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EXHIBIT 10.9(r)
SECOND AMENDMENT AND WAIVER TO SECOND AMENDED AND RESTATED
REDUCING REVOLVING CREDIT AGREEMENT
THIS SECOND AMENDMENT AND WAIVER TO SECOND AMENDED AND RESTATED
REDUCING REVOLVING CREDIT AGREEMENT (this "Second Amendment") is made and dated
as of November 16, 1998 by and among CINEMARK USA, INC., a Texas
corporation (the "Company"), the several financial institutions party hereto
(the "Banks"), Bank of America National Trust and Savings Association, as agent
for the Banks (in such capacity, the "Administrative Agent"), NationsBank, N.A.
as Syndication Agent and BankBoston, N.A., The Bank of Nova Scotia, CIBC Inc.
and Fleet Bank, as Co-Agents, and amends that certain Second Amended and
Restated Reducing Revolving Credit Agreement dated as of February 12, 1998 among
the Company, the Banks, the Administrative Agent, the Syndication Agent and the
Co-Agents as amended by a First Amendment to Second Amended and Restated
Reducing Revolving Credit Agreement dated as of August 31, 1998 (as so amended,
the "Agreement).
RECITALS
A. Concurrently herewith, Cinemark Mexico (USA) Inc., a Delaware
corporation ("Cinemark Mexico (USA)"), intends to enter into a credit agreement
dated as of even date herewith providing for a revolving credit facility of
$30,000,000 (as amended from time to time, the "Cinemark Mexico (USA) Credit
Agreement"). The proceeds of the initial Loans thereunder will be used to pay
off outstandings under the Cinemark International Credit Agreement which will
thereupon be terminated. The obligations of Cinemark Mexico (USA) under the
Cinemark Mexico (USA) Credit Agreement will be guarantied by the Company.
B. In connection with the foregoing, the Board of Directors of the
Company intends to designate Cinemark Mexico (USA) and all of its Subsidiaries,
now Unrestricted Subsidiaries of Cinemark International, as Restricted
Subsidiaries under the Agreement, and to transfer the stock of Cinemark Mexico
(USA) to the Company, making Cinemark Mexico (USA) a direct Subsidiary of the
Company.
C. In addition, the Company contemplates designating Cinemark del Peru
S.A. ("Cinemark Peru"), Inversionnes Chile S.A. ("Inversionnes Chile") and
Cinemark Chile S.A. ("Cinemark Chile"), a Subsidiary of Inversionnes Chile, and
now Unrestricted Subsidiaries of Cinemark International, as Restricted
Subsidiaries under the Agreement and transferring the stock of Cinemark Peru,
Inversionnes Chile and Cinemark Chile to the Company or a Restricted Subsidiary.
D. The Company has requested that it be permitted to enter into up to
$100,000,000 in sale-leaseback transactions.
E. The Company has also requested that the Administrative Agent and the
Banks waive any Default or Event of Default arising by reason of a
sale-leaseback of theatres in Austin, Texas not exceeding $14,000,000 which was
closed on or about October 9, 1998.
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F. By this Second Amendment, the Banks and the Administrative Agent
desire to amend and waive the Agreement to the extent necessary to permit the
foregoing transactions, all on the terms and conditions set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereby agree as follows:
1. TERMS. All terms used herein shall have the same meanings as in
the Agreement unless otherwise defined herein. All references to the Agreement
shall mean the Agreement as hereby amended.
2. AMENDMENTS TO AGREEMENT. The Agreement shall be amended as
follows:
2.1 The following new definitions are inserted in Section 1.1 of the
Agreement (Defined Terms) as follows:
"'Cinemark Chile' means Cinemark Chile S.A. a Chilean
corporation."
"'Cinemark de Mexico' means Cinemark de Mexico S.A. de C.V., a
Mexican variable capital corporation."
"'Cinemark Mexico (USA)' means Cinemark Mexico (USA) Inc., a
Delaware corporation."
"'Cinemark Mexico (USA) Credit Agreement' means that certain
Credit Agreement dated as of November 16, 1998, among Cinemark Mexico
(USA), the banks named therein, Bank of America National Trust and
Savings Association, as administrative agent thereunder, as
supplemented, modified, amended, restated, renewed or extended from
time to time."
"'Cinemark Mexico (USA) Guaranty' means that certain
Continuing Guaranty dated as of November 16, 1998, attached as Exhibit
G hereto, executed by the Company in favor of the banks and the
administrative agent party to the Cinemark Mexico (USA) Credit
Agreement, as supplemented, modified, amended, restated, renewed or
extended from time to time."
"'Cinemark Peru' means Cinemark del Peru S.A. a Peruvian
corporation."
"'Domestic Material Restricted Subsidiary' means any Domestic
Restricted Subsidiary which is a Material Restricted Subsidiary."
"'Domestic Restricted Subsidiary' means any Restricted
Subsidiary owning any assets that is incorporated or otherwise
organized under the laws of any state or district of the United States
of America, or that is qualified to do business, or are otherwise doing
business, in the United States of America."
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"'Foreign Material Restricted Subsidiary' means any Foreign
Restricted Subsidiary which is a Material Restricted Subsidiary."
"'Foreign Material Restricted Subsidiary Pledge Agreement'
means the Foreign Material Restricted Subsidiary Pledge Agreement
substantially in the form of Exhibit C-3, as amended, supplemented,
modified, renewed and replaced from time to time."
"'Foreign Restricted Subsidiary' means any Restricted
Subsidiary (a) that is incorporated or otherwise organized under the
laws of any foreign country or subdivision thereof, or which is not
qualified to do business, or is not otherwise doing business, in the
United States of America and (b) the capital stock of which is at least
90% beneficially owned, directly or indirectly, by the Company."
"'Intercompany Subordinated Indebtedness' means any
Indebtedness of the Company or its Subsidiaries owing to the Company or
any other of its Subsidiaries."
"'Intercompany Subordination Agreement" means the Intercompany
Subordination Agreement substantially in the form of Exhibit H, as
amended, supplemented, modified, renewed and replaced from time to
time."
"'Inversionnes Chile' means Inversionnes Chile S.A. a Chilean
corporation."
2.2 The definition of "Annualized Cash Flow" in Section 1.1 of the
Agreement is amended and restated in its entirety as follows:
"'Annualized Cash Flow' means, for any period, for the Company
and its Restricted Subsidiaries, Cash Flow for such period plus (a)
Proforma Cash Flow for Annualized Theatres less (b) Cash Flow from
Annualized Theatres; provided, however, that if during the period for
which Annualized Cash Flow is being determined, the Company or any of
its Restricted Subsidiaries shall have acquired any assets identified
to the Administrative Agent other than assets acquired as a result of
Capital Expenditures made in the ordinary course of business (including
without limitation acquisition by merger or consolidation) or made any
Dispositions of assets, the Cash Flow of the Company and its Restricted
Subsidiaries shall be calculated on a pro forma basis as if such
acquisition or Disposition had occurred at the beginning of such
period; provided, further, that if the Cash Flow of Foreign Restricted
Subsidiaries exceeds 30% of the Annualized Cash Flow of the Company and
its Restricted Subsidiaries on a consolidated basis, such excess over
30% shall be excluded from the determination of Annualized Cash Flow;
provided, further, that when a Subsidiary is designated as a Restricted
Subsidiary in accordance with the definition thereof, Annualized Cash
Flow shall thereafter be calculated as if such designation had been
made at the beginning of the applicable measurement period."
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2.3 The definition of "Cash Equivalent" in Section 1.1 of the
Agreement is amended and restated in its entirety as follows:
"'Cash Equivalents' means any Investment in the following
kinds of instruments:
"(a) readily marketable obligations issued or unconditionally
guaranteed as to principal and interest by the United States of America
or by any agency or authority controlled or supervised by and acting as
an instrumentality of the United States of America if, on the date of
purchase or other acquisition of any such instrument by Borrower, the
remaining term to maturity or interest rate adjustment is not more than
two years;
"(b) (i) demand and time deposits and certificates of deposit
or acceptances with a maturity of 180 days or less of (i) any financial
institution organized in the United States that is a member of the
Federal Reserve System having combined capital and surplus and
undivided profits of not less than $100,000,000, (ii) overseas branches
of commercial banks incorporated under the laws of the United States of
America, any state thereof, the District of Columbia, Canada or any
province or territory thereof having combined capital and surplus and
undivided profits in excess of $100,000,000, or (iii) any commercial
bank organized under the laws of any other country that is a member of
the Organization for Economic Cooperation and Development ("OECD") and
has total assets in excess of $100,000,000, or (ii) deposits available
for withdrawal or distribution with any commercial bank not meeting the
qualifications specified in clause (b)(i) above but which is organized
under the laws of (a) any country that is a member of the OECD and has
total assets in excess of $100,000,000 or (b) any other country in
which the Company or any Restricted Subsidiary maintains an office or
is engaged in business, provided that, in either case (A) all such
deposits are required to be made in such accounts in the ordinary
course of business, (B) such deposits do not at any one time exceed
$1,000,000 in the aggregate and (C) no funds so deposited remain on
deposits in such bank for more than 30 days;
"(c) commercial paper issued by any corporation, if such
commercial paper has, at the time of Borrower's Investment therein or
contractual commitment providing for such Investment, credit ratings of
at least A-1 by Standard & Poor's Rating Group ("S&P") and P-1 by
Xxxxx'x Investor Service, Inc. ("Moody's");
"(d) money market mutual or similar funds having assets in
excess of $100,000,000;
"(e) readily marketable debt obligations issued by any
corporation, if at the time of the Borrower's or its Restricted
Subsidiaries' Investment therein or contractual commitment providing
for such Investment (1) the remaining term to maturity is not more than
two years and (2) such debt obligations are rated in one of the two
highest rating categories of both S&P and Moody's; and
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"(f) demand or time deposit accounts used in the ordinary
course of business with commercial banks the balances in which are at
all times fully insured as to principal and interest by the Federal
Deposit Insurance Corporation or any successor thereto or any Canadian
equivalent thereof.
"In the event that either S&P or Moody's ceases to publish
ratings of the type provided herein, a replacement rating agency shall
be selected by Borrower or its Restricted Subsidiaries with the consent
of the Majority Banks, and in each case the rating of such replacement
rating agency most nearly equivalent to the corresponding S&P or
Xxxxx'x rating, as the case may be, shall be used for purposes hereof."
2.4 The definition of "Excluded Dispositions" in Section 1.1 of
the Agreement is amended by deleting "and" at the end of subsection (g);
deleting the period at the end of subsection (h) and inserting "; and" in lieu
thereof, and inserting the following new subsections immediately following
subsection (h) as follows:
"(i) Sale-leaseback transactions relating to theatres in
Austin Texas completed on or about October 9, 1998 not exceeding
$14,000,000 in aggregate amount; and
"(j) additional sale-leaseback transactions not exceeding
$100,000,000 in aggregate amount since the Closing Date."
2.5 The definition of "Loan Documents" in Section 1.1 of the
Agreement is amended by inserting "the Intercompany Subordination Agreement,"
after "any Notes,".
2.6 References to "Material Restricted Subsidiary" in the
definition of "Guarantor," and in the proviso to the definition of "Restricted
Subsidiary," in recitals B and C to Exhibit F (form of Guaranty) and in
Paragraph 21 of Exhibit F shall be deemed amended to be references to "Domestic
Material Restricted Subsidiary." The executed version of the Guaranty shall also
be deemed amended as aforesaid.
2.7 The definition of "Pledge Agreement" in Section 1.1 of the
Agreement is amended and restated in its entirety as follows:
"'Pledge Agreement' means, unless the context otherwise
requires, (a) the Xxxxxxxx Family Pledge Agreement prior to the
Recapitalization Date, and the Cinemark Theatres Holdings Pledge
Agreement thereafter, and (b) the Foreign Material Restricted
Subsidiary Pledge Agreement (collectively, the 'Pledge Agreements')."
