000 through 7.0 to 1.0. December 31, 2001 March 31, 2002 and 6.5 to 1.0 thereafter
8 9 9. Amendment to Section 2.1(gg). Section 2.1(gg) of the Credit Agreement hereby is amended by deleting it in its entirety and by substituting therefor the following (gg) Investments. Neither the Tenant nor any of its Subsidiaries shall make Investments in any Person except: (a) Investments in (i) direct obligations of the United States Government maturing within one year, (ii) certificates of deposit issued by a commercial bank whose credit is satisfactory to the Agent, (iii) commercial paper rated A1 or the equivalent thereof by S&P or P1 or the equivalent thereof by Moody's and in either case maturing within 6 months after the date of acquisition, (iv) tender bonds the payment of the principal of and interest on which is fully supported by a letter of credit issued by a United States bank whose long-term certificates of deposit are rated at least AA or the equivalent thereof by S&P and Aa or the equivalent thereof by Moody's, (v) loans or advances to employees not exceeding $1,000,000 in the aggregate principal amount outstanding at any time, in each case made in the ordinary course of business and consistent with practices existing on December 31, 1998, (vi) deposits required by government agencies or public utilities, and (vii) loans, advances or other Investments to or in Guarantors; and (b) other Investments which, in the aggregate since the Second Amendment Effective Date, do not exceed $10,000,000; provided, however, immediately after giving effect to the making of any Investment, no Default shall have occurred and be continuing. 10. New Section 2.1(ll). A new Section 2.1(ll) hereby is added to the Lease, as follows: (ll) Capital Expenditures. At the end of each Fiscal Year, commencing with the Fiscal Quarter ending December 31, 2000, Capital Expenditures for such Fiscal Year (excluding non-maintenance Capital Expenditures on theatres opened on or before December 31, 1999 which were contracted for on or before such date) shall not exceed (a) for the Fiscal Year ending December 31, 2000, $25,000,000 and (b) for each Fiscal Year thereafter, $35,000,000. 11. New Section 2.1(mm). A new Section 2.1(mm) hereby is added to the Credit Agreement, as follows: 1. Section 2.1(mm) Carmike Mortgages; Pricing Adjustments. On or within 10 days after the Second Amendment Effective Date, the Tenant shall deliver to the Landlord, the Agent, the Collateral Agent and the Secured Parties the Fee and Leasehold Properties Cash Flow Report. Prior to the Carmike Mortgage Properties Test Date, the Tenant shall (i) for each Fee Property and each Leasehold Property as to which no Third Party consent is required, execute and deliver to the Collateral Agent a Carmike Mortgage and the related Real Estate Collateral Documentation reasonably requested by the Collateral Agent with respect thereto, and (ii) for each Leasehold Property as to which a Third Party consent is required, use its best efforts to obtain such Third Party consent, and upon obtaining such consent, execute and deliver to the Collateral Agent a Carmike Mortgage and the related Real Estate Collateral Documentation reasonably requested by the Collateral Agent with respect thereto. After the Carmike Mortgage Properties Test Date, the Tenant shall continue to use its best efforts to obtain such Third Party consents 9 10 not previously obtained, and upon obtaining such consent, execute and deliver to the Collateral Agent a Carmike Mortgage and the related Real Estate Collateral Documentation reasonably requested by the Collateral Agent with respect thereto. On the Carmike Mortgage Properties Test Date, the Tenant shall provide to the Agent, the Collateral Agent and the Secured Parties the initial Carmike Mortgage Properties Cash Flow Coverage Report, reflecting the Carmike Mortgage Properties Cash Flow Coverage as of the Carmike Mortgage Properties Test Date (or a date within 5 Domestic Business Days prior thereto). After the Carmike Mortgage Properties Test Date, the Tenant may provide to the Agent, the Collateral Agent and the Secured Parties at any time, and shall provide to the Agent, the Collateral Agent and the Secured Parties upon the Agent's request, an update of the Carmike Mortgage Properties Cash Flow Coverage Report, reflecting the Carmike Mortgage Properties Cash Flow Coverage as of such updated report. On or before 60 days after the Second Amendment Effective Date, the Intercreditor Agreement shall be amended as appropriate to include within its scope the Carmike Mortgages and the Fee Properties and Leasehold Mortgage Properties subject thereto. Supplemental Rent shall be adjusted from time to time as necessary to enable the Landlord to pay any increase in Letter of Credit Fees or interest payable by the Landlord as required by the last sentence of Section 2.03(a) of the Reimbursement Agreement, based on the Carmike Mortgage Properties Cash Flow Coverage as reflected in the Carmike Mortgage Properties Cash Flow Coverage Report, as updated from time to time pursuant to the foregoing. 12. Amendment to Section 15.2(b). Section 15.2(b) of the Lease hereby is amended by deleting it in its entirety and by substituting therefor the following: 1. (b) The term "Fair Market Value" shall mean, with respect to the Leased Property, the greater of (i) one hundred (110%) percent of the amount estimated by an MAI appraiser reasonably acceptable to the Landlord and the Tenant, such estimation to be made prior to but confirmed by the New Appraisals, to be the fair market value of the Leased Property on and as of the Expiration Date and (ii) the Unamortized Total Project Cost. 13. Amendment to Section 15.4(b). Section 15.4(b) of the Lease hereby is amended by deleting it in its entirety and by substituting therefor the following: (b) The purchase price payable by the Tenant for any Subperforming Theater Property shall be the greater of (i) the unamortized Allocable Costs attributed to such Subperforming Theater Property and (ii) 110% of the fair market value of such Subperforming Theater Property as of the date of such purchase, as such fair market value shall be determined by an appraisal (dated not earlier than 120 days prior to such purchase date) prepared and certified by an independent MAI appraiser acceptable to the Landlord and the Agent and submitted to the Landlord and the Agent together with the notice referred to in Section 15.4(a) above. 