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EXHIBIT 10.11(c)
INTERCOMPANY SUBORDINATION AGREEMENT
TO: Bank of America National Trust and Savings Association,
as Administrative Agent (the "Administrative Agent")
Ladies and Gentlemen:
Reference is made to the Credit Agreement dated as of November 16, 1998
(as from time to time amended, extended, restated, modified or supplemented, the
"Credit Agreement;" capitalized terms used herein shall have the meanings
assigned to them in the Credit Agreement) among Cinemark Mexico (USA), Inc. (the
"Borrower"), the banks from time to time party thereto (the "Banks") and Bank of
America National Trust and Savings Association, as Administrative Agent (the
"Administrative Agent") for said Banks. It is a requirement of the Credit
Agreement that the Subordinated Creditors enter into this Subordination
Agreement.
Borrower and its Subsidiaries (each, a "Subordinated Obligor") are or
may become indebted or otherwise obligated to Cinemark USA, Inc. or its
Subsidiaries (each, a "Subordinated Creditor"), and desire that the Banks extend
financial accommodations to Borrower. For the purpose of inducing the Banks to
grant, continue or renew such financial accommodations, and in consideration
thereof, each Subordinated Creditor agrees as follows:
1. Any and all claims of the Subordinated Creditor against any
Subordinated Borrower, now or hereafter existing, (the "Subordinated Debt"),
are, and shall be at all times, subject and subordinate to any and all
Obligations owing to the Administrative Agent and the Banks (collectively, the
"Senior Creditor"). Except as otherwise permitted under the Credit Agreement,
all Subordinated Debt is unsecured.
2. If any Default or Event of Default as defined in the Credit
Agreement (as herein defined) shall at any time occur and be continuing (each, a
"Default"), then at all times thereafter until such Default shall have been
cured, or such Default or the benefits of this sentence shall have been waived
in writing by the Administrative Agent, no Subordinated Borrower shall, directly
or indirectly, make any payment or distribution of assets with respect to the
Subordinated Debt, except as set forth in paragraph 10 hereof. With respect to
any Subordinated Debt which is permitted to be secured, the relevant
Subordinated Creditors agree to not foreclose or take any action with respect
to, or otherwise realize upon, such lien unless and until payment could
otherwise be made on such Subordinated Debt hereunder.
3. In case of (a) any assignment for the benefit of creditors by any
Subordinated Borrower, (b) any proceedings under any bankruptcy or other debtor
relief laws being instituted by or against any Subordinated Borrower, (c) the
appointment of any receiver for any Subordinated Borrower's business or assets,
or (d) any dissolution or winding up of the affairs of any Subordinated Borrower
and any assignee, trustee in bankruptcy, receiver, debtor in possession or other
person or persons in charge, are hereby directed to pay to the Administrative
Agent the full amount of the Obligations (including interest and fees to the
date of payment)
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Cinemark Mexico (USA) Intercompany Subordination Agreement
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before making any payment of principal or interest to any Subordinated Creditor
under any Subordinated Debt (whether or not from the proceeds of any security
interest securing any Subordinated Debt). With respect to any Subordinated Debt
which is permitted to be secured, until payment in full of the Obligations
(including interest and fees to the date of payment), any proceeds of such lien
shall be applied to the Obligations.
4. The Senior Creditor is hereby authorized by each Subordinated
Creditor to: (a) renew, compromise, extend, accelerate or otherwise change the
time of payment, or any other terms, of any existing or future Obligations or
any part thereof, (b) increase or decrease the rate of interest payable thereon,
(c) exchange, enforce, waive, release, or fail to perfect any security therefor,
(d) apply such security and direct the order or manner of sale thereof in such
manner as the Senior Creditor may at its discretion determine, (e) release the
Borrower or any guarantor of any indebtedness of the Borrower from liability,
and (f) make optional future advances to the Borrower, all without notice to any
Subordinated Creditor and without affecting the subordination provided by this
Agreement.