2.8 Section 5.1(a) of the Agreement (Corporate Existence and
Power) is amended and restated in its entirety as follows:
"(a) is a corporation (with respect to the Company) or a
corporation or other limited liability entity (with respect to
Restricted Subsidiaries organized under the laws of
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a foreign jurisdiction), in each case duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
incorporation or formation;"
2.9 Section 5.13 of the Agreement (Capital Stock; Subsidiaries) is
amended by (a) inserting "under the Xxxxxxxx Family Pledge Agreement" after
"Pledged Collateral" in subsection (a)(ii), (b) inserting "under the Cinemark
Holdings Pledge Agreement" after "Pledged Collateral" in subsection (b)(i), and
(c) inserting a new subsection (d) as follows:
"(d) At all times the Pledged Collateral under the Foreign
Material Restricted Subsidiary Pledge Agreement constitutes at least
65% of the issued and outstanding capital stock of each Foreign
Material Restricted Subsidiary, and there are no options, warrants,
shareholder agreements, calls or commitments of any character
whatsoever relating to any of such Pledged Collateral except as
disclosed therein and consented to by the Majority Banks."
2.10 A new Section 5.23 is inserted in the Agreement after Section
5.22 as follows:
"5.23 YEAR 2000 COMPLIANCE. The Company has (a) initiated a
review and assessment of all areas within its and each of its
Restricted Subsidiaries' business and operations (including those
affected by suppliers and vendors) that could be adversely affected by
the "Year 2000 Problem" (that is, the risk that computer applications
used by the Company or any of its Restricted Subsidiaries (or its
suppliers and vendors) may be unable to recognize and perform properly
date-sensitive functions involving certain dates prior to and any date
after December 31, 1999), (ii) developed a plan and timeline for
addressing the Year 2000 Problem on a timely basis, and (iii) to date,
implemented that plan in accordance with that timetable. The Company
reasonably believes that all computer applications (including those of
its suppliers and vendors) that are material to its or any of its
Restricted Subsidiaries' business and operations will on a timely basis
be able to perform properly date-sensitive functions for all dates
before and after January 1, 2000 (that is, be "Year 2000 compliant),
except to the extent that a failure to do so could not reasonably be
expected to have a Material Adverse Effect."
2.11 Section 6.2(a) of the Agreement (Certificates; Other
Information) is amended by changing the reference to Section 7.5(k) to Section
7.5(j).
2.12 Section 6.13 of the Agreement is amended and restated in its
entirety as follows:
"6.13 DOMESTIC MATERIAL RESTRICTED SUBSIDIARIES TO BE
GUARANTORS. The Company shall cause each Subsidiary which is a Domestic
Material Restricted Subsidiary or becomes a Domestic Material
Restricted Subsidiary after the Closing Date, determined as of the most
recent financial statements delivered pursuant to Section 6.1 from time
to time, to become a Guarantor under the Guaranty by executing and
delivering to the Administrative Agent (with sufficient copies for all
Banks) a supplement to the Guaranty in the form of Exhibit A thereto,
together with documents and opinions of the type
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referred to in Sections 4.1(b), (c) and (e) with respect to such
Guarantor, all in form and substance reasonably satisfactory to the
Administrative Agent and its legal counsel. Once a Subsidiary has
executed and delivered a Guaranty, it shall remain a Guarantor so long
as it is a Restricted Subsidiary even if its assets or Cash Flow
calculated at any subsequent date would no longer qualify it as a
Domestic Material Restricted Subsidiary."
2.13 Section 6.14 of the Agreement (Further Assurances) is
renumbered as Section 6.16 and new Sections 6.14 and 6.15 is inserted in the
Agreement after Section 6.13 as follows:
"6.14 PLEDGE OF STOCK OF FOREIGN MATERIAL RESTRICTED
SUBSIDIARIES. The Company shall, and shall cause each Domestic
Restricted Subsidiary to, promptly pledge, or cause to be pledged, at
least 65% of the capital stock of any Subsidiary thereof which is a
Foreign Material Restricted Subsidiary or becomes a Foreign Material
Restricted Subsidiary after the Closing Date, determined as of the most
recent financial statements delivered pursuant to Section 6.1 from time
to time, by executing and delivering the Foreign Material Restricted
Subsidiary Pledge Agreement, or a supplement, instrument of joinder,
and/or equivalent thereto, together with, in the case of Subsidiaries
with certificated securities, certificates representing such stock,
accompanied by appropriate undated stock powers endorsed in blank (or
other means of perfection of a security interest in such securities
acceptable to the Administrative Agent), together with documents and
opinions of the type referred to in Sections 4.1(b) and (c) with
respect to such Pledgor, and any filings or additional actions
necessary or desirable, in the opinion of the Administrative Agent, to
perfect or maintain perfection in such collateral, all in form and
substance reasonably satisfactory to the Administrative Agent and its
legal counsel. The opinion of counsel shall confirm, among other
things, that (i) the Foreign Material Restricted Subsidiary Pledge
Agreement, or supplement and/or instrument of joinder thereto, is
effective to create, in favor of the Administrative Agent for the
benefit of itself and the Banks, a legal, valid and enforceable
security interest in all of the Collateral described therein; (ii) the
Lien of the Foreign Material Restricted Subsidiary Pledge Agreement or
supplement and/or instrument of joinder thereto constitutes a
perfected, first priority security interest in all right, title and
interest of the Pledgor(s) in the Collateral described therein, prior
and superior to all other Liens and interests except as disclosed
therein, (iii) the execution, delivery and performance of the Foreign
Material Restricted Subsidiary Pledge Agreement or supplement and/or
instrument of joinder thereto by such Subsidiary will not violate any
law, decree or judgment to which such Subsidiary is a party or by which
its assets are bound and (iv) except as may otherwise be required to
perfect any security interest, no government approvals, consents,
registrations or filings, are required by any Subsidiary. Once the
stock of a Subsidiary has been pledged, it shall remain pledged so long
as it is a Restricted Subsidiary even if its assets or Cash Flow
calculated at any subsequent date would no longer qualify it as a
Foreign Material Restricted Subsidiary.
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"6.15 YEAR 2000 COMPLIANCE. The Company will promptly notify
the Administrative Agent in the event the Company discovers or
determines that any computer application (including those of its
suppliers and vendors) that is material to its or any of its Restricted
Subsidiaries' business and operations will not be Year 2000 compliant
on a timely basis, except to the extent that such failure could not
reasonably be expected to have a Material Adverse Effect."
2.14 Section 7.1 of the Agreement (Liens) is amended by deleting
"and" at the end of subsection (n); deleting the period at the end of subsection
(o) and inserting ";" in lieu thereof, and inserting the following new
subsections immediately following subsection (o) as follows:
"(p) Liens on assets of Cinemark Chile securing Indebtedness
of Cinemark Chile permitted by Section 7.5(m); and
"(q) Liens on assets of Cinemark de Mexico and Cinemark Mexico
(USA) securing Intercompany Subordinated Indebtedness owing to the
Company in an aggregate principal amount not exceeding $12,000,000."
2.15 Subsections (b) and (c) of Section 7.3 of the Agreement
(Consolidation and Mergers) are amended and restated in their entirety as
follows:
"(a) any Restricted Subsidiary of the Company may merge with
(i) the Company provided that the Company shall be the continuing or
surviving corporation, (ii) with any one or more Restricted
Subsidiaries of the Company, and (iii) with any joint ventures,
partnerships and other Persons so long as such joint ventures,
partnerships and other Persons will, as a result of making such
Investment and all other contemporaneous related transactions, become a
Restricted Subsidiary of the Company; provided that when any
Wholly-Owned Restricted Subsidiary is merging into another Restricted
Subsidiary, the Wholly-Owned Restricted Subsidiary shall be the
continuing or surviving Person; and
"(b) any Restricted Subsidiary of the Company may sell all or
substantially all of its assets (upon voluntary liquidation or
otherwise), to the Company or any of its Restricted Subsidiaries;
provided that when any Wholly-Owned Restricted Subsidiary is selling
all or substantially all of its assets to another Restricted
Subsidiary, the Restricted Subsidiary acquiring such assets shall be a
Wholly-Owned Restricted Subsidiary."
2.16 The following subsections of Section 7.4 of the Agreement
(Investments) are amended and restated in their entirety as follows:
"(j) to the extent permitted under the Senior Subordinated
Note Indentures, additional Investments in Cinemark International or
its Unrestricted Subsidiaries not exceeding an amount equal to (i)
$75,000,000 in the aggregate from the Closing Date plus (ii) any net
reduction in Investments made pursuant to this subsection (q) after the
Closing Date; provided that such additional Investments shall not
exceed $50,000,000 in
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the aggregate from the Closing Date through December 31, 1998; such
Investments to be valued at the time made;"
"(o) additional Investments in an amount equal to Restricted
Payments that could be made, but have not been made, under (i) Section
7.10(f) or Section 7.10(g) to the extent the capital stock, capital
contribution or other Investment described therein was issued or made
after the Closing Date, or (ii) Section 7.10(h)"
"(q) additional Investments in an aggregate amount not
exceeding an amount equal to (i) $10,000,000 in the aggregate from the
Closing Date plus (ii) any net reduction in Investments made pursuant
to this subsection (q) after the Closing Date."
2.17 Section 7.5 of the Agreement (Limitation on Indebtedness) is
amended by deleting "and" at the end of subsection (j), deleting the period at
the end of subsection (k) and inserting ";" in lieu thereof, and inserting
subsections (l) and (m) immediately following subsection (k) as follows:
"(l) obligations of Cinemark Mexico (USA) under the Cinemark
Mexico (USA) Credit Agreement and obligations and Contingent
Obligations of the Company arising under the Cinemark Mexico (USA)
Guaranty, not exceeding, in the aggregate, $30,000,000 for principal,
together with interest and other amounts described therein; and
"(m) obligations of Cinemark Chile not exceeding $25,000,000
in aggregate principal amount outstanding at any time."
2.18 Section 7.9(b) of the Agreement (Lease Obligations) is amended
and restated in its entirety as follows:
"(b) Operating Leases entered into or assumed by the Company
or any of its Restricted Subsidiaries after the Closing Date in the
ordinary course of business,
"(c) leases constituting Excluded Dispositions; and
"(d) Capital Leases of furniture, fixtures and equipment not
exceeding $2,500,000 in aggregate amount since the Closing Date."
2.19 Section 7.10(g) of the Agreement (Restricted Payments) is
amended by deleting ", or" at the end of subsection (ii), inserting ";" in lieu
thereof and amending and restating subsection (iii) in its entirety as follows:
"(iii) an amount equal to any net reduction in
Investments in other than Restricted Subsidiaries made after
the Closing Date resulting from payments of
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principal of indebtedness owing to the Company or its
Restricted Subsidiaries, return of capital and other transfers
of assets related to such Investments; and
"(iv) an amount equal to the net reduction in
Investments in Unrestricted Subsidiaries made after the
Closing Date resulting from the designation of any
Unrestricted Subsidiary as a Restricted Subsidiary;"
2.20 Section 7.16 of the Agreement (Limitations on Payments) is
amended and restated in its entirety as follows::
"7.16 LIMITATIONS ON PAYMENTS. The Company shall not, and
shall not suffer or permit any of its Restricted Subsidiaries to, agree
to any restriction or limitation on the upstreaming of payments from
any Restricted Subsidiary to the Company except:
"(a) restrictions on Cinemark Chile upstreaming payments
contained in the terms and conditions of indebtedness of Cinemark Chile
permitted by Section 7.5(m), to the extent such payments would cause
Cinemark Chile to default under financial covenants contained therein;
and
"(b) immaterial amounts in the ordinary course of business."
2.21 Section 7.17 of the Agreement (Limitation on Negative Pledges)
is amended by deleting "and" at the end of subsection (a), deleting the period
at the end of subsection (b) and inserting ";" in lieu thereof, and inserting
the following new subsections immediately following subsection (b) as follows:
"(c) restrictions on assets of Cinemark Mexico (USA) and its
Subsidiaries contained in the Cinemark Mexico (USA) Credit Agreement;
"(d) restrictions on assets of Cinemark Chile in connection
with Indebtedness of Cinemark Chile permitted by Section 7.5(m); and
"(e) restrictions on assets of Cinemark de Mexico in
connection with Indebtedness of Cinemark de Mexico permitted by Section
7.1(q)."