14. Amendment to Section 15.7. Section 15.7 of the Lease hereby is amended by deleting it in its entirety and by substituting therefor the following: 10 11 Section 15.7 Special Right of Termination and Purchase. In the event that during the term of this Lease: (a) GAAP should require (i) the reclassification of this Lease as a Capital Lease, or (ii) a consolidation of accounts of the Landlord with those of the Tenant; or (b) the Code or other applicable U.S. income tax laws and regulations should require that the Tenant be regarded as the owner of the Individual Properties for purposes thereof, the Tenant shall have the option, exercisable upon 180 days prior written notice to the Landlord and the Agent, to terminate this Lease. Such option may be exercised only in conjunction with a simultaneous offer in writing to purchase for cash all, but not less than all, of the Individual Properties at the greater of (i) a Purchase Price equal to 110% of their aggregate fair market value, as determined by a qualified MAI appraiser selected jointly by the Landlord and Tenant and approved by the Agent; or (ii) the sum of the (a) aggregate principal amount of Bonds outstanding (other than Pledged Bonds), plus (b) an amount equal to the aggregate principal amount outstanding on the Reimbursement Notes and all accrued and unpaid interest thereon, plus (c) the balance of the Preferred Member's Unrecovered Capital Account, plus (d) any capital contributions of the Common Members to the Landlord, with a cumulative return thereon at a rate of return, adjusted quarterly, equal to the sum of (i) 3-month LIBOR; plus (ii) the letter of credit fee payable pursuant to Section 201(h)(iii) of the Reimbursement Agreement; plus (iii) .50% per annum, plus (e) without duplication of the foregoing, all accrued and unpaid Supplemental Rent and Basic Rent, and all other amounts then owed by the Tenant under this Lease. 15. Amendment to Section 17.1(b). Section 17.1(b) of the Lease hereby is amended by deleting it in its entirety and by substituting therefor the following: (b) Breach by the Tenant of any of the covenants contained in Sections 2.1(s)(v), 2.1(s)(x), 2.1(t)(iii), 2.1(u) to 2.1(y), inclusive, 2.1(aa) (as to the Tenant), 2.1(bb) (as to the Tenant), 2.1(cc), 2.1(ee), 2.1(gg), or 2.1(ii) to 2.1(kk), inclusive, 2.1(ll), 4.3 or the first sentence of Section 22.1(a); or 16. Exhibit M. Exhibit M (Compliance Certificate) hereby is deleted in its entirety and Exhibit M hereto is substituted therefor. 17. Release of Supplemental Properties. The Tenant has requested the conveyance to it or its designee and the release from the Lease, of the Supplemental Properties located in Dougherty County, Georgia and Rutherford County, Tennessee, and the Landlord hereby agrees to such conveyance, at no cost to the Tenant, except that (i) there shall be no reduction in the amount of Basic Rent payable under the Lease on each Basic Rent Payment Date as a result of such conveyance and release and (ii) the Tenant shall pay Supplemental Rent in such amount as is necessary to reimburse all costs and expenses incurred by the Landlord or the Agent in connection therewith. Such conveyance shall represent an in-kind reimbursement of excess 11 12 development costs incurred by the Tenant under the Agency and Development Agreement In furtherance of the foregoing, the Landlord and the Agent, as applicable, shall execute and deliver to the Tenant: (1) as to the Dougherty County, Georgia Supplemental Property, (a) the Termination of Lease Supplement No. 4 in substantially the form attached hereto as Annex 1, (b) the Quit-Claim Deed for Release of Security Deed and Assignment of Rents in substantially the form attached hereto as Annex 2, (c) the Limited Warranty Deed in substantially the form attached hereto as Annex 3, (d) a UCC-3 termination statement with respect to UCC-1 financing statement filed in Dougherty County, Georgia on September 9, 1998, file number 47933566; and (e) the Termination of UCC-2 Notice Filing in substantially the form of Annex 4 hereto and (2) as to the Rutherford County, Tennessee, Supplemental Property, (a) the Termination of Lease Supplement No. 6 in substantially the form attached hereto as Annex 5, (b) the Release of Deed of Trust and Termination of Assignment in substantially the form attached hereto as Annex 6, (c) the Limited Warranty Deed in substantially the form attached hereto as Annex 7 and (d) UCC-3 termination statements with respect to UCC-1 financing statements filed in Rutherford County, Tennessee on January 15, 1999, Book B-447, Page 312 and in the Office of the Secretary of State of Tennessee on February 11, 1999, file number 993006230. Thereafter, such properties shall no longer be Supplemental Properties or Individual Properties under the Lease and shall no longer be subject to the Lease or the other Transaction Documents. 18. Effect of Amendment. Except as set forth expressly hereinabove, all terms of the Lease and the other Transaction Documents to which the Tenant is a party shall be and remain in full force and effect, and shall constitute the legal, valid, binding and enforceable obligations of the Tenant. The amendments contained herein shall be deemed to have both retrospective and prospective application, unless otherwise specifically stated herein. 19. Ratification. The Tenant hereby restates, ratifies and reaffirms each and every term, covenant and condition set forth in the Lease and the other Transaction Documents to which the Tenant is a party effective as of the date hereof. 20. Counterparts. This Second Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, and transmitted by facsimile to the other parties, each of which when so executed and delivered by facsimile shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the same instrument. 21. Section References. Section titles and references used in this Second Amendment shall be without substantive meaning or content of any kind whatsoever and are not a part of the agreements among the parties hereto evidenced hereby. 22. No Default. To induce the Landlord to enter into this Second Amendment, the Tenant hereby acknowledges and agrees that, as of the date hereof, and after giving effect to the terms hereof, there exists (i) no Default or Event of Default and (ii) no right of offset, defense, counterclaim, claim or objection in favor of the Tenant arising out of or with respect to any of the Rent or other obligations of the Tenant owed to the Landlord under the Lease. 12 13 23. Further Assurances. The Tenant agrees to take such further actions as the Landlord shall reasonably request in connection herewith to evidence the amendments herein contained to the Landlord. 24. Governing Law. This Second Amendment shall be governed by and construed and interpreted in accordance with, the laws of the State of New York. 25. Conditions Precedent. This Second Amendment shall become effective only upon execution and delivery (including by facsimile) of (i) this Second Amendment by the Landlord and the Tenant, (ii) the Second Amendment to and Consent under Reimbursement Agreement of even date herewith by the Landlord, the Agent and the Banks, (iii) the consent of the Trustee at the end hereof, and (iv) the Consent and Reaffirmation of Guarantors at the end of such Consent under Reimbursement Agreement by each of the Guarantors. 