5. Each Subordinated Creditor acknowledges and agrees that it shall
have the sole responsibility for obtaining from any Subordinated Borrower such
information concerning any Subordinated Borrower's financial condition or
business operations as they may require, and that Senior Creditor shall not have
any duty at any time to disclose to any Subordinated Creditor any information
relating to the business operations or financial condition of any Subordinated
Borrower.
6. On the written request of the Administrative Agent, each
Subordinated Creditor shall xxxx any note or instrument evidencing any
Subordinated Debt with a conspicuous legend which reads substantially as
follows:
"THIS [NOTE] IS SUBORDINATED TO CERTAIN PRESENT OR FUTURE
INDEBTEDNESS OWING FROM THE MAKER TO THE BANKS PARTY TO THE CREDIT
AGREEMENT DATED AS OF NOVEMBER 16, 1998 AMONG CINEMARK MEXICO (USA),
INC., THE BANKS PARTY THERETO AND BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, AS ADMINISTRATIVE AGENT, AS AMENDED FROM TIME TO
TIME, AND MAY BE ENFORCED ONLY IN ACCORDANCE WITH THAT CERTAIN
SUBORDINATION AGREEMENT DATED AS OF NOVEMBER 16, 0000 XXXXXXX XXXX XX
XXXXXXX NATIONAL TRUST AND SAVINGS ASSOCIATION, AS ADMINISTRATIVE AGENT
AND PROMISOR."
7. In the event that any payment or any cash or noncash distribution is
made to any Subordinated Creditor in violation of the terms of this Agreement
(including receiving proceeds from realization upon any security interest
securing Subordinated Debt), such Subordinated Creditor shall receive the same
in trust for the benefit of the Senior Creditor, and shall forthwith remit it to
the Administrative Agent in the form in which it was received, together with
such endorsements or documents as may be necessary to effectively negotiate or
transfer the same to the Administrative Agent.
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8. For violation of this Agreement, each Subordinated Creditor shall be
jointly and severally liable for all losses and damages sustained by reason of
such breach.
9. Each Subordinated Creditor agrees not to sell, assign, transfer,
pledge, hypothecate, or encumber any Subordinated Debt except subject expressly
to this Agreement and not to take any lien or security on any of Subordinated
Borrower's property so long as any Obligations shall exist. This Agreement shall
be binding upon the heirs, successors and assigns of the Subordinated Creditors
and Subordinated Borrowers.
10. Notwithstanding the provisions of Section 2, (a) a Subordinated
Borrower may make payments to a Subordinated Creditor on Subordinated Debt for
its respective share of consolidated tax liability and (b), so long as no
Default or Event of Default has occurred, a Subordinated Creditor may receive
principal and noncash interest payments on the Subordinated Debt; provided,
however, that such payments in the case of subsection (a) does not cause a
Default or Event of Default under any Obligations.
11. This Agreement may be executed in any number of counterparts and
all of such counterparts taken together shall be deemed to constitute one and
the same instrument.
12. THIS AGREEMENT AND ANY INSTRUMENT OR AGREEMENT REQUIRED HEREUNDER,
SHALL BE GOVERNED BY AND CONSTRUED UNDER THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of November 16, 1998.
THE SUBORDINATED CREDITORS LISTED ON
SCHEDULE A HERETO:
By:
---------------------------------
Name:
-------------------------------
Title:
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ACCEPTANCE OF SUBORDINATION
AGREEMENT BY SUBORDINATED BORROWERS
The undersigned being the Subordinated Borrowers named in the foregoing
Subordination Agreement, hereby accept and consent thereto and agree to be bound
by all the provisions thereof, not to make any payment to or on behalf of the
Subordinated Creditors in violation of such agreement and to recognize all
priorities and other rights granted thereby to the Senior Creditor, and its
successors and assigns, and to perform in accordance therewith.
Dated: November 16, 1998
THE SUBORDINATED OBLIGORS LISTED ON
SCHEDULE A HERETO:
By:
---------------------------------
Name:
-------------------------------
Title:
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EXHIBIT A TO INTERCOMPANY SUBORDINATION AGREEMENT
SUBORDINATED CREDITORS
SUBORDINATED BORROWERS
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Cinemark Mexico (USA) Intercompany Subordination Agreement