2.22 Section 8.1 of the Agreement is amended by deleting the period
at the end of subsection (p) and inserting "; or" in lieu thereof, and inserting
a new subsection (q) immediately following subsection (p) as follows:
"(q) DEFAULT UNDER CINEMARK MEXICO (USA) CREDIT AGREEMENT. Any
Event of Default (as defined in the Cinemark Mexico (USA) Credit
Agreement) shall have occurred and is continuing beyond any applicable
grace period contained therein."
2.23 Schedule 5.13 to the Agreement (Subsidiaries) is amended and
restated in its entirety in the form attached hereto as Schedule 5.13 hereto.
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2.24 A new Exhibit C-3 (Form of Foreign Material Restricted
Subsidiary Pledge Agreement) is inserted in the Agreement in the form attached
hereto as Exhibit C-3 hereto.
2.25 Exhibit A to Exhibit F to the Agreement (Guaranty) is amended
and restated in its entirety in the form attached hereto as Exhibit A to Exhibit
F hereto.
2.26 A new Exhibit G (Cinemark Mexico (USA) Guaranty) is inserted
in the Agreement in the form attached hereto as Exhibit G hereto.
2.27 A new Exhibit H (Intercompany Subordination Agreement) is
inserted in the Agreement in the form attached hereto as Exhibit H hereto.
3. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to Banks and Administrative Agent that, on and as of the date hereof,
and after giving effect to this Second Amendment:
3.1 AUTHORIZATION. The execution, delivery and performance of this
Second Amendment have been duly authorized by all necessary corporate action by
the Company and this Second Amendment has been duly executed and delivered by
the Company.
3.2 BINDING OBLIGATION. This Second Amendment is the legal, valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally or by equitable principles relating to enforceability.
3.3 NO LEGAL OBSTACLE TO SECOND AMENDMENT. The execution, delivery
and performance of this Second Amendment will not (a) contravene the terms of
the Company's certificate of incorporation, by-laws or other organization
document; (b) conflict with or result in any breach or contravention of the
provisions of any contract to which the Company is a party, or the violation of
any law, judgment, decree or governmental order, rule or regulation applicable
to the Company, or result in the creation under any agreement or instrument of
any security interest, lien, charge, or encumbrance upon any of the assets of
the Company. No approval or authorization of any governmental authority is
required to permit the execution, delivery or performance by the Company of this
Second Amendment, or the transactions contemplated hereby.
3.4 INCORPORATION OF CERTAIN REPRESENTATIONS. The representations
and warranties of the Company set forth in Section 5 of the Agreement are true
and correct in all respects, except as to such representations made as of an
earlier specified date.
3.5 DEFAULT. No Default or Event of Default under the Agreement
has occurred and is continuing.
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4. CONDITIONS, EFFECTIVENESS. The effectiveness of this Second
Amendment shall be subject to the compliance by the Company with its agreements
herein contained, and to the delivery of the following to the Administrative
Agent in form and substance satisfactory to the Administrative Agent:
4.1 AUTHORIZED SIGNATORIES. A certificate, signed by the Secretary
or an Assistant Secretary of the Company dated the date hereof, as to the
incumbency of the person or persons authorized to execute and deliver this
Second Amendment and any instrument or agreement required hereunder on behalf of
the Company.
4.2 CINEMARK MEXICO (USA) AS A DIRECT SUBSIDIARY OF COMPANY;
DESIGNATION OF CINEMARK MEXICO (USA) AND ITS SUBSIDIARIES AS RESTRICTED
SUBSIDIARIES. Evidence that (a) Cinemark Mexico (USA) is a direct Subsidiary of
the Company and (b) the Board of Directors of the Company has designated
Cinemark Mexico (USA) and its Subsidiaries as Restricted Subsidiaries, together
with a certificate of the type described in the definition of "Restricted
Subsidiaries" in Section 1.1 of the Agreement in connection with such
designations.
4.3 CINEMARK MEXICO (USA) AS A GUARANTOR; COMPLIANCE WITH SECTION
6.13. The Company shall have complied with Section 6.13 of the Agreement, as
amended hereby, with respect to Cinemark Mexico (USA) becoming a Guarantor,
together with evidence that Cinemark Mexico (USA) is a Domestic Material
Restricted Subsidiary.
4.4 INTERCOMPANY SUBORDINATION AGREEMENT. The Intercompany
Subordination Agreement, duly executed and delivered by the parties thereto.
4.5 OTHER EVIDENCE. Such other evidence with respect to the
Company or any other person as a Bank may reasonably request to establish the
consummation of the transactions contemplated hereby, the taking of all
corporate action in connection with this Second Amendment and the compliance
with the conditions set forth herein.
5. CONDITION SUBSEQUENT: PLEDGE OF AT LEAST 65% OF STOCK OF
CINEMARK DE MEXICO; COMPLIANCE WITH SECTION 6.14. Within 60 days of the
effectiveness of this Second Amendment, the Company shall have caused Cinemark
Mexico (USA) to have complied with Section 6.14 of the Agreement, as amended
hereby, with respect to pledging at least 65% of the Capital Stock of Cinemark
de Mexico. Failure to do so shall constitute an immediate Event of Default under
the Agreement.
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Cinemark USA Second Amendment
13
6. MISCELLANEOUS.
6.1 EFFECTIVENESS OF AGREEMENT. Except as hereby expressly
amended, the Agreement and each other Loan Document shall each remain in full
force and effect, and are hereby ratified and confirmed in all respects on and
as of the date hereof.
6.2 WAIVERS. The Administrative Agent and the Banks hereby waive
any Default or Event of Default arising by reason of a sale-leaseback of
theatres in Austin, Texas not exceeding $14,000,000 which was closed on or about
October 9, 1998. This Second Amendment is specific in time and in intent and
does not constitute, nor should it be construed as, a waiver of any other right,
power or privilege under the Agreement or under any agreement, contract,
indenture, document or instrument mentioned in the Agreement; nor does it
preclude any exercise thereof or the exercise of any other right, power or
privilege, nor shall any future waiver of any right, power, privilege or default
hereunder, or under the Agreement or any agreement, contract, indenture,
document or instrument mentioned in the Agreement, constitute a waiver of any
other default of the same or of any other term or provision.
6.3 COUNTERPARTS. This Second Amendment may be executed in any
number of counterparts and all of such counterparts taken together shall be
deemed to constitute one and the same instrument. This Second Amendment shall
not become effective until the Company, the Administrative Agent and the
Majority Banks shall have signed a copy hereof, and each Guarantor and Pledgor
shall have consented hereto, whether the same or counterparts, and the same
shall have been delivered to the Administrative Agent.
6.4 JURISDICTION. THIS SECOND AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED UNDER THE LAWS OF THE STATE OF NEW YORK.
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14
IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to be
duly executed and delivered as of the date first written above.
CINEMARK USA, INC.
By
------------------------
Xxxxxxx X. Xxxxxxx
Chief Financial Officer
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15
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, AS
ADMINISTRATIVE AGENT
By
----------------------------
Xxxxx Xxxxx
Vice President
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BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, AS ISSUING
BANK AND A BANK
By
---------------------------------
Name
-------------------------------
Title
------------------------------
S-3
Cinemark USA Second Amendment
17
NATIONSBANK, N.A.,
AS SYNDICATION AGENT AND A BANK
By
-----------------------------
Name
---------------------------
Title
--------------------------
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Cinemark USA Second Amendment
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BANKBOSTON, NA.,
AS A CO-AGENT AND A BANK
By
-----------------------------
Name
---------------------------
Title
--------------------------
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Cinemark USA Second Amendment
00
XXX XXXX XX XXXX XXXXXX,
AS A CO-AGENT AND A BANK
By
-----------------------------
Name
---------------------------
Title
--------------------------
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CIBC INC., AS A CO-AGENT AND A BANK
By
---------------------------------
Name
------------------------------
Title
------------------------------
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FLEET BANK, N.A.
AS A CO-AGENT AND A BANK
By
-----------------------------
Name
---------------------------
Title
--------------------------
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Cinemark USA Second Amendment
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THE BANK OF NEW YORK
By
-----------------------------
Name
---------------------------
Title
--------------------------
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Cinemark USA Second Amendment
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THE BANK OF MONTREAL
By
-----------------------------
Name
---------------------------
Title
--------------------------
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COMERICA BANK - TEXAS
By
-----------------------------
Name
---------------------------
Title
--------------------------
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Cinemark USA Second Amendment
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FIRST HAWAIIAN BANK
By
-----------------------------
Name
---------------------------
Title
--------------------------
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Cinemark USA Second Amendment
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THE FUJI BANK, LIMITED
By
-----------------------------
Name
---------------------------
Title
--------------------------
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Cinemark USA Second Amendment
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PNC BANK, NATIONAL ASSOCIATION
By
-----------------------------
Name
---------------------------
Title
--------------------------
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Cinemark USA Second Amendment
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THE SUMITOMO BANK, LIMITED
By
-----------------------------
Name
---------------------------
Title
--------------------------
By
-----------------------------
Name
---------------------------
Title
--------------------------
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Cinemark USA Second Amendment
00
XXXXX XXXX XX XXXXXXXXXX, N.A.
By
-----------------------------
Name
---------------------------
Title
--------------------------
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Cinemark USA Second Amendment
30
CONSENT OF PLEDGORS AND GUARANTOR
Each of the undersigned (a) Pledgors, each party to the Second Amended
and Restated Xxxxxxxx Family Pledge Agreement dated as of February 12, 1998, and
(b) Guarantor, as guarantor under the Guaranty dated as of February 12, 1998,
hereby consents to the foregoing Second Amendment to Credit Agreement, and
represents and warrants to the Administrative Agent and the Banks that there is
no defense, counterclaim or offset of any type or nature under the Pledge
Agreement or the Guaranty, and that the same remain in full force and effect as
to it after giving effect hereto and thereto. By signing below, the undersigned
also agree that the Guaranty is amended as set forth in Section 2.3 of the
Second Amendment and that CGI Equities Ltd. (not CGI Investments LLC) is a party
to the Pledge Agreement and consented to the First Amendment to Second Amended
and Restated Credit Agreement. All terms used herein shall have the same
meanings as in the Credit Agreement referred to in the Second Amendment unless
otherwise defined herein.
PLEDGORS:
------------------------------- ------------------------------------------
Xxx Xxx Xxxxxxxx Xxxxx XXxxxxxx, Spouse of Xxx Xxx Xxxxxxxx
XXXXXXXX SPECIAL TRUST XXXXXXXX GRANDCHILDREN TRUST
FOR XXXXXXX XXX XXXXXXX
XXXXXXXX GRANDCHILDREN TRUST XXXXXXXX GRANDCHILDREN TRUST
FOR CASSIE XXX XXXXXXX FOR XXXXXX XXXX XXXXXXXX
XXXXXXXX GRANDCHILDREN TRUST XXXXXXXX GRANDCHILDREN TRUST
FOR ASHLEY XXX XXX FOR LASEY XXXXX XXX
By
--------------------------------
Trustee
By
--------------------------------
Trustee
CGI EQUITIES, LTD., GUARANTOR:
a Texas limited partnership
CINEMARK PROPERTIES, INC.,
GUARANTOR
By: CGI INVESTMENTS, LLC, a Texas
limited liability company, its general By:
partner ------------------------
Name:
By: ----------------------
-------------------------------- Title:
Name: ---------------------
------------------------------
Title: ,
-----------------------------
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Cinemark USA Second Amendment
31
SCHEDULE 5.13
SUBSIDIARIES
ORGANIZATIONAL CHART SHOWING PRINCIPAL SUBSIDIARIES
[GRAPHIC OMITTED]
LIST OF SUBSIDIARIES
(to come)
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Cinemark USA Second Amendment
32
EXHIBIT G
CINEMARK USA GUARANTY
(GUARANTY OF CINEMARK MEXICO (USA))
TO: Bank of America National Trust and Savings
Association, as Administrative Agent (the "Administrative Agent")
PRELIMINARY STATEMENTS:
A. Reference is made to that certain 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 "Company"), the Banks party thereto and Bank of America
National Trust and Savings Association, as Administrative Agent (in such
capacity, the "Administrative Agent") for said Banks.