13 14 IN WITNESS WHEREOF, each of the Landlord and the Tenant has caused this Second Amendment to be duly executed, under seal, by its duly authorized officer as of the day and year first above written. WITNESS: LANDLORD: MOVIEPLEX REALTY LEASING, L.L.C. By: RANDOLPH, HUDSON & CO., INC., Manager By: - -------------------------- ---------------------------------- Name: Roger J. Burns Title: Vice President TENANT: ATTEST: CARMIKE CINEMAS, INC. By: - -------------------------- ---------------------------------- Name: Title: 14 15 PURSUANT TO SECTION 9.06 OF THE INDENTURE, AS DEFINED IN THE LEASE DESCRIBED IN THE FOREGOING SECOND AMENDMENT TO AMENDED AND RESTATED MASTER LEASE, FIRST UNION NATIONAL BANK, NOT IN ITS INDIVIDUAL CAPACITY, BUT IN ITS CAPACITY AS TRUSTEE THEREUNDER HEREBY CONSENTS TO THE EXECUTION AND DELIVERY OF THE FOREGOING SECOND AMENDMENT TO AMENDED AND RESTATED MASTER LEASE AND THE EXECUTION AND DELIVERY OF THE DOCUMENTS DESCRIBED IN SECTION 17 THEREOF. FIRST UNION NATIONAL BANK, Not In Its Individual Capacity, But In Its Capacity As Trustee Under the Indenture referred to above. By: ------------------------ Title: 15 16 EXHIBIT M FORM OF COMPLIANCE CERTIFICATE Reference is made to the Amended and Restated Master Lease Agreement dated as of January 29, 1999, as modified and supplemented and in effect from time to time, the "Lease") between MoviePlex Realty Leasing, L.L.C., as the Landlord, and Carmike Cinemas, Inc., as the Tenant. Capitalized terms used herein shall have the meanings ascribed thereto in the Lease. Pursuant to Section 2.1(s)(iii) of the Lease, ______________________, the duly authorized ____________________, of Carmike Cinemas, Inc., hereby certifies to the Landlord and the Agent that the information contained in the Compliance Check List attached hereto is true, accurate and complete as of ______________, ___, and that no Default is in existence on and as of the date hereof. CARMIKE CINEMAS, INC. By: ----------------------------------- Title: 16 17 COMPLIANCE CHECKLIST CARMIKE CINEMAS, INC. ---------------, ------- 1. Ratio of Consolidated Senior Funded Debt to Consolidated Total Cash Flow (Section 2.1(u)) At the end of each Fiscal Quarter, commencing with the Fiscal Quarter ending March 31, 2000, the ratio of Consolidated Senior Funded Debt to Consolidated Cash Flow for the period of 4 consecutive Fiscal Quarters ending on such date shall not be greater than the applicable ratio provided in the following table:
Fiscal Quarter Ending Applicable Ratio --------------------- ---------------- On or before September 30, 2000 4.25 to 1.0 December 31, 2000 through 3.75 to 1.0 September 30, 2001 December 31, 2001 through 3.50 to 1.0 September 30, 2002 December 31, 2002 and 3.00 to 1.0 thereafter
(a) Consolidated Senior Funded Debt Schedule - 4 $____________ (b) Consolidated Cash Flow Schedule - 5 $____________ Actual Ratio of (a) to (b) _____________ Maximum Ratio [4.25 to 1.0] [3.75 to 1.0] [3.50 to 1.0] [3.00 to 1.0]
2. Ratio of Consolidated Funded Debt to Consolidated Cash Flow (Section 2.1(v)) At the end of each Fiscal Quarter ending as provided in the following table, the ratio of Consolidated Funded Debt at the end of such Fiscal Quarter to Consolidated Cash Flow for the period of 4 consecutive Fiscal Quarters ending on such date shall not be greater than the applicable ratio provided in the following table:
Fiscal Quarter Ending Applicable Ratio --------------------- ---------------- On or before September 30, 2000 6.50 to 1.0 December 31, 2000 through September 30, 2001 5.75 to 1.0 December 31, 2001 through September 30, 2002 5.50 to 1.0 December 31, 2002 and thereafter 5.00 to 1.0
17 18 COMPLIANCE CHECKLIST CARMIKE CINEMAS, INC. ---------------, ------- (a) Consolidated Funded Debt Schedule - 4 $____________ (b) Consolidated Cash Flow Schedule - 5 $____________ Actual Ratio of (a) to (b) ____ to 1.00 Maximum Ratio [6.50 to 1.00] [5.75 to 1.0] [5.50 to 1.00] [5.00 to 1.00]
3. Restricted Payments (Section 2.1(w)) The Tenant will not declare or make any, or permit any Subsidiary which is not a Wholly-Owned Subsidiary to make any, Restricted Payment after the Effective Date, if the aggregate amount of such Restricted Payments made in any consecutive 4 Fiscal Quarter period would exceed $4,000,000; provided that after giving effect to the payment of any such Restricted Payments, no Default shall be in existence or be created thereby. (a) Total Restricted Payments made after the Effective Date and during the 3 Fiscal Quarters prior to most recent Fiscal Quarter $____________ (b) Restricted Payment during most recent Fiscal Quarter $____________ (c) sum of (a) and (b) $____________ Limitation (c) may not exceed $4,000,000
4. Fixed Charge Coverage (Section 2.1(x)) At the end of each Fiscal Quarter, commencing with the Fiscal Quarter ending March 31, 2000, the ratio of (a) Adjusted Cash Flow to (b) Fixed Charges, in each case for the current Fiscal Quarter and the immediately preceding 3 Fiscal Quarters, shall not be less than the applicable ratio provided in the following table: 18 19 COMPLIANCE CHECKLIST CARMIKE CINEMAS, INC. ---------------, -------
Fiscal Quarter Ending Applicable Ratio --------------------- ---------------- On or before September 30, 2001 1.25 to 1.0 December 31, 2001 and thereafter 1.40 to 1.0 (a) Adjusted Cash Flow - Schedule - 3 $____________ (b) Fixed Charges - Schedule - 2 $____________ Actual Ratio of (a) to (b) _____________ Maximum Ratio [1.35 to 1.00] [1.40 to 1.00]
5. Ratio of Adjusted Consolidated Funded Debt to Adjusted Cash Flow (Section 2.1(y) At the end of each Fiscal Quarter, commencing with the Fiscal Quarter ending March 31, 2000, the ratio of (a) Adjusted Consolidated Funded Debt to (b) Adjusted Cash Flow, in each case for the current Fiscal Quarter and the immediately preceding 3 Fiscal Quarters, shall not be less than the applicable ratio provided in the following table:
Fiscal Quarter Ending Applicable Ratio --------------------- ---------------- March 31, 2000 through September 30, 2000 7.5 to 1.0 December 31, 2000 through December 31, 2001 7.0 to 1.0. March 31, 2002 and thereafter 6.5 to 1.0 (a) Consolidated Funded Debt - Schedule 4 $____________ (b) Rental Obligations - Schedule - 6 $____________ (c) (b) times 8 $____________ (d) sum of (a) plus (c) $____________ (e) Adjusted Cash Flow - Schedule - 3 $____________ Actual Ratio of (d) to (e) ___ to 1.0
19 20 COMPLIANCE CHECKLIST CARMIKE CINEMAS, INC. ---------------, ------- Maximum Ratio [7.5 to 1.0] [7.0 to 1.0] [6.5 to 1.0]
6. Negative Pledge (Section 2.1(z)) None of the Tenant's or any Subsidiary's property is subject to any Lien securing Debt except for (i) Liens permitted by paragraph (a) through (e), and paragraph (l), of Section 5.08 of the Credit Agreement, (b) Liens not permitted by the aforementioned paragraphs of Section 5.08 (1) on fixed assets permitted under paragraph (l) securing Debt in an aggregate principal amount at any time outstanding not to exceed 5% of Consolidated Total Capitalization and (c) Liens not permitted by paragraphs (a) through (e) and paragraph (l) securing Debt in an aggregate principal amount at any time outstanding not to exceed 5% of Consolidated Total Capitalization: (a) Liens on fixed assets subject to paragraph (l): Description of Lien and Property subject to same: Amount of Debt Secured: 1. _____________________________________ $____________________ 2. _____________________________________ $____________________ 3. _____________________________________ $____________________ 4. _____________________________________ $____________________ 5. _____________________________________ $____________________ 6. _____________________________________ $____________________ 7. _____________________________________ $____________________ Total of items 1-7 $____________________ (b) Limitation (5% of Consolidated Total Capitalization) $____________________ (c) Liens on other assets subject to paragraph (m): Description of Lien and Property subject to same: Amount of Debt Secured: 1. _____________________________________ $____________________ 2. _____________________________________ $____________________ 3. _____________________________________ $____________________