B. Guarantor is the ultimate shareholder of the Company and has
derived, and expects to continue deriving, direct and indirect benefits from
extensions of credit made to the Company, and now desires to guaranty the
Obligations.
C. It is a requirement of the Credit Agreement that Guarantor execute
and deliver this Guaranty.
NOW, THEREFORE, Guarantor agrees as follows:
1. For valuable consideration, the undersigned (the "Guarantor")
unconditionally, absolutely and irrevocably guarantees and promises to pay to
the Administrative Agent, or order, on demand, in lawful money of the United
States and in immediately available funds, any and all present or future
Obligations owing to the Banks, the Administrative Agent and the Syndication
Agent (collectively, the "Guarantied Parties"). The term Obligations has the
meaning assigned to such term under the Credit Agreement and is used herein in
its most comprehensive sense and includes any and all advances, debts,
obligations, and liabilities of the Company, now, or hereafter made, incurred,
or created, whether voluntary or involuntarily, and however arising, including,
without limitation, any and all reasonable attorneys' fees (including the
allocated cost of inhouse counsel), costs, premiums, charges, or interest owed
by the Company to the Guarantied Parties, whether due or not due, absolute or
contingent, liquidated or unliquidated, determined or undetermined, whether the
Company may be liable individually or jointly with others, whether recovery upon
such indebtedness may be or hereafter becomes barred by any statute of
limitations or whether such indebtedness may be or hereafter become otherwise
unenforceable.
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33
2. This Guaranty is a continuing guaranty which relates to any
Obligations, including those which arise under successive transactions which
shall either cause the Company to incur new Obligations, continue the
Obligations from time to time, or renew them after they have been satisfied.
Guarantor agrees that nothing shall discharge or satisfy its obligations created
hereunder except for the full payment of the Obligations. Any payment by
Guarantor shall not reduce its maximum obligation hereunder.
3. Guarantor agrees that it is directly and primarily liable to the
Administrative Agent for the benefit of the Guarantied Parties, that its
obligations hereunder are independent of the Obligations of the Company, or of
any other guarantor, and that a separate action or actions may be brought and
prosecuted against Guarantor, whether action is brought against the Company or
whether the Company is joined in any such action or actions. Guarantor agrees
that any releases which may be given by the Administrative Agent and the
Guarantied Parties to the Company or any other guarantor shall not release it
from this Guaranty.
4. The obligations of Guarantor under this Guaranty shall not be
affected, modified or impaired upon the occurrence from time to time of any of
the following, whether or not with notice to or the consent of Guarantor:
(a) the compromise, settlement, change, modification, amendment
(whether material or otherwise) or partial termination of any or all of the
Obligations;
(b) the failure to give notice to Guarantor of the occurrence of any
Event of Default under the terms and provisions of the Credit Agreement;
(c) the waiver of the payment, performance or observance of any of the
Obligations;
(d) the taking or omitting to take any actions referred to in any Loan
Document or of any action under this Guaranty;
(e) any failure, omission or delay on the part of the Administrative
Agent and/or the Guarantied Parties to enforce, assert or exercise any right,
power or remedy conferred in this Guaranty, the Credit Agreement, any other Loan
Document or any other indulgence or similar act on the part of the
Administrative Agent and/or the Guarantied Parties in good faith and in
compliance with applicable law;
(f) the voluntary or involuntary liquidation, dissolution, sale or
other disposition of all or substantially all of the assets, marshalling of
assets, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors or readjustment of, or other similar proceedings which affect
Guarantor, any other guarantor of any of the Obligations of the Company or any
of the assets of any of them, or any allegation of invalidity or contest of the
validity of this Guaranty in any such proceeding;
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Cinemark USA Guaranty of Cinemark Mexico (USA)
34
(g) to the extent permitted by law, the release or discharge of any
other guarantors of the Obligations from the performance or observance of any
obligation, covenant or agreement contained in any guaranties of the Obligations
by operation of law; or
(h) the default or failure of any other guarantors of the Obligations
fully to perform any of their respective obligations set forth in any such
guaranties of the Obligations.
To the extent any of the foregoing refers to any actions which the
Administrative Agent or the Guarantied Parties may take, Guarantor hereby agrees
that the Administrative Agent and/or the Guarantied Parties may take such
actions in such manner, upon such terms, and at such times as the Administrative
Agent or the Guarantied Parties, in their discretion, deem advisable, without,
in any way or respect, impairing, affecting, reducing or releasing Guarantor
from its undertakings hereunder and Guarantor hereby consents to each and all of
the foregoing actions, events and occurrences.
5. Guarantor hereby waives:
(a) any and all rights to require the Administrative Agent or the
Guarantied Parties to prosecute or seek to enforce any remedies against the
Company or any other party liable to the Administrative Agent or the Guarantied
Parties on account of the Obligations;
(b) any right to assert against the Administrative Agent or the
Guarantied Parties any defense (legal or equitable), set-off, counterclaim, or
claim which Guarantor may now or at any time hereafter have against the Company
or any other party liable to the Administrative Agent or the Guarantied Parties
in any way or manner under the Credit Agreement;
(c) all defenses, counterclaims and off-sets of any kind or nature,
arising directly or indirectly from the present or future lack of perfection,
sufficiency, validity or enforceability of any Loan Document and the security
interest granted pursuant thereto;
(d) any defense arising by reason of any claim or defense based upon an
election of remedies by the Administrative Agent or the Guarantied Parties
including, without limitation, any direction to proceed by judicial or
nonjudicial foreclosure or by deed in lieu thereof, which, in any manner
impairs, affects, reduces, releases, destroys or extinguishes Guarantor's
subrogation rights, rights to proceed against the Company for reimbursement, or
any other rights of Guarantor to proceed against the Company, against any other
guarantor, or against any other security, with Guarantor understanding that the
exercise by the Administrative Agent and/or the Guarantied Parties of certain
rights and remedies may offset or eliminate Guarantor's right of subrogation
against the Company, and that Guarantor may therefore incur partially or totally
non-reimbursable liability hereunder;
(e) all presentments, demands for performance, notices of
non-performance, protests, notices of protest, notices of dishonor, notices of
default, notice of acceptance of this Guaranty,
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Cinemark USA Guaranty of Cinemark Mexico (USA)
35
and notices of the existence, creation, or incurring of new or additional
indebtedness, and all other notices or formalities to which Guarantor may be
entitled; and
(f) without limiting the generality of the foregoing, Guarantor hereby
expressly waives any and all benefits of California Civil Code Sections 2809,
2810, 2819, 2825, 2839 and 2845 through 2850.
6. Guarantor hereby agrees that unless and until all Obligations have
been paid to the Administrative Agent and the Guarantied Parties in full, it
shall not have any rights of subrogation, reimbursement or contribution as
against the Company or any other guarantor, if any, and shall not seek to assert
or enforce the same. Guarantor understands that the exercise by Administrative
Agent of certain rights and remedies contained in the Loan Documents may affect
or eliminate Guarantor's right of subrogation if any, against the Company and
that Guarantor may therefore incur a partially or totally non-reimbursable
liability hereunder; nevertheless, Guarantor hereby authorizes and empowers the
Administrative Agent and the Guarantied Parties to exercise, in their sole
discretion, any right and remedy, or any combination thereof, which may then be
available, since it is the intent and purpose of Guarantor that the obligations
hereunder shall be absolute, independent and unconditional under any and all
circumstances.
7. Guarantor is presently informed of the financial condition of the
Company and of all other circumstances which a diligent inquiry would reveal and
which bear upon the risk of nonpayment of the Obligations. Guarantor hereby
covenants that it will continue to keep itself informed of the financial
condition of the Company, the status of other guarantors, if any, and of all
other circumstances which bear upon the risk of nonpayment. Guarantor hereby
waives its right, if any, to require the Administrative Agent or the Guarantied
Parties to disclose to it any information which the Administrative Agent or any
Bank may now or hereafter acquire concerning such condition or circumstances
including, but not limited to, the release of any other guarantor.
8. The Administrative Agent and each Bank's books and records
evidencing the Obligations shall be admissible in any action or proceeding and
shall be binding upon the Guarantor for the purpose of establishing the terms
set forth therein and shall constitute prima facie proof thereof.
9. Guarantor represents and warrants that:
(a) Guarantor: (i) is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation;
(ii) has the power and authority and all governmental licenses, authorizations,
consents and approvals to own its assets, carry on its business and execute,
deliver, and perform its obligations under, the Loan Documents; (iii) is duly
qualified as a foreign corporation, licensed and in good standing under the laws
of each jurisdiction where its ownership, lease or operation of property or the
conduct of its business requires such qualification; and (iv) is in compliance
with all Requirements of Law; except, in
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Cinemark USA Guaranty of Cinemark Mexico (USA)
36
each case referred to in clause (ii), (iii) or clause (iv), to the extent that
the failure to do so could not reasonably be expected to have a Material Adverse
Effect.
(b) The execution, delivery and performance by Guarantor of this
Guaranty have been duly authorized by all necessary corporate action, and do not
and would not be expected to: (i) contravene the terms of any of Guarantor's
articles of incorporation, bylaws or other organization documents; (ii) conflict
with or result in any breach or contravention of, or the creation of any Lien
under, any document evidencing any Contractual Obligation to which Guarantor is
a party or any order, injunction, writ or decree of any Governmental Authority
to which Guarantor or its Property is subject; or (iii) violate any Requirement
of Law.
(c) No approval, consent, exemption, authorization, or other action by,
or notice to, or filing with, any Governmental Authority is necessary or
required in connection with the execution, delivery or performance by, or
enforcement against, Guarantor of the Guaranty, except for routine corporate
filings to maintain the corporate good standing of Guarantor.
(d) This Guaranty constitutes the legal, valid and binding obligations
of Guarantor, enforceable against Guarantor in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy, insolvency, or
similar laws affecting the enforcement of creditors' rights generally or by
equitable principles relating to enforceability.
(e) There is no action, suit or proceeding pending against, or to the
knowledge of Guarantor, threatened against or affecting Guarantor, before any
court or arbitrator or any governmental body, agency or official which in any
manner draws into question the validity or enforceability of this Guaranty; and
(f) The execution, delivery and performance by Guarantor of this
Guaranty does not constitute, to the best knowledge of Guarantor, a "fraudulent
conveyance," "fraudulent obligation" or "fraudulent transfer" within the
meanings of the Uniform Fraudulent Conveyances Act or Uniform Fraudulent
Transfer Act, as enacted in any jurisdiction.
10. All notices and other communications hereunder shall be delivered,
in the manner and with the effect provided in the Credit Agreement and, in the
case of the Guarantor, in care of the Company.
11. This Guaranty shall be binding upon the successors and assigns of
Guarantor and shall inure to the benefit of the Administrative Agent's and the
Guarantied Parties' successors and assigns. This Guaranty cannot be assigned by
Guarantor without the prior written consent of the Administrative Agent and the
Guarantied Parties which shall be in the Administrative Agent's and the
Guarantied Parties' sole and absolute discretion.
12. No failure or delay by the Administrative Agent or the Guarantied
Parties in exercising any right, power or privilege hereunder shall operate as a
waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of
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Cinemark USA Guaranty of Cinemark Mexico (USA)
37
any other right, power or privilege. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by law.
13. The Guarantor shall pay (a) all reasonable out-of-pocket expenses
of the Administrative Agent and the Guarantied Parties, including reasonable
fees and disbursements of counsel (including the allocated cost of inhouse
counsel and staff) for the Administrative Agent, in connection with any waiver
or consent hereunder or any amendment hereof and (b) all out-of-pocket expenses
incurred by the Administrative Agent and the Guarantied Parties, including fees
and disbursements of counsel (including the allocated cost of inhouse counsel
and staff), in connection with the enforcement of this Guaranty (whether or not
suit is brought).
14. No modification of this Guaranty shall be effective for any purpose
unless it is in writing and executed by an officer of the Administrative Agent
authorized to do so. This Guaranty merges all negotiations, stipulations and
provisions relating to the subject matter of this Guaranty which preceded or may
accompany the execution of this Guaranty.
15. THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF
THE STATE OF NEW YORK WITHOUT REFERENCE TO THE PRINCIPLES OF CONFLICTS OF LAWS
THEREOF.
16. This Guaranty may be executed in any number of counterparts and by
the different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument.
17. Terms not defined herein shall have the meanings assigned to them
in the Credit Agreement.
18. Any indebtedness of the Company now or hereafter held by Guarantor
is hereby subordinated to the indebtedness of the Company to the Administrative
Agent and the Guarantied Parties; and such indebtedness of the Company to
Guarantor if the Administrative Agent so requests shall be collected, enforced
and received by Guarantor as trustee for the Administrative Agent and the
Guarantied Parties and be paid over to the Administrative Agent on account of
the indebtedness of the Company to the Administrative Agent and the Guarantied
Parties but without reducing or affecting in any manner the liability of
Guarantor under the other provisions of this guaranty.
20. It is not necessary for the Guarantied Parties to inquire into the
powers of the Company or of the officers, directors or agents acting or
purporting to act on its behalf, and any indebtedness made or created in
reliance upon the professed exercise of such powers shall be guaranteed
hereunder.
DATED AS OF:
-------------------------
CINEMARK USA, INC.
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38
By
-----------------------------
Name
---------------------------
Title
--------------------------
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, AS
ADMINISTRATIVE AGENT
By
----------------------------
Xxxxx Xxxxx
Vice President
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EXHIBIT C-3 TO SECOND AMENDMENT
FORM OF FOREIGN MATERIAL RESTRICTED
SUBSIDIARY PLEDGE AGREEMENT
THIS FOREIGN MATERIAL RESTRICTED SUBSIDIARY PLEDGE AGREEMENT (this
"Agreement"), dated as of , is executed by the undersigned Pledgors
(collectively, the "Pledgor") for the benefit of BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION as agent (in such capacity herein called the
"Administrative Agent") for itself and each Bank (as hereinafter defined) in its
capacity as a lender under the Credit Agreement referred to below and as a
counterparty under any Swap Contract (the Administrative Agent and each Bank in
such capacities are referred to herein collectively as the "Secured Parties").
RECITALS
A. Cinemark USA, Inc., a Delaware corporation (the "Company"), the
banks signatories thereto (such banks, and other banks from time to time
signatory thereto and banks from time to time purchasing a participation in a
signatory bank's interest therein, together with any Bank or any Affiliate of
any Bank in its capacity as a counterparty under any Swap Contract,
collectively, the "Banks" and individually a "Bank"), the Administrative Agent,
NationsBank, N.A. as Syndication Agent, and BankBoston, N.A., The Bank of Nova
Scotia, CIBC Inc. and Fleet Bank, N.A., as Co-Agents, have entered into a Second
Amended and Restated Reducing Revolving Credit Agreement dated as of February
12, 1998 (as amended, supplemented, restated or otherwise modified from time to
time, the "Credit Agreement"), subject to and upon the condition, among others,
that the Pledgor executes this Agreement in favor of the Secured Parties.
B. From time to time a Bank, in its capacity as a counterparty, may
enter into one or more Swap Contracts with the Company, and the parties hereto
desire that the obligations of the Company under any such Swap Contracts be
secured hereby.
C. It is a condition precedent to the continuation of the Credit
Extensions by the Banks under the Credit Agreement that the Pledgor shall have
granted the security interest contemplated by this Agreement and the Secured
Parties are relying on the undertakings of the Pledgor contained herein.
D. Terms defined and the rules of construction in the Credit Agreement
have, unless the context otherwise requires, the same meanings in this
Agreement.
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Foreign Material Restricted Subsidiary Pledge Agreement
40
NOW, THEREFORE, the parties hereto agree as follows:
1. GRANT OF SECURITY INTEREST.
(a) As security for the payment or performance when due (whether at
stated maturity, by acceleration or otherwise) of the Obligations to any Secured
Party, now existing or hereafter arising, the Pledgor hereby pledges, assigns
and transfers to the Administrative Agent for purposes of security and for the
equal benefit of the Secured Parties, and hereby grants to the Administrative
Agent for the equal benefit of the Secured Parties, a lien on, and security
interest in, all of the Pledgor's right, title and interest in, to and under the
following, whether now or hereafter existing and whether now owned or hereafter
acquired (collectively, the "Collateral"):
(i) all shares of each Subsidiary (each, a "Pledged
Subsidiary" and collectively, the "Pledged Subsidiaries ") as set forth
on Schedule 1 (collectively, the "Pledged Shares");
(ii) all additional shares of stock of the Pledged
Subsidiaries from time to time acquired by the Pledgor in any manner;
(iii) the certificates representing the shares referred to
in paragraphs (i) and (ii) above; and
(iv) all dividends, cash, instruments and other property or
proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the shares
referred to in paragraphs (i) and (ii) above (all of the foregoing
being the "Proceeds"); provided, however, that so long as no Event of
Default has occurred and is continuing, the Pledgor may receive free
and clear of any security interest under this Agreement any cash
dividends paid in respect of the Pledged Shares;
provided, however, that at no time shall the Pledged Shares be required to
constitute more than 65% of the total capital stock of any Pledged Subsidiary..
(b) All certificates or instruments representing or evidencing the
Collateral shall be delivered to and held by or on behalf of the Administrative
Agent pursuant hereto and shall be in suitable form for transfer by delivery, or
shall be accompanied by duly executed undated instruments of transfer or
assignment in blank, all in form and substance satisfactory to the
Administrative Agent. If an Event of Default has occurred and is continuing, the
Administrative Agent shall have the right, at any time in its discretion and
without notice to the Pledgor, to transfer to or to register in its name or any
of its nominees any or all of the Collateral, subject only to the revocable
rights specified in Section 6(a). In addition, if an Event of Default has
occurred and is continuing, the Administrative Agent shall have the right at any
time to exchange certificates or instruments representing or evidencing
Collateral for certificates or instruments of smaller or larger denominations.
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Foreign Material Restricted Subsidiary Pledge Agreement
41
2. SECURITY FOR OBLIGATIONS. This Agreement secures, in accordance
with the provisions hereof, the payment by the Company of all of the Obligations
to any Secured Party under any Loan Document, including under any Swap Contract,
and all obligations of the Pledgor under this Agreement, in each case now
existing or hereafter arising. The Collateral shall secure the Obligations owing
to the Secured Parties equally and ratably.
3. REPRESENTATIONS AND WARRANTIES. The Pledgor represents and warrants
as follows:
(a) The chief place of business and chief executive office of Pledgor
and the office where the Pledgor keeps its records concerning the Collateral
(hereinafter, "Records") is located at the address for notices for the Pledgor
as provided in Section 18(g).
(b) The Pledged Shares owned by the Pledgor have been duly authorized
and validly issued and are fully paid and nonassessable.
(c) The Pledged Shares constitute at least 65% of the issued and
outstanding shares of stock or equity interests of the Pledged Subsidiaries as
of the date hereof. There are no existing options, warrants, shareholder
agreements, calls or commitments of any character whatsoever relating to any of
the Pledged Shares owned by the Pledgor except as listed on Schedule 3.
(d) No effective financing statement or other instrument similar in
effect covering all or any part of the Collateral owned by the Pledgor is on
file in any recording office, except as may have been filed pursuant to this
Agreement.
(e) The Pledgor is lawfully possessed of ownership of the Collateral
owned by the Pledgor which exists on the date hereof, and has full power and
lawful authority to grant the Liens in and on the Collateral hereunder.
(f) This Agreement creates in favor of the Administrative Agent, for
the equal benefit of the Secured Parties, a valid and enforceable Lien on the
Pledged Shares owned by the Pledgor, subject to no Liens, securing the payment
and performance of the Obligations, and all filings and other actions necessary
to perfect such Lien with the priority described herein and in Section 5.13(c)
of the Credit Agreement have been duly made or taken.
(g) The Pledgor is duly organized and existing under the laws of the
jurisdiction of its respective incorporation, and are properly licensed and in
good standing in, and where necessary to maintain their respective rights and
privileges has complied with the fictitious name statute of, every jurisdiction
in which they are doing business, except where the failure to be licensed or be
in good standing or comply with any such statute will not have a material
adverse effect on the ability of the Pledgor to perform its obligations
hereunder or under any instrument or agreement required hereunder.
(h) The execution, delivery and performance of this Agreement and any
instrument or agreement required hereunder are within the corporate power of the
Pledgor, have been duly
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authorized by, and are not in conflict with the terms of any charter, by-laws,
trust instrument or other organization papers, as applicable, of, the Pledgor.
(i) No approval, consent, exemption or other action by, or notice to or
filing with, any governmental authority is necessary in connection with the
execution, delivery, performance or enforcement by the Pledgor of this Agreement
or any instrument or agreement required hereunder, except as may have been
obtained and certified copies of which have been delivered to Administrative
Agent.
(j) There is no law, rule or regulation, nor is there any judgment,
decree or order of any court or governmental authority binding on the Pledgor,
which would be contravened by the execution, delivery, performance or
enforcement by the Pledgor of this Agreement or any instrument or agreement
required hereunder.
(k) This Agreement is a legal, valid and binding agreement of the
Pledgor, enforceable against the Pledgor in accordance with its terms, and any
instrument or agreement required hereunder, when executed and delivered, will be
similarly legal, valid, binding and enforceable, except where enforceability
thereof may be limited by applicable law relating to bankruptcy, insolvency,
moratorium or other similar laws affecting creditors' rights generally or by the
application of general principles of equity.
(l) There is no action, suit or proceeding pending against, or to the
knowledge of the Pledgor, threatened against or affecting the Pledgor, before
any court or arbitrator or any governmental body, agency or official which in
any manner draws into question the validity or enforceability of this Agreement.
(m) The execution, delivery and performance by the Pledgor of this
Agreement do not and would not be expected to conflict with or result in any
breach or contravention of, or the creation of any Lien under, any document
evidencing any Contractual Obligation to which the Pledgor is a party.
4. FURTHER ASSURANCES; SUPPLEMENTS.
(a) The Pledgor agrees that from time to time, at the expense of such
Person, it will promptly execute and deliver all further instruments and
documents, and take all further action that may be necessary or desirable, or
that the Administrative Agent may reasonably request, in order to perfect the
Liens granted or purported to be granted hereby or to enable the Administrative
Agent to exercise and enforce its rights and remedies hereunder. Without
limiting the generality of the foregoing, the Pledgor will execute and deliver
to Administrative Agent such financing or continuation statements, or amendments
thereto, and such other instruments, endorsements or notices, as may be
necessary or desirable, or as the Administrative Agent may reasonably request,
in order to perfect and preserve the Liens granted or purported to be granted
hereby.
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(b) The Pledgor hereby authorizes the Administrative Agent to file one
or more financing or continuation statements, and amendments thereto, relative
to all or any part of the Collateral without the signature of the Pledgor where
permitted by law.
(c) The Pledgor shall pay all filing, registration and recording fees
or refiling, re-registration and re-recording fees, and all expenses, incident
to its execution and acknowledgement of this Agreement, any agreement
supplemental hereto and any instruments of further assurance, and all federal,
state, county and municipal stamp taxes and other taxes, duties, imposts,
assessments and charges arising out of or in connection with its execution and
delivery of this Agreement, any agreement supplemental hereto and any
instruments of further assurance.
(d) The Pledgor shall warrant and defend title to the Collateral
against the claims and demands of all Persons (other than the Secured Parties or
any Person claiming by or through any Secured Party) whomsoever.
(e) The Pledgor shall, upon obtaining any additional shares of any
Pledged Subsidiaries or any other securities constituting Collateral, , promptly
deliver to the Administrative Agent a duly executed Pledge Agreement Supplement
in substantially the form of Schedule 2 hereto (a "Pledge Agreement Supplement")
identifying the additional shares which are being pledged; provided, however
that not more than 65% of the capital stock of any Pledge Subsidiary shall be
required to be pledged hereunder. The Pledgor hereby authorizes the
Administrative Agent to attach each Pledge Agreement Supplement to this
Agreement and agrees that all shares listed on any Pledge Agreement Supplement
delivered to the Administrative Agent shall for all purposes hereunder
constitute Collateral. Upon any person pledging shares hereunder, such person
shall be deemed a Pledgor hereunder.