20 21 COMPLIANCE CHECKLIST CARMIKE CINEMAS, INC. ---------------, ------- 4. _____________________________________ $____________________ 5. _____________________________________ $____________________ 6. _____________________________________ $____________________ 7. _____________________________________ $____________________ Total of items 1-7 $____________________ (d) Limitation (5% of Consolidated Total Capitalization) $____________________
7. Sales of Assets (Section 2.1(cc)) The Tenant will not, nor will it permit any Subsidiary to, ... sell, lease or otherwise transfer all or any substantial part of its assets to, any other Person, or discontinue or eliminate any business line or segment, ... provided that the foregoing limitation on the sale, lease or other transfer of assets and on the discontinuation or elimination of a business line or segment shall not prohibit (i) the sale, lease or other transfer of assets by a Subsidiary to any other Subsidiary (other than of Collateral by Eastwynn) or to the Tenant, or (ii) subject to the mandatory prepayment provisions of Section 2.10(b) of the Credit Agreement and any comparable provision of the Term Loan Credit Agreement, during any Fiscal Quarter, a transfer of assets in an arm's length transaction for fair market value or the discontinuance or elimination of a business line or segment (in a single transaction or in a series of related transactions) unless the aggregate assets to be so transferred or utilized in a business line or segment to be so discontinued, when combined with all other assets transferred, and all other assets utilized in all other business lines or segments discontinued, during such Fiscal Quarter and the immediately preceding three Fiscal Quarters (excluding, however, transfers of assets permitted by clause (i) of this Section) contributed more than 10% of Consolidated Operating Income during the 4 consecutive Fiscal Quarters immediately preceding such Fiscal Quarter, and (e) subject to the mandatory prepayment provisions of Section 2.10(b) of the Credit Agreement and any comparable provision of the Term Loan Credit Agreement and to presentation to the Agent and the Banks of a certificate showing compliance with the limitations contained in this clause (e) after giving effect thereto, the Tenant may enter into sale/leaseback transactions after the Effective Date in an amount not to exceed in the aggregate $150,000,000, provided in each of the foregoing such cases no Default shall be in existence or be created thereby. At the request of the Tenant, the Collateral Agent shall release any Collateral sold by the Tenant or Eastwynn in conformity with the foregoing provisions, so long as any prepayments required by Section 2.10(b) of the Credit Agreement and any comparable provision of the Term Loan Credit Agreement have been made. 21 22 COMPLIANCE CHECKLIST CARMIKE CINEMAS, INC. ---------------, ------- (a) Aggregate Operating Income contributed by assets sold during Fiscal Quarter just ended(1) $________________ (b) Aggregate Operating Income contributed by assets sold during 3 prior Fiscal Quarters(1) $________________ (c) sum of (a) and (b) $________________ (d) Consolidated Operating Income during 4 Fiscal Quarters ending with Fiscal Quarter just ended $________________ (e) 10% of (d) $________________
Limitations: (c) may not exceed (e) 8. Investments (Section 2.1(gg)) Neither the Tenant nor any of its Subsidiaries shall make Investments in any Person except: (a) Investments in (i) direct obligations of the United States Government maturing within one year, (ii) certificates of deposit issued by a commercial bank whose credit is satisfactory to the Agent, (iii) commercial paper rated A1 or the equivalent thereof by S&P or P1 or the equivalent thereof by Moody's and in either case maturing within 6 months after the date of acquisition, (iv) tender bonds the payment of the principal of and interest on which is fully supported by a letter of credit issued by a United States bank whose long-term certificates of deposit are rated at least AA or the equivalent thereof by S&P and Aa or the equivalent thereof by Moody's, (v) loans or advances to employees not exceeding $1,000,000 in the aggregate principal amount outstanding at any time, in each case made in the ordinary course of business and consistent with practices existing on December 31, 1998, (vi) deposits required by government agencies or public utilities, and (vii) loans, advances or other Investments to or in Guarantors; and (b) other Investments which, in the aggregate since the Second Amendment Effective Date, do not exceed $10,000,000; provided, however, immediately after giving effect to the making of any Investment, no Default shall have occurred and be continuing. (a) loans and advances to employees $________________ Limitation $1,000,000 (b) Aggregate Investments made pursuant to clause (b) from Second Amendment Effective Date and prior to most recent Fiscal Quarter $________________
- --------------------------- (1) Excluding transfers permitted by clause (i) 22 23 COMPLIANCE CHECKLIST CARMIKE CINEMAS, INC. ---------------, ------- (c) Investments made pursuant to clause (b) during most recent Fiscal Quarter $________________ (d) Sum of (b) and (c) $________________ Limitation: (d) may not exceed $10,000,000
9. Capital Expenditures (Section 2.1(ll) At the end of each Fiscal Year, commencing with the Fiscal Quarter ending December 31, 2000, Capital Expenditures for such Fiscal Year (excluding non-maintenance Capital Expenditures on theatres opened on or before December 31, 1999 which were contracted for on or before such date) shall not exceed (a) for the Fiscal Year ending December 31, 2000, $25,000,000 and (b) for each Fiscal Year thereafter, $35,000,000. (a) Capital Expenditures incurred during Fiscal Year to date $_______________ (b) Tenant improvements included in (a) and actually reimbursed to date $_______________ (c) Estimated amount of reimbursable tenant improvements included in (a) but not yet reimbursed $_______________ (d) Non-maintenance Capital Expenditures on theatres opened on or before December 31, 1999 which were contracted for on or before such date $_______________ (e) Sum of (a), less (b), less (c), less (d) $_______________ Limitation: (e) may not exceed sum of $25,000,000 in Fiscal Year 2000 and $35,000,000 in any Fiscal Year thereafter
23 24 COMPLIANCE CHECKLIST CARMIKE CINEMAS, INC. ---------------, ------- SCHEDULE - 1 CONSOLIDATED TOTAL CAPITALIZATION (a) Consolidated Net Worth $ ------------------- (b) Consolidated Funded Debt $ ------------------- (c) Consolidated Total Capitalization (sum of (a) plus (b)) $ ==================