5. COVENANTS OF PLEDGOR.
(a) The Pledgor shall pay, before any fine, penalty, interest or cost
attaches thereto, all taxes, assessments and other governmental or
non-governmental charges or levies now or hereafter assessed or levied against
its Pledged Shares or upon the Liens provided for herein as well as pay, or
cause to be paid, all claims for labor, materials or supplies which, if unpaid,
might by law become a Lien (other than a Permitted Lien) thereon, and will
retain copies of, and, upon request, permit the Administrative Agent or any
other Secured Party to examine, receipts showing payment of any of the
foregoing; provided, that Pledgor shall not be required to pay any such tax,
assessment, charge or levy, the validity of which is being contested in good
faith by appropriate proceedings.
(b) The Pledgor shall give the Administrative Agent at least 30 days'
prior written notice before it changes the location of its chief executive
office or the office where it keeps the Records and shall at the expense of the
Pledgor execute and deliver such instruments and documents as required to
maintain a prior perfected security interest and as reasonably requested by the
Administrative Agent. The Pledgor will hold and preserve all Records and will,
upon
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reasonable request by the Administrative Agent or any Secured party at any time
during normal business hours, permit the Administrative Agent or any Secured
Party to inspect and make abstracts from such Records.
(c) The Pledgor shall not sell, assign (by operation of law or
otherwise) or otherwise dispose of any of the Collateral.
(d) The Pledgor shall not create or suffer to exist any Lien upon or
with respect to any of the Collateral except for the security interest created
by this Agreement or the Credit Agreement, and will defend the right, title and
interest of the Administrative Agent in and to the Pledgor's rights to the
Collateral against the claims and demands of all Persons whatsoever.
(e) The Pledgor will, upon becoming aware of such event, notify the
Administrative Agent promptly, in reasonable detail, (i) of any material claim
made or asserted against the Collateral by any Person; (ii) of any event which
could reasonably be expected to have a material adverse effect on the value of
the Collateral; (iii) of any event which could reasonably be expected to have a
material adverse effect on the ability of the Administrative Agent to dispose of
the Collateral or the rights and remedies of the Administrative Agent; and (iv)
of the occurrence of any other event which would have a material adverse effect
on the Collateral or on the security interest created hereunder.
(f) The Pledgor agrees that it will use its best efforts to cause any
Pledged Subsidiary not to issue any stock or other securities in addition to or
in substitution for the Pledged Shares except: (i) to the Pledgor, (ii) any
stock options issued to employees of such Pledged Subsidiary and any shares of
capital stock of such Pledged Subsidiary issuable upon the exercise of such
options, and (iii) shares of such Pledged Subsidiary to other stockholders of
such Pledged Subsidiary in an amount not exceeding such stockholders existing
ratable ownership interests therein.
6. VOTING RIGHTS, DIVIDENDS, ETC.
(a) So long as no Event of Default shall have occurred and be
continuing (and, in the case of paragraph (i) below, so long as written notice
has not been given by the Administrative Agent to the Pledgor):
(i) the Pledgor shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Collateral or any
part thereof for any purpose not inconsistent with the terms of this
Agreement or any Loan Documents;
(ii) the Pledgor shall be entitled to receive and retain free
and clear of any security interest under this Agreement any and all
dividends paid in respect of the Collateral, other than any and all:
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(A) instruments and other property received, receivable or
otherwise distributed in exchange for, any Collateral,
(B) dividends and other distributions paid or payable in cash
in respect of any Collateral in connection with a partial or total
liquidation or dissolution or in connection with a reduction of
capital, capital surplus or paid-in-surplus, and
(C) cash paid, payable or otherwise distributed in redemption
of, or in exchange for, any Collateral all of which shall be, and all
of which shall be forthwith delivered to the Administrative Agent to
hold as, Collateral and shall, if received by the Pledgor, be received
in trust for the benefit of the Administrative Agent, be segregated
from the other property or funds of the Pledgor, and be forthwith
delivered to the Administrative Agent as Collateral in the same form as
so received (with any necessary endorsement).
(iii) The Administrative Agent shall execute and deliver (or
cause to be executed and delivered) to the Pledgor all such proxies and
other instruments as the Pledgor may reasonably request for the purpose
of enabling the Pledgor to exercise the voting and other rights which
it is entitled to exercise pursuant to paragraph (i) above and to
receive the dividends which it is authorized to receive and retain
pursuant to paragraph (ii) above.
(b) If an Event of Default has occurred and is continuing:
(i) All rights of the Pledgor to exercise the voting and other
consensual rights which it would otherwise be entitled to exercise
pursuant to Section 6(a)(i) above shall cease upon written notice
thereof from the Administrative Agent, and all such rights shall
thereupon become vested in the Administrative Agent who shall thereupon
have the sole right to exercise such voting and other consensual
rights.
(ii) All rights of the Pledgor to receive the dividends which
it would otherwise be authorized to receive and retain pursuant to
Section 6(a)(ii) above shall cease, and all such rights shall thereupon
become vested in the Administrative Agent who shall thereupon have the
sole right to receive and hold as Collateral such dividends.
(iii) All dividends which are received by the Pledgor contrary
to the provisions of Section 6(a)(ii) shall be received in trust for
the benefit of the Administrative Agent, shall be segregated from other
funds of the Pledgor and shall be forthwith paid over to the
Administrative Agent as Collateral in the same form as so received
(with any necessary endorsement).
(c) In order to permit the Administrative Agent to exercise the voting
and other rights which it may be entitled to exercise pursuant to Section
6(a)(i) above, and to receive all dividends and distributions which it may be
entitled to receive under Section 6(a)(ii) above, the
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Pledgor shall, if necessary, upon written notice from the Administrative Agent,
from time to time during the continuance of an Event of Default execute and
deliver to the Administrative Agent appropriate dividend payment orders and
other instruments as the Administrative Agent may reasonably request.
7. ADMINISTRATIVE AGENT APPOINTED ATTORNEY-IN-FACT. The Pledgor hereby
irrevocably appoints the Administrative Agent the Pledgor's attorney-in-fact
(which appointment as attorney-in-fact shall be coupled with an interest), with
full authority to act in the place and stead of the Pledgor and in the name of
the Pledgor or otherwise, from time to time if an Event of Default has occurred
and is continuing or to the extent contemplated by Section 8 hereof in the
Administrative Agent's discretion to take any action and to execute any
instrument which the Administrative Agent may deem necessary or advisable to
accomplish the purposes of this Agreement, including, without limitation, to
ask, demand, collect, xxx for, recover, compound, receive and give acquittance
and receipts for moneys due and to become due under or in connection with the
Collateral, to receive, indorse and collect any drafts or other instruments,
documents and chattel paper in connection therewith, and to file any claims or
take any action or institute any proceedings which the Administrative Agent may
deem to be necessary or desirable for the collection thereof or to enforce
compliance with the terms and conditions of the Assigned Agreements or this
Agreement. Notwithstanding the foregoing, the Administrative Agent shall not be
obligated to exercise any right or duty as attorney-in-fact, and shall have no
duties to the Assignor in connection therewith.
8. ADMINISTRATIVE AGENT MAY PERFORM.
(a) If the Pledgor fails to perform or comply with any of its
agreements contained herein, the Administrative Agent may, as provided for by
the terms of this Agreement, itself perform or comply, or otherwise cause
performance or compliance, with such Agreement. The reasonable expenses of the
Administrative Agent incurred in connection with such performance or compliance
shall be payable by the Pledgor to the Administrative Agent and shall constitute
Obligations secured hereby; provided, that the payment to the Administrative
Agent shall be made solely through the application of proceeds in accordance
with Section 9(a) hereof. The Administrative Agent agrees to notify the Pledgor
promptly after incurring any expenses pursuant to this Section 8; provided,
however, that the failure to provide such notice shall not affect the
Administrative Agent's right to reimbursement from the Pledgor.
(b) The Administrative Agent shall use reasonable care with respect to
the Collateral in its possession or under its control. Except as set forth in
the preceding sentence, the Administrative Agent shall not have any duty as to
any Collateral in its possession or control or in the possession or control of
any agent or nominee of it or as to any income thereon or as to the preservation
of rights against parties or any other rights pertaining thereto.
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9. RIGHTS AND REMEDIES.
(a) If (i) an Event of Default shall have occurred and be continuing
and (ii) any of the Obligations shall have been declared to be, or shall have
become, due and payable, then, in addition to any other rights and remedies
provided for herein or which may otherwise be available, the Administrative
Agent may, without any further demand, advertisement or notice (except as
expressly provided for below in this Section 9(a)), exercise all the rights and
remedies of a secured party under the Uniform Commercial Code of the State of
New York (the "UCC") (whether or not the UCC applies to the affected
Collateral), and in addition: (i) may apply the moneys, if any, then held by it
as part of the Collateral, for the following purposes and in the following
order:
(1) first, to the payment of (A) all costs and expenses
relating to the sale of the Collateral and collection of amounts owing
hereunder, including reasonable attorneys' fees and disbursements and
the just compensation of the Administrative Agent for services rendered
in connection therewith or in connection with any proceeding to sell if
a sale is not completed, and (B) all charges, expenses and advances
incurred or made by the Administrative Agent in order to protect the
Lien of this Agreement or the security afforded hereby, together with
interest at the rate specified in Section 2.10(c) of the Credit
Agreement;
(2) second, to the payment in full of all of the Obligations
owed to the Secured Parties hereunder or under any Loan Document (to be
paid to the Secured Parties in accordance with the aggregate
outstanding amounts of such Obligations owed to each Secured Party);
and
(3) third, the balance, if any, shall be paid to the Pledgor
or to such other Person as shall be lawfully entitled to receive such
surplus (as determined by a court of competent jurisdiction, if such
procedure is available under applicable law);
and (ii) if there shall be no such moneys or the moneys so applied shall be
insufficient to satisfy in full all Obligations, may sell the Collateral, or any
part thereof, as hereinafter provided in this Section 9(a) and otherwise to the
fullest extent permitted by law. The Collateral may be sold in one or more
sales, at public or private sale, conducted by any officer or agent of, or
auctioneer or attorney for, the Administrative Agent, at the Administrative
Agent's place of business or elsewhere, for cash, upon credit or for other
property, for immediate or future delivery, and at such price or prices and on
such terms as the Administrative Agent shall deem appropriate. The
Administrative Agent or any other Secured Party may be the purchaser of any or
all of the Collateral so sold at a public sale and, to the extent permitted by
law, at a private sale and thereafter hold the same, absolutely free from any
right or claim of whatsoever kind, and, the obligations of the Pledgor to such
purchaser may be applied as a credit against the purchase price. The
Administrative Agent, may, in its sole discretion (in the case of Collateral
consisting of securities) or if commercially reasonable (in the case of all
other Collateral), at any such sale restrict the prospective bidders or
purchasers as to their number, nature of business and investment intention. Upon
any public or private sale the Administrative Agent shall have the
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right to deliver, assign and transfer to the purchaser thereof the Collateral so
sold. Each purchaser (including the Administrative Agent or any other Secured
Party) at any such sale shall hold the Collateral so sold, absolutely free from
any claim or right of whatsoever kind, including any equity or right of
redemption, of the Pledgor, and the Pledgor hereby specifically waives, to the
full extent it may lawfully do so, all rights of redemption, stay or appraisal
which it has or may have under any rule of law or statute now existing or
hereafter adopted. The Administrative Agent shall give the Pledgor at least ten
days' notice (which the Pledgor agrees is reasonable notification within the
meaning of Section 9-504(3) of the UCC) of any such public or private sale. Any
public sale shall be held at such time or times within ordinary business hours
as the Administrative Agent shall fix in the notice of such sale. At any such
sale the Collateral may be sold in one lot as an entirety or in separate
parcels. The Administrative Agent shall not be obligated to make any sale
pursuant to any such notice. The Administrative Agent may, without notice or
publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for such
sale, and any such sale may be made at any time or place to which the same may
be so adjourned without further notice or publication. In case of any sale of
all or any part of the Collateral on credit or for future delivery, the
Collateral so sold may be retained by the Administrative Agent until the full
selling price is paid by the purchaser thereof, but neither the Administrative
Agent nor any other Secured Party shall incur any liability in case of the
failure of such purchaser to take up and pay for the Collateral so sold, and, in
case of any such failure, such Collateral may again be sold pursuant to the
provisions hereof.