24 25 COMPLIANCE CHECKLIST CARMIKE CINEMAS, INC. ---------------, ------- SCHEDULE - 2 Fixed Charges (a) Rental Obligations for: ____ quarter ____ _-__ $_____________ ____ quarter ____ _-__ $_____________ ____ quarter ____ _-__ $_____________ ____ quarter ____ _-__ $_____________ Total Rental Obligations $_____________ (b) Interest Expense for: ____ quarter ____ _-__ $_____________ ____ quarter ____ _-__ $_____________ ____ quarter ____ _-__ $_____________ ____ quarter ____ _-__ $_____________ Total Interest Expense $_____________ TOTAL FIXED CHARGES (sum of (a) plus (b)) $_____________
Adjusted Fixed Charges (c) Dividends for: ____ quarter ____ _-__ $_____________ ____ quarter ____ _-__ $_____________ ____ quarter ____ _-__ $_____________ ____ quarter ____ _-__ $_____________ Total Dividends $_____________ (d) Tax expense for: ____ quarter ____ _-__ $_____________ ____ quarter ____ _-__ $_____________ ____ quarter ____ _-__ $_____________ ____ quarter ____ _-__ $_____________ Total Tax Expense $_____________
25 26 COMPLIANCE CHECKLIST CARMIKE CINEMAS, INC. ---------------, ------- (e) Principal payments(2) for: ____ quarter ____ _-__ $_____________ ____ quarter ____ _-__ $_____________ ____ quarter ____ _-__ $_____________ ____ quarter ____ _-__ $_____________ Total principal payments $_____________ TOTAL ADJUSTED FIXED CHARGES (sum of (a) plus (b) plus (c) plus (d) plus (d)) $_____________ ---- ---- ---- ----
- ------------------ (2) Exclude principal payments on the Senior Notes 26 27 COMPLIANCE CHECKLIST CARMIKE CINEMAS, INC. ---------------, ------- SCHEDULE - 3 Adjusted Cash Flow(3) (a) ____ quarter ____ $____________ Consolidated Operating Income $____________ Rental Obligations $____________ Depreciation and amortization $____________ Net income arising from sale, exchange or distribution of capital assets (not to exceed 5% of Consolidated Operating Income for such period) $____________ Theatre-Level EBITDA $____________ Total for Quarter $____________ (b) ____ quarter ____ $____________ Consolidated Operating Income $____________ Rental Obligations $____________ Depreciation and amortization $____________ Net income arising from sale, exchange or distribution of capital assets (not to exceed 5% of Consolidated Operating Income for such period) $____________ Theatre-Level EBITDA $____________ Total for Quarter $____________ (c) ____ quarter ____ $____________ Consolidated Operating Income $____________ Rental Obligations $____________ Depreciation and amortization $____________ Net income arising from sale, exchange or distribution of capital assets (not to exceed 5% of Consolidated Operating Income for such period) $____________ Theatre-Level EBITDA $____________ Total for Quarter $____________ (d) ____ quarter ____ $____________
- -------------- (3) In determining Adjusted Cash Flow, the expense incurred by the Tenant in complying with the provisions of Section 2.1(mm) in granting and recording the Carmike Mortgages and obtaining the Real Estate Collateral Documentation shall be added back to Consolidated Operating Income. 27 28 COMPLIANCE CHECKLIST CARMIKE CINEMAS, INC. ---------------, ------- Consolidated Operating Income $____________ Rental Obligations $____________ Depreciation and amortization $____________ Net income arising from sale, exchange or distribution of capital assets (not to exceed 5% of Consolidated Operating Income for such period) $____________ Theatre-Level EBITDA $____________ Total for Quarter $____________ Total Adjusted Cash Flow $ (sum of (a) plus (b) plus (c) plus (d) ============
28 29 COMPLIANCE CHECKLIST CARMIKE CINEMAS, INC. ---------------, ------- SCHEDULE - 4 Consolidated Funded Debt
Interest (a) Funded Debt Rate Maturity Total ----------- -------- -------- ----- Secured ------- ______________________ ________ ________ $___________ ______________________ ________ ________ $___________ ______________________ ________ ________ $___________ ______________________ ________ ________ $___________ Total Secured $___________ Unsecured --------- ______________________ ________ ________ $___________ ______________________ ________ ________ $___________ ______________________ ________ ________ $___________ ______________________ ________ ________ $___________ Total Unsecured $___________ Guarantees ---------- ______________________ ________ ________ $___________ ______________________ ________ ________ $___________ Total $___________ Redeemable Preferred Stock $___________ -------------------------- Total $___________ Other Debt ---------- ______________________ ________ ________ $___________ ______________________ ________ ________ $___________ ______________________ ________ ________ $___________ Total Funded Debt $ ========== (b) Current Debt $___________ (c) Unescrowed Off-Balance Sheet Lease Indebtedness (to the extent not included in (a) or (b) $___________ (d) Off-Balance Sheet Lease Equity Amounts (to the extent not included in (a) or (b) $___________ (e) Consolidated Funded Debt (a) plus (b) plus (c) plus (d) $ ---- ---- ---- ==========
29 30 COMPLIANCE CHECKLIST CARMIKE CINEMAS, INC. ---------------, ------- Consolidated Senior Funded Debt (f) Subordinated Debt $___________ (g) Consolidated Senior Funded Debt (e) less (f) $___________
30 31 COMPLIANCE CHECKLIST CARMIKE CINEMAS, INC. ---------------, ------- SCHEDULE - 5 Consolidated Cash Flow(4) (a) ____ quarter ____ $____________ Consolidated Operating Income $____________ Depreciation and amortization $____________ Off-Balance Sheet Lease Payments $____________ Net income arising from sale, exchange or distribution of capital assets (not to exceed 5% of Consolidated Operating Income for such period) $____________ Total for Quarter $____________ (b) ____ quarter ____ $____________ Consolidated Operating Income $____________ Depreciation and amortization $____________ Off-Balance Sheet Lease Payments $____________ Net income arising from sale, exchange or distribution of capital assets (not to exceed 5% of Consolidated Operating Income for such period) $____________ Total for Quarter $____________ (c) ____ quarter ____ $____________ Consolidated Operating Income $____________ Depreciation and amortization $____________ Off-Balance Sheet Lease Payments $____________ Net income arising from sale, exchange or distribution of capital assets (not to exceed 5% of Consolidated Operating Income for such period) $____________ Total for Quarter $____________
- ---------------- (4) In determining Adjusted Cash Flow, the expense incurred by the Tenant in complying with the provisions of Section 2.1(mm) in granting and recording the Carmike Mortgages and obtaining the Real Estate Collateral Documentation shall be added back to Consolidated Operating Income. 31 32 COMPLIANCE CHECKLIST CARMIKE CINEMAS, INC. ---------------, ------- (d) ____ quarter ____ $____________ Consolidated Operating Income $____________ Depreciation and amortization $____________ Off-Balance Sheet Lease Payments $____________ Net income arising from sale, exchange or distribution of capital assets (not to exceed 5% of Consolidated Operating Income for such period) $____________ Total for Quarter $____________ Consolidated Cash Flow $ (sum of (a) plus (b) plus (c) plus (d) ============ ---- ---- ----
32 33 COMPLIANCE CHECKLIST CARMIKE CINEMAS, INC. ---------------, ------- SCHEDULE - 6 Rental Obligations(5) ____ quarter ____ $____________ ____ quarter ____ $____________ ____ quarter ____ $____________ ____ quarter ____ $____________ Total $____________