(b) Instead of exercising the power of sale provided in Section 9(a)
hereof, the Administrative Agent may proceed by a suit or suits at law or in
equity to foreclose the security interest under this Agreement and sell the
Collateral or any portion thereof under a judgment or decree of a court or
courts of competent jurisdiction.
(c) The Administrative Agent as attorney-in-fact pursuant to Section 7
hereof may, in the name and stead of the Pledgor, make and execute all
conveyances, assignments and transfers of the Collateral sold pursuant to
Section 9(a) or Section 9(b) hereof, and the Company hereby ratifies and
confirms all that the Administrative Agent, as said attorney-in-fact, shall do
by virtue hereof. Nevertheless, the Company and the Pledgor shall, if so
requested by the Administrative Agent, ratify and confirm any sale or sales by
executing and delivering to the Administrative Agent, or to such purchaser or
purchasers, all such instruments as may, in the reasonable judgment of the
Administrative Agent, be advisable for the purpose.
(d) The receipt by the Administrative Agent of the purchase money paid
at any sale made by it shall be a sufficient discharge therefor to any purchaser
of the Collateral, or any portion thereof, sold as aforesaid; and no such
purchaser (or the representatives or assigns of such purchaser), after paying
such purchase money and receiving such receipt, shall be bound to see to the
application of such purchase money or any part thereof or in any manner
whatsoever be answerable for any loss, misapplication or nonapplication of any
such purchase money, or any
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part thereof, or be bound to inquire as to the authorization, necessity,
expediency or regularity of any such sale.
(e) The Administrative Agent shall incur no liability as a result of
the sale of the Collateral, or any part thereof, at any private sale conducted
in a commercially reasonable manner. The Pledgor hereby waives, to the full
extent permitted by applicable law, any claims against the Administrative Agent
and/or any Secured Party arising by reason of the fact that the price at which
the Collateral, or any part thereof, may have been sold at a private sale was
less than the price which might have been obtained at a public sale or was less
than the aggregate amount of the Obligations, even if the Administrative Agent
accepts the first offer received which the Administrative Agent in good xxxxx
xxxxx to be commercially reasonable under the circumstances and does not offer
the Collateral to more than one offeree. To the fullest extent permitted by law,
the Pledgor shall have the burden of proving that any such sale of the
Collateral was conducted in a commercially unreasonable manner.
(f) Each and every right and remedy of the Administrative Agent shall,
to the extent permitted by law, be cumulative and shall be in addition to any
other remedy given hereunder or under the Credit Agreement or now or hereafter
existing at law or in equity or by statute.
(g) The Administrative Agent may participate in any recapitalization,
reclassification, reorganization, consolidation, redemption, stock split,
merger, or liquidation of any Pledged Subsidiary and in connection therewith
deposit or surrender control of the Collateral, accept money or other property
in exchange for the Collateral, and take such action as deemed proper by the
Administrative Agent in connection therewith, and any other money or property
received in exchange for the Collateral shall be applied to satisfy the
Obligations or held by the Administrative Agent thereafter as Collateral
pursuant to the provisions hereof.
10. SALES OF PLEDGED SHARES.
(a) If, at any time during the continuance of an Event of Default, the
Administrative Agent in its sole discretion determines that in connection with
any actual or contemplated exercise of its rights to sell the whole or any part
of the Collateral hereunder, it is necessary or advisable to effect a public
registration of all or part of the Collateral pursuant to the Securities Act of
1933, as from time to time amended (or any similar statute then in effect) (the
"Securities Act"), the Pledgor shall:
(i) prepare and file with the Securities and Exchange
Commission (the "SEC") a registration statement with respect to the
Collateral and use its reasonable best efforts to cause such
registration statement to become and remain effective;
(ii) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective and to comply with the provisions of the Securities
Act with respect to the sale or other disposition of the Collateral
covered
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by such registration statement whenever the Administrative Agent shall
desire to sell or otherwise dispose of the Collateral;
(iii) furnish to the Administrative Agent such numbers of
copies of a prospectus and a preliminary prospectus, in conformity with
the requirements of the Securities Act, and such other documents as the
Administrative Agent may request in order to facilitate the public sale
or other disposition of the Collateral by the Administrative Agent;
(iv) use its reasonable best efforts to register or qualify
the Collateral covered by such registration statement under such other
securities or blue sky laws of such jurisdictions within the United
States of America as the Administrative Agent shall request, and do
such other reasonable acts and things as may be required of it to
enable the Administrative Agent to consummate the public sale or other
disposition in such jurisdictions of the Collateral by the
Administrative Agent;
(v) otherwise use its reasonable best efforts to comply with
all applicable rules and regulations of the SEC, and make available to
its security holders, as soon as reasonably practicable an earnings
statement which shall satisfy the provisions of the Securities Act; and
(vi) do or cause to be done all such other acts as may be
necessary to make such sale of the Collateral or any part thereof valid
and binding and in compliance with applicable law.
(b) The Pledgor recognizes that, by reason of the aforementioned
requirements and certain prohibitions contained in the Securities Act and
applicable state securities laws, the Administrative Agent may, at its option,
elect not to require the Pledgor to register all or any part of the Collateral
and may therefore be compelled, with respect to any sale of all or any part of
the Collateral, to limit purchasers to those who will agree, among other things,
to acquire such securities for their own account, for investment, and not with a
view to the distribution or resale thereof. The Pledgor acknowledges and agrees
that any such sale may result in prices and other terms less favorable to the
seller than if such sale were a public sale without such restrictions and,
notwithstanding such circumstances, agrees that any such sale conducted in good
faith shall be deemed to have been made in a commercially reasonable manner. The
Administrative Agent shall be under no obligation to delay the sale of any of
the Pledged Shares for the period of time necessary to permit the Pledgor to
register such securities for public sale under the Securities Act, or under
applicable state securities laws, even if the Pledgor would agree to do so.
(c) If the Administrative Agent determines to exercise its right to
sell any or all of the Collateral, upon written request, the Pledgor shall and
shall cause, each of its Subsidiaries to, from time to time, furnish to the
Administrative Agent all such information as the Administrative Agent may
request in order to determine the number of shares and other instruments
included in
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the Collateral which may be sold by the Administrative Agent as exempt
transactions under the Securities Act and rules of the SEC thereunder, as the
same are from time to time in effect.
11. CONTINUING ASSIGNMENT AND SECURITY INTEREST; TRANSFER OF NOTES.
This Agreement shall create a continuing assignment of and security interest in
the Collateral and shall (a) remain in full force and effect until payment in
full of the Obligations and all other amounts owing to each Secured Party under
any Loan Documents and the termination or expiration of the Commitments, (b) be
binding upon the Pledgor, its successors and assigns and (c) inure, together
with the rights and remedies of the Administrative Agent hereunder, to the
benefit of the Administrative Agent and the Secured Parties and their respective
successors, transferees and assigns. Without limiting the generality of the
foregoing, any Bank may assign or otherwise transfer its rights and obligations
under any Loan Document to any other Person or entity, and such other Person or
entity shall thereupon become vested with all the benefits in respect thereof
granted to such Bank herein or otherwise, all as provided in, and to the extent
set forth in, the Loan Documents. The Pledgor may not assign or transfer any of
its rights or obligations under this Agreement without the prior written consent
of the Administrative Agent. Upon the payment in full of the Obligations and
termination of the commitments (exclusive of future, contingent or unliquidated
amounts arising under indemnity agreements), the security interest granted
hereby shall terminate and all rights to the Collateral shall revert to the
Pledgor. Upon any such termination, the Administrative Agent will, at the
Pledgor's expense, execute and deliver to the Pledgor such documents as the
Pledgor shall reasonably request to evidence such termination.
12. NO NOTICES, ETC. No Secured Party shall be under any duty or
obligation whatsoever (a) to make or give any presentments, demands for
performances, notices of nonperformance, protests, notices of protest or notices
of dishonor in connection with any Obligations or evidences of Obligations held
by Secured Parties as Collateral, or in connection with any Obligation or
evidences of Obligations which constitute in whole or in part the Obligations
secured hereunder, or (b) to give the Pledgor notice of, or to exercise any
subscription rights or privileges, any rights or privileges to exchange, convert
or redeem or any other rights or privileges relating to or affecting any
Collateral held by Secured Parties.
13. DELIVERY OF COLLATERAL. The Secured Parties may at any time cause
the Administrative Agent to deliver the Collateral or any part thereof to the
Pledgor and the receipt of the Pledgor shall be a complete and full acquittance
for the Collateral so delivered, and Secured Parties shall thereafter be
discharged from any liability or responsibility therefor.
14. PRIMARY OBLIGATION. The Pledgor acknowledges and agrees that it is
directly and primarily liable to the Secured Parties with respect to its
obligations under this Agreement, that its obligations under this Agreement are
independent of Company's obligations under the Credit Agreement, and that a
separate action or actions may be brought and prosecuted against the Pledgor to
enforce this Agreement, whether or not action is brought against the Pledgor or
whether or not the Pledgor is joined in any such action or actions. The Pledgor
acknowledges
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52
and agrees that any release which may be given by the Secured Parties to the
Pledgor shall not release the Pledgor from its obligations under this Agreement.
15. WAIVERS. The obligations of the Pledgor under this Agreement shall
not be affected, modified or impaired as a result of the occurrence from time to
time of any of the following, whether or not with notice to or the consent of
the Pledgor; (a) the compromise, settlement, change, modification, amendment
(whether material or otherwise) or partial termination of any or all of the
Obligations under any Loan Document; (b) the failure to give notice to the
Pledgor of the occurrence of any default under the terms and provisions of any
Loan Document; (c) the waiver of the payment, performance or observance of any
of Company's Obligations under any Loan Document; (d) the taking or omitting to
take any actions referred to in any Loan Document; (e) any failure, omission or
delay on the part of the Secured Parties to enforce, assert or exercise any
right, power or remedy conferred in this Agreement, any Loan Document or any
other indulgence or similar act on the part of the Secured Parties in compliance
with applicable law; or (f) the voluntary or involuntary liquidation,
dissolution, sale or other disposition of all or substantially all of the
assets, marshalling or assets, receivership, insolvency, bankruptcy, assignment
for the benefit of creditors or readjustment of, or other similar proceedings
which affect, Company or any of the assets of the Company, or any allegation of
invalidity or contest of the validity of this Agreement in any such proceeding.
The Pledgor waives any right to require any Secured Party to (a) proceed against
any person, (b) proceed against or exhaust any Collateral, (c) pursue any other
remedy in such Secured Party's power. The Pledgor hereby waives: (i) any and all
rights to require the Secured Parties to prosecute or to seek to enforce any
remedies against Company or any other party liable to the Secured Parties with
respect to Company's obligations under any Loan Document or to otherwise
mitigate the Pledgor's obligations under this Agreement; (ii) any right to
assert against the Secured Parties with respect to the Pledgor's obligations
under this Agreement any defense (legal or equitable), set-off, counterclaim, or
claim which Pledgor may now or at any time hereafter have against the Secured
Parties, Company or any other party liable to the Secured Parties in any way or
manner under any Loan Document; (iii) all defenses, counterclaims and off-sets
of any kind or nature, arising directly or indirectly from the present or future
lack of perfection, sufficiency, validity or enforceability of any Loan
Document; and (iv) all presentments, demands for performance, notices of
nonperformance, protests, notices of protest, notices of dishonor, and notices
of default in connection with any Loan Document, notice of acceptance of this
Agreement and notice of the existence, creation or incurring of new or
additional Obligations under any Loan Document, and all other notices or
formalities to which Pledgor may be entitled with respect to any Loan Document.
16. NO SUBROGATION. The Pledgor hereby agrees that unless and until all
Obligations (exclusive of future, contingent or unliquidated amounts arising
under indemnity agreements) have been paid in full to the Secured Parties, it
shall not have any rights of subrogation, reimbursement or contribution against
Company arising as a result of the performance of this Agreement, and shall not
seek to assert or enforce any such rights. The Pledgor acknowledges that the
exercise by the Secured Parties of certain rights and remedies contained in any
Loan
- C-3 -14 -
Foreign Material Restricted Subsidiary Pledge Agreement
53
Document may affect or eliminate the Pledgor's right of subrogation, if any,
against Company arising as a result of its performance of this Agreement and
that the Pledgor may therefore incur a partially or totally nonreimbursable
liability hereunder, and the Pledgor hereby agrees that the Secured Parties may
in its sole discretion exercise any such right or remedy.