- -------------------- (5) Rental Obligations shall not include Rental Obligations under the Lease and Rental Obligations under leases arising from sale/leaseback transactions of theatres shall be annualized on a proforma basis, as to any Operating Lease which has been in effect for less than 4 Fiscal Quarters. 33 34 ANNEX 1 TERMINATION OF LEASE SUPPLEMENT NO. 4 THIS TERMINATION OF LEASE SUPPLEMENT NO. 4 dated _______________, 2000 (the "Lease Supplement") terminates Lease Supplement No. 6 dated September 9, 1998, to that certain Master Lease dated as of November 20, 1997 (the "Lease") by and between MOVIEPLEX REALTY LEASING, L.L.C. (the "Landlord") and CARMIKE CINEMAS, INC. (the "Tenant"). 1. Incorporation of Lease. Reference is hereby made to the Lease, all of the terms of which are incorporated herein and made a part hereof. Without limiting the generality of the foregoing, capitalized terms used herein and not otherwise defined shall have the meanings ascribed to such terms in the Lease. 2. Termination of Lease of Supplemental Property. Landlord and Tenant hereby terminate the lease, evidenced by Lease Supplement No. 4, from Landlord to Tenant of the real property, together with all improvements thereon, located in the County of Dougherty, State of Georgia, all as more particularly described on Exhibit A attached hereto and made a part hereof (the "Supplemental Property"). [THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] 34 35 IN WITNESS WHEREOF, the undersigned have executed this Termination of Lease Supplement No. 4 as of the date set forth on the first page hereof. LANDLORD: MOVIEPLEX REALTY LEASING, L.L.C., a New Jersey limited liability company By: Randolph Hudson & Co., Ltd., a Delaware corporation, sole managing member By: Printed Name: Printed Title: TENANT: CARMIKE CINEMAS, INC., a Delaware corporation By: Printed Name: Printed Title: 35 36 EXHIBIT A TO ANNEX 1 Legal Description All that certain tract or parcel of land lying in and being a part of Land Lot 409, 1st Land District, Albany, Dougherty County, Georgia and being more particularly described as follows: COMMENCE at the intersection of the South R/W line of Ledo Road (80' R/W) with the West R/W line of Nottingham Way (R/W varies) said intersection being the POINT OF COMMENCEMENT. Go thence South 87 18' 19" West along the South R/W of Ledo Road for a distance of 279.59' to the POINT OF BEGINNING. From said POINT OF BEGINNING go South 02 41' 41" East for a distance of 403.82' to a point. Go thence South 87 18' 19" West for a distance of 770.14' to a point. Go thence North 01 57' 54" West for a distance of 403.85' to a point on the South R/W line of Ledo Road (80' R/W). Go thence North 87 18' 19" East along the South R/W line of Ledo Road (80' R/W) for a distance of 765.00' to the POINT OF BEGINNING. Said tract contains 7.116 acres. 36 37 ANNEX 2 PREPARED BY AND AFTER PLEASE CROSS REFERENCE FOR RECORDING, RETURN TO: DOCUMENTS RECORDED AT: Michelle A. Hickerson, Esq. Deed Book 1863, Page 328, and Jones, Day, Reavis & Pogue Deed Book 1864, Page 1, 3500 SunTrust Plaza Dougherty County, Georgia Records 303 Peachtree Street Atlanta, Georgia 30308-3242 QUIT-CLAIM DEED FOR RELEASE OF SECURITY DEED AND ASSIGNMENT OF RENTS THIS INDENTURE is made as of the day of , 2000, between WACHOVIA BANK, N.A. ("Grantor"), as Agent for the Lenders (as defined in the Security Deed), and MOVIEPLEX REALTY LEASING, L.L.C., a New Jersey limited liability company ("Grantee") ("Grantor" and "Grantee" to include their respective heirs, successors, legal representatives and assigns where the context permits or requires). WITNESSETH THAT Grantor, for the sole purpose hereinafter set forth, and in consideration of the sum of ONE AND NO/100 DOLLAR ($1.00) and other valuable consideration in hand paid at and before the sealing and delivery of these presents, the receipt and sufficiency whereof are hereby acknowledged, does by these presents remise, release and forever quit-claim unto Grantee all of Grantor's right, title and interest in and to the Property (as defined in the Security Deed). TO HAVE AND TO HOLD said property unto Grantee, so that neither Grantor nor any entity or entities claiming under Grantor shall at any time, by any means or ways, have, claim, or demand any right, title, or interest in or to the land or its appurtenances, or any rights thereof. THIS INDENTURE is given for the purpose of releasing the Property from any and all rights of Grantor, including rights derived from that certain Deed to Secure Debt, Assignment of Leases and Security Agreement (the "Security Deed") from Grantee to Grantor dated September 9, 1998, and recorded on September 9, 1998, in Deed Book 1863, Page 328, Records of Dougherty County; and that certain Assignment of Rents from Grantee to Grantor dated September 9, 1998, and recorded on September 9, 1998, in Deed Book 1864, Page 1, aforesaid records. 37 38 IN WITNESS WHEREOF, Grantor has caused these presents to be executed under seal by its properly and duly authorized officers as of the day, month and year first above written. GRANTOR: Signed, sealed and delivered in WACHOVIA BANK, N.A., as Agent the presence of: By: - ---------------------------------- ------------------------------ Unofficial Witness Name: --------------------------- Title: ---------------------------- - ---------------------------------- Notary Public Attest: -------------------------- Name: --------------------------- Commission Expiration Date: Title: ---------------------------- [NOTARIAL SEAL] [SEAL] 38 39 ANNEX 3 Prepared By and After Recording, Return To: Michelle A. Hickerson, Esq. Jones, Day, Reavis & Pogue 3500 Suntrust Plaza 303 Peachtree Street Atlanta, GA 30308-3242 STATE OF ------------------ COUNTY OF ----------------- LIMITED WARRANTY DEED THIS DEED, made as of the _____ day of ____________, 2000, between MOVIEPLEX REALTY LEASING, L.L.C., a New Jersey limited liability company ("Grantor"), and EASTWYNN THEATRES, INC., an Alabama corporation ("Grantee") (the terms "Grantor" and "Grantee" to include their respective heirs, successors and assigns where the context hereof requires or permits). WITNESSETH THAT: Grantor, for and in consideration of the sum of Ten and No/100 ($10.00) Dollars and other good and valuable consideration, in hand paid at and before the sealing and delivery of these presents, the receipt, adequacy and sufficiency of which are being hereby acknowledged by Grantor, has granted, bargained, sold and conveyed, and by these presents does hereby grant, bargain, sell and convey unto Grantee the following described real property, to-wit: ALL THAT TRACT or parcel of land lying and being in Dougherty County, Georgia, as more particularly described on Exhibit "A" attached hereto and incorporated herein by this reference. TOGETHER WITH all buildings, structures, fixtures and other improvements located on the real property described above and all easements, appurtenances, rights, privileges, and reservations, belonging or pertaining thereto including, without limitation, any right, title or interest of Grantor in and to adjacent streets, alleys or rights-of-way. TO HAVE AND TO HOLD the above-described property, together with all and singular the rights, members and appurtenances thereof, to the same being, belonging or in anywise appertaining to the only proper use, benefit and behoof of Grantee, forever in FEE SIMPLE, subject only to those matters (the "Permitted Encumbrances") and more particularly described on Exhibit "B" attached hereto and incorporated herein by this reference. AND THE SAID GRANTOR will warrant and forever defend the right and title to the above-described property unto the Grantee, against the lawful claims of all persons whomsoever, 39 40 owning, holding or claiming by, through or under Grantor and not otherwise, except for claims arising under or by virtue of the Permitted Encumbrances. IN WITNESS WHEREOF, Grantor has signed, sealed and delivered this Deed the day and year first written above. GRANTOR: MOVIEPLEX REALTY LEASING, L.L.C., a New Jersey limited liability company Signed, sealed and delivered By: Randolph Hudson & Co., Ltd., a Delaware in the presence of: corporation, sole managing member By: - ---------------------------- ---------------------------------- Unofficial Witness Name: -------------------------------- Title: ------------------------------- - ---------------------------- Notary Public Attest: ------------------------------ Name: -------------------------------- My commission expires: Title: ------------------------------- (NOTARIAL SEAL) (CORPORATE SEAL) 40 41 EXHIBIT A TO ANNEX 3 Legal Description All that certain tract or parcel of land lying in and being a part of Land Lot 409, 1st Land District, Albany, Dougherty County, Georgia and being more particularly described as follows: COMMENCE at the intersection of the South R/W line of Ledo Road (80' R/W) with the West R/W line of Nottingham Way (R/W varies) said intersection being the POINT OF COMMENCEMENT. Go thence South 87 18' 19" West along the South R/W of Ledo Road for a distance of 279.59' to the POINT OF BEGINNING. From said POINT OF BEGINNING go South 02 41' 41" East for a distance of 403.82' to a point. Go thence South 87 18' 19" West for a distance of 770.14' to a point. Go thence North 01 57' 54" West for a distance of 403.85' to a point on the South R/W line of Ledo Road (80' R/W). Go thence North 87 18' 19" East along the South R/W line of Ledo Road (80' R/W) for a distance of 765.00' to the POINT OF BEGINNING. Said tract contains 7.116 acres. 41 42 EXHIBIT B TO ANNEX 3 Permitted Encumbrances (i) All visible easements and restrictions of record. (ii) General or special taxes and assessments, not yet due and payable. (iii) Right-of-way easement to Georgia Power Company dated May 15, 1975, and recorded July 21, 1975, in Deed Book 546, Page 348, Dougherty County Land Records, as referenced on that certain ALTA/ACSM Land Title Survey prepared by Marbury Engineering Company dated August 10, 1998 (the "Survey"). (iv) The Survey discloses a thirty-five (35) foot minimum setback line along Ledo Road. But excluding from the foregoing any liens, encumbrances, charges, exceptions and restrictions which have been created by or resulted from acts of Grantor during the Term (as defined in that certain Master Lease between Grantor, as landlord, and Grantee, as tenant, dated November 20, 1997, as supplemented from time to time) which were not consented to or requested by Grantee. 42 43 ANNEX 4 UPON RECORDING RETURN TO: Jones, Day, Reavis & Pogue 3500 SunTrust Plaza 303 Peachtree Street, N.E. Atlanta, Georgia 30308-3242 Attn: Michelle A. Hickerson STATE OF GEORGIA COUNTY OF _______________ TERMINATION OF UCC-2 NOTICE FILING DEBTOR: SECURED PARTY: MOVIEPLEX REALTY LEASING, L.L.C. WACHOVIA BANK, N.A., as Agent 2 World Trade Center, Suite 2112 191 Peachtree Street, N.E. New York, New York 10048 Atlanta, Georgia 30303 The Secured Party no longer claims a security interest under the UCC-2 Notice Filing filed September 9, 1998, at Book 1864, Page 9, in the Office of the Clerk of the Superior Court of Dougherty County, Georgia. The undersigned, being the present record holder and owner under such UCC-2 Notice Filing, hereby authorizes and directs the Clerk of such Superior Court, as provided in O.C.G.A. ss. 11-9-403(7), to terminate the UCC-2 Notice Filing of record. SECURED PARTY: WACHOVIA BANK, N.A., as Agent By: ------------------------------------------- Printed Name: -------------------------------- Printed Title: -------------------------------- 43 44 ANNEX 5 TERMINATION OF LEASE SUPPLEMENT NO. 6 THIS TERMINATION OF LEASE SUPPLEMENT NO. 6 dated ____________________, 2000 (the "Lease Supplement") terminates Lease Supplement No. 6 dated January 14, 1999, to that certain Master Lease dated as of November 20, 1997 (the "Lease") by and between MOVIEPLEX REALTY LEASING, L.L.C. (the "Landlord") and CARMIKE CINEMAS, INC. (the "Tenant"). 1. Incorporation of Lease. Reference is hereby made to the Lease, all of the terms of which are incorporated herein and made a part hereof. Without limiting the generality of the foregoing, capitalized terms used herein and not otherwise defined shall have the meanings ascribed to such terms in the Lease. 2. Termination of Lease of Supplemental Property. Landlord and Tenant hereby terminate the lease, evidenced by Lease Supplement No. 6, from Landlord to Tenant of the real property, together with all improvements thereon, located in the County of Rutherford, State of Tennessee, all as more particularly described on Exhibit A attached hereto and made a part hereof (the "Supplemental Property"). [THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] 44 45 IN WITNESS WHEREOF, the undersigned have executed this Termination of Lease Supplement No. 6 as of the date set forth on the first page hereof. LANDLORD: MOVIEPLEX REALTY LEASING, L.L.C., a New Jersey limited liability company By: Randolph Hudson & Co., Ltd., a Delaware corporation, sole managing member By: ----------------------------------------- Printed Name: ------------------------------- Printed Title: ------------------------------ TENANT: CARMIKE CINEMAS, INC., a Delaware corporation By: ----------------------------------------- Printed Name: ------------------------------- Printed Title: ------------------------------ 45 46 EXHIBIT A To be Added 46 47 ANNEX 6 This Instrument Prepared By And Upon Recordation, Return To: CROSS-REFERENCE TO: Michelle A. Hickerson, Esq. Book B-447, Page 283, and Jones, Day, Reavis & Pogue Book B-447, Page 319 3500 SunTrust Plaza Rutherford County, Tennessee Records 303 Peachtree Street, N.E. Atlanta, Georgia 30308-3242 RELEASE OF DEED OF TRUST AND TERMINATION OF ASSIGNMENT WACHOVIA BANK, N.A. ("Beneficiary"), as Agent for the Lenders (as defined in the Deed of Trust), is the sole owner and holder of that certain Deed of Trust, Assignment of Leases and Security Agreement (the "Deed of Trust") from MOVIEPLEX REALTY LEASING, L.L.C., a New Jersey limited liability company ("Grantor"), to John H. Roe, Jr., Trustee, dated January 14, 1999, and recorded in Book B-447, Page 283, in the Register's Office of Rutherford County, Tennessee (the "Records") and that certain Assignment of Rents (the "Assignment") from Grantor, dated January 14, 1999, and recorded in Book B-447, Page 319, in the Records. Beneficiary hereby releases and forever discharges the Property (as defined in