17. ATTORNEYS FEES.
(a) The Pledgor agrees to pay to each Secured Party the amount of any
and all expenses, including expenses incurred by the Administrative Agent, and
the reasonable fees and expenses of its counsel (including, without limitation,
the allocated cost of in-house counsel) and of any experts, which such Secured
Party may incur in connection with (i) the custody or preservation of, or the
sale of, collection from, or other realization upon, any of the Collateral; (ii)
the exercise or enforcement of any of the rights of any Secured Party hereunder;
or (iii) the failure by the Pledgor to perform or observe any of the provisions
hereof; provided that the payment of such sums shall be made to the Secured
Parties solely through the application of proceeds in accordance with Section
9(a) hereof.
(b) The Pledgor agrees to indemnify and hold each Secured Party
harmless from and against any taxes, liabilities, claims and damages, including
attorney's fees and disbursements (including, without limitation, the allocated
cost of in-house counsel), and other expenses incurred or arising by reason of
the taking or the failure to take action by any Secured Party in respect of any
transaction effected under this Agreement or in connection with the Lien
provided for herein, including, without limitation, any taxes payable with
respect to the Collateral or in connection with any transaction contemplated by
this Agreement and any and all costs, losses, liabilities, claims, damages or
expenses incurred by any Secured Party arising out of any investigation,
litigation or other proceeding related to this Agreement or any transaction
contemplated hereby, except for the gross negligence and willful misconduct of
such Secured Party; provided, that such indemnification shall be made to the
Secured Parties solely through the application of proceeds in accordance with
Section 9(a) hereof.
(c) The obligations of the Pledgor under this Section 17 shall survive
the termination of this Agreement.
18. MISCELLANEOUS.
(a) Headings used in this Agreement are for convenience of reference
only and do not constitute part of this Agreement for any purpose.
(b) No failure on the part of the Administrative Agent or any of its
agents to exercise, and no course of dealing with respect to, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise by the Administrative Agent or
any of its agents of any right, power or remedy hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
The remedies herein are cumulative and are not exclusive of any remedies
provided by law.
- C-3 -15 -
Foreign Material Restricted Subsidiary Pledge Agreement
54
(c) If any provision hereof is invalid and unenforceable in any
jurisdiction, then, to the fullest extent permitted by law, the other provisions
hereof shall remain in full force and effect in such jurisdiction and shall be
liberally construed in favor of the Administrative Agent and the Banks in order
to carry out the intentions of the parties hereto as nearly as may be possible
and the invalidity or unenforceability of any provision hereof in any
jurisdiction shall not affect the validity or enforceability of such provision
in any other jurisdiction.
(d) The Administrative Agent may employ agents and attorneys-in-fact in
connection herewith and shall not be responsible for the negligence or
misconduct of any such agents or attorneys-in-fact selected by it in good faith.
(e) The agreements of the parties hereto are solely for the benefit of
the Secured Parties, and no Person (other than the parties hereto and the
Secured Parties) shall have any rights hereunder.
(f) No amendment or waiver of any provision of this Agreement nor
consent to any departure by the Pledgor herefrom shall in any event be effective
unless the same shall be in writing and signed by the Administrative Agent, the
Pledgor, and then such waiver or consent shall be effective only in the specific
instance and for the specified purpose for which given.
(g) All notices, requests, demands, waivers or other communications to
or upon the respective parties hereto shall be in writing delivered in person,
by mail postage prepaid, by nationally recognized overnight courier or by
telecopy and shall be deemed to have been duly given or made when received, if
mailed or delivered by courier, or when personally delivered or transmitted by
telecopy, addressed to the party to which such notice, request, demand, waiver
or other communication is required or permitted to be given or made hereunder
at, if to the Pledgor, the address for the Company set forth in Schedule 10.2 to
the Credit Agreement and if to the Administrative Agent, the address set forth
for the Administrative Agent in the Credit Agreement, or such other address of
which such party shall have notified in writing the party giving such notice.
19. GOVERNING LAW; TERMS. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, AND EXCEPT TO
THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER,
OR REMEDIES HEREUNDER, ARE GOVERNED BY THE LAW OF ANY JURISDICTION OTHER THAN
THE STATE OF NEW YORK. TERMS USED IN ARTICLE 9 OF THE UCC ARE USED HEREIN AS
THEREIN DEFINED.
20. WAIVER OF JURY TRIAL. EACH PARTY HERETO WAIVES THEIR RESPECTIVE
RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, IN
ANY ACTION, PROCEEDING OR
- C-3 -16 -
Foreign Material Restricted Subsidiary Pledge Agreement
55
OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER
PARTY OR PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR
OTHERWISE. EACH PARTY HERETO AGREES THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL
BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE
PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED
BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING
WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF
THIS AGREEMENT OR ANY PROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
IN WITNESS WHEREOF, the parties hereto, by their officers duly
authorized, have caused this Agreement to be duly executed and delivered as of
the day and year first above written.
[PLEDGORS]
By
--------------------------------
Name
------------------------------
Title
-----------------------------
Agreed to:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
AS ADMINISTRATIVE AGENT
By
-------------------------
Xxxxx Xxxxx
Vice President
- C-3 -17 -
Foreign Material Restricted Subsidiary Pledge Agreement
56
SCHEDULE 1
TO FOREIGN MATERIAL RESTRICTED
SUBSIDIARY PLEDGE AGREEMENT
Attached to and forming a part of that certain Foreign Material
Restricted Subsidiary Pledge Agreement dated as of _______________ made by the
Pledgors party thereto to Bank of America National Trust and Savings
Association, as Administrative Agent.
STOCK PLEDGOR'S TOTAL
PLEDGED CERTIFICATE PAR NO. OF PERCENTAGE OF
PLEDGOR SUBSIDIARY NO. VALUE SHARES OWNERSHIP
------- ---------- ----------- ----- ------ ---------------
- C-3 -1 -
Foreign Material Restricted Subsidiary Pledge Agreement
57
SCHEDULE 2
TO FOREIGN MATERIAL RESTRICTED
SUBSIDIARY PLEDGE AGREEMENT
This Pledge Agreement Supplement, dated as of , is delivered pursuant
to Section 4 of the Pledge Agreement referred to below. The undersigned hereby
agrees that this Pledge Agreement Supplement may be attached to the Foreign
Material Restricted Subsidiary Pledge Agreement, dated as of (the "Pledge
Agreement", the terms defined therein and not otherwise defined herein being
used as therein defined), made by the Pledgor party thereto to Bank of America
National Trust and Savings Association as Administrative Agent for its benefit
and the benefit of the Secured Parties and that the shares listed on this Pledge
Agreement Supplement shall be and become part of the Collateral referred to in
the Pledge Agreement and shall secure all Obligations.
The undersigned agrees that the securities listed below shall for all
purposes constitute Collateral and shall be subject to the security interest
created by the Pledge Agreement.
The undersigned hereby certifies that the representations and
warranties set forth in Section 3 of the Pledge Agreement are true and correct
as to the Collateral listed herein on and as of the date hereof.
[PLEDGOR]
By
-------------------------------------
Name
-----------------------------------
Title
----------------------------------
STOCK PLEDGOR'S TOTAL
PLEDGED CERTIFICATE PAR NO. OF PERCENTAGE OF
PLEDGOR SUBSIDIARY NO. VALUE SHARES OWNERSHIP
------- ---------- ----------- ----- ------ ---------------
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Foreign Material Restricted Subsidiary Pledge Agreement
58
SCHEDULE 3
TO FOREIGN MATERIAL RESTRICTED
SUBSIDIARY PLEDGE AGREEMENT
Attached to and forming a part of that certain Foreign Material
Restricted Subsidiary Pledge Agreement dated as of _____________________ made by
the Pledgors party thereto to Bank of America National Trust and Savings
Association, as Administrative Agent
- C-3-1 -
Foreign Material Restricted Subsidiary Pledge Agreement
59
EXHIBIT A TO EXHIBIT F (GUARANTY)
ADDITIONAL GUARANTORS
Dated: ______, ______
Reference is made to that certain Guaranty dated as of February 12,
1998 as amended or supplemented from time to time (the "Guaranty"), by and among
the Guarantors from time to time party thereto in favor of Bank of America
National Trust and Savings Association, as Administrative Agent for the
Guarantied Parties. Unless otherwise defined herein, capitalized terms used
herein have the respective meanings assigned to them in the Guaranty and the
Credit Agreement referred to therein.
_______________________ , a Domestic Material Restricted Subsidiary of
__________________________, ("Subsidiary") hereby agrees to become a Guarantor
under the Guaranty, and agrees to be bound by all the terms and conditions
applicable to a Guarantor thereunder as of the date hereof.
The undersigned Subsidiary hereby represents and warrants to the
matters set forth in Section 10 of the Guaranty as of the date hereof.
The undersigned existing Guarantors hereby consent to Subsidiary
becoming a party to the Guaranty. This supplement to the Guaranty is executed by
the parties hereto as of the date first written above.
NEW DOMESTIC MATERIAL RESTRICTED SUBSIDIARY
By
-----------------------------------------
Name
---------------------------------------
Title
--------------------------------------
EXISTING GUARANTORS
By
-----------------------------------------
Name
---------------------------------------
Title
--------------------------------------
ACKNOWLEDGED:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, AS
ADMINISTRATIVE AGENT
By
--------------------------------
Xxxxx Xxxxx
Vice President
- 1 -
Exhibit A To Exhibit F (Guaranty)
60
EXHIBIT H
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 certain Second Amended and Restated Reducing
Revolving Credit Agreement dated as of February 12, 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 USA, Inc. (the "Company"), the several
financial institutions party hereto (the "Banks"), Bank of America National
Trust and Savings Association, as agent for the Banks (in such capacity, the
"Administrative Agent"), NationsBank, N.A. as Syndication Agent and BankBoston,
N.A., The Bank of Nova Scotia, CIBC Inc. and Fleet Bank, as Co-Agents,. It is a
requirement of the Credit Agreement that the Subordinated Creditor enter into
this Subordination Agreement.
The Company and its Subsidiaries (each, a "Subordinated Obligor") are
or may become indebted or otherwise obligated to the Company and other of its
Subsidiaries (each, a "Subordinated Creditor"), and desire that the Banks
continue to extend financial accommodations to the Company. 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 Obligor, 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").
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 Obligor 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 Obligor, (b) any proceedings under any bankruptcy or other debtor
relief laws being instituted by or against any Subordinated Obligor, (c) the
appointment of any receiver for any Subordinated
H - 1
Cinemark (USA) Intercompany Subordination Agreement
61
Obligor's business or assets, or (d) any dissolution or winding up of the
affairs of any Subordinated Obligor 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) 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
Company or any guarantor of any indebtedness of the Company from liability, and
(f) make optional future advances to the Company, 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 Obligor such
information concerning any Subordinated Obligor'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
Obligor.
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 SECOND AMENDED
AND RESTATED REDUCING REVOLVING CREDIT AGREEMENT DATED AS OF FEBRUARY
12, 1998 AMONG CINEMARK 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."
H - 2
Cinemark (USA) Intercompany Subordination Agreement
62
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.
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
Obligor'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 Obligors.
10. Notwithstanding the provisions of Section 2, (a) a Subordinated
Obligor may make payments or prepayments 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:
------------------------------------
H - 3
Cinemark (USA) Intercompany Subordination Agreement
63
ACCEPTANCE OF SUBORDINATION
AGREEMENT BY SUBORDINATED OBLIGORS
The undersigned being the Subordinated Obligors 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:
-------------------------------
H - 4
Cinemark (USA) Intercompany Subordination Agreement
64
schedule a to intercompany subordination agreement
ALL SUBORDINATED CREDITORS
ALL SUBORDINATED OBLIGORS
H - 5
Cinemark (USA) Intercompany Subordination Agreement