the Deed of Trust) from the lien of the Deed of Trust and the Assignment and declares that the lien of the foregoing instruments with respect to the Property is fully satisfied and discharged. WITNESS my hand and seal this _____ day of _______________, 2000. BENEFICIARY: WACHOVIA BANK, N.A., as Agent By: ---------------------------------- Printed Name: ------------------------- Printed Title: ------------------------ Attest: ------------------------------- Printed Name: ------------------------- Printed Title: ------------------------ [SEAL] 47 48 STATE OF __________________________) ) COUNTY OF _________________________) Personally appeared before me, the undersigned, a Notary Public having authority within the State and County aforesaid,______________________ , with whom I am personally acquainted (or proved to me on the basis of satisfactory evidence), and who acknowledged that __he executed the within instrument for the purposes therein contained on behalf of Agent as hereinafter described, and who further acknowledged that __he is the __________________________ of Wachovia Bank, N.A., as Agent, the within named bargainer, ("Agent"), and is authorized by Agent to execute this instrument on behalf of Agent as ___________________ of Agent. WITNESS my hand, at office, this _____ day of _______________, 2000. 48 49 ANNEX 7 This Instrument Prepared By: Michelle A. Hickerson, Esq. JONES, DAY, REAVIS & POGUE 3500 SunTrust Plaza 303 Peachtree Street, NE Atlanta, Georgia 30308-3242 (404) 521-3939 LIMITED WARRANTY DEED ================================================================================ Address New Owner as Follows: Send Tax Bills To: - -------------------------------------------------------------------------------- Carmike Cinemas, Inc. Carmike Cinemas, Inc. - -------------------------------------------------------------------------------- P.O. Box 391 P.O. Box 391 - -------------------------------------------------------------------------------- Columbus, GA 31902-0391 Columbus, GA 31902-0391 - -------------------------------------------------------------------------------- Part of Map 92, Parcel 110 ================================================================================
STATE OF _______________ COUNTY OF _____________ FOR AND IN CONSIDERATION of the sum of Ten and No/100 Dollars ($10.00), and other good and valuable consideration, receipt of which is hereby acknowledged, MOVIEPLEX REALTY LEASING, L.L.C., a New Jersey limited liability company ("Grantor"), has bargained and sold and does hereby transfer and convey unto EASTWYNN THEATRES, INC., an Alabama corporation ("Grantee"), its successors and assigns, a certain tract of land located in Rutherford County, Tennessee and described on EXHIBIT A attached hereto and incorporated herein by this reference (the "Property"). This is improved property is located in Murfreesboro, Tennessee. TO HAVE AND TO HOLD the Property, together with all the appurtenances and hereditaments thereunto belonging or in anywise appertaining, to the said Grantee, its successors and assigns, forever, subject only to those matters shown on EXHIBIT B attached hereto and incorporated herein by this reference. 49 50 AND Grantor does hereby covenant with Grantee that it is lawfully seized and possessed of the Property in fee simple; that it has good right to sell and convey the same; and that the same is unencumbered, except as shown on EXHIBIT B and except for encumbrances which were not created by Grantor or suffered or incurred by Grantor. AND Grantor does further covenant and bind itself, its successors and assigns, to warrant and forever defend the title to the Property against the lawful claims of all persons claiming by, through or under Grantor, but no further or otherwise. IN WITNESS WHEREOF, Grantor has caused this instrument to be executed on this ____ day of _______________, 2000. GRANTOR: MOVIEPLEX CINEMAS, INC., a New Jersey limited liability company By: Randolph, Hudson & Co., Inc., a Delaware corporation, sole managing member By: --------------------------------- Name: ------------------------------- Title: ------------------------------ [SEAL] 50 51 STATE OF __________ ) ) COUNTY OF ________ ) The actual consideration or value, whichever is greater, for this transfer is $__________. ------------------------- AFFIANT Subscribed and sworn to before me this ____ day of __________, 2000. ------------------------- NOTARY PUBLIC My Commission Expires: - --------------------- 51 52 STATE OF _________) ) COUNTY OF ________) Personally appeared before me, the undersigned, a notary public having authority within the State and County aforesaid, __________, with whom I am personally acquainted, and who has acknowledged that he executed the within instrument for the purposes therein contained, and who further acknowledged that he is the __________ of Randolph, Hudson & Co., Inc., a Delaware corporation (the "Corporation"), the sole managing member of MoviePlex Realty Leasing, L.L.C., a New Jersey limited liability company (the "Company"), and is authorized by the Corporation to execute this instrument on behalf of the Corporation as the _____________ of the Corporation, the Corporation being authorized to execute this instrument on behalf of the Company. Witness my hand, at office, this ____ day of ____________, 2000. ------------------------------ Notary Public My Commission Expires: (NOTARIAL SEAL) 52 53 EXHIBIT A TO ANNEX 7 To Be Added 53 54 EXHIBIT B TO ANNEX 7 Permitted Encumbrances (i) Restrictive covenants, easements and setback lines that are applicable to the described property and of record, and all zoning and subdivision regulations of the appropriate governmental body along with any easements and rights of ways of public roads and utilities. (ii) General or special taxes and assessments, not yet due and payable. (iii) Greenbelt Application Approval recorded in Book A467, page 145, in the Register's Office for Rutherford County, Tennessee. (iv) Rights of way and easements, for streets, public utility and drainage, construction, slopes, sanitary sewer and drainage, ingress and egress and incidental purposes, conveyed to the City of Murfreesboro by instrument recorded in Book 527, page 490, in the Register's Office for Rutherford County, Tennessee, as shown on the Final Plan prepared by R.L. Montoya Land Surveying, Inc. and dated October 29, 1998, last revised November 20, 1998. But excluding from the foregoing any liens, encumbrances, charges, exceptions and restrictions which have been created by or resulted from acts of Grantor during the Term (as defined in that certain Master Lease between Grantor, as landlord, and Grantee, as tenant, dated November 20, 1997, as supplemented from time to time) which were not consented to or requested by Grantee. 54 EX-27 5 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS OF CARMIKE CINEMAS, INCORPORATED FOR THE QUARTER ENDED MARCH 31, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS DEC-31-2000 JAN-01-2000 MAR-31-2000 6,576 9,948 2,296 0 4,771 65,861 823,895 170,871 815,823 102,730 287,112 0 550 342 195,790 815,823 32,979 101,535 3,980 89,886 12,739 0 10,788 (11,878) (4,514) (7,364) 0 0 0 (8,120) (.72) (.72)
-----END PRIVACY-ENHANCED MESSAGE-----