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EXHIBIT 10.9(A)
SECOND AMENDED AND RESTATED
REDUCING REVOLVING CREDIT AGREEMENT
This SECOND AMENDED AND RESTATED REDUCING REVOLVING CREDIT AGREEMENT is
entered into as of February 12, 1998 among CINEMARK USA, Inc., a Texas
corporation (the "Company"), the several financial institutions from time to
time party to this Agreement (collectively, the "Banks"; individually, a
"Bank"), Bank of America National Trust and Savings Association, as agent for
the Banks (in such capacity, the "Administrative Agent"), NationsBank of Texas,
N.A. as syndication agent (in such capacity, the "Syndication Agent") and
BankBoston, N.A., The Bank of Nova Scotia, CIBC Inc. and Fleet Bank, as
Co-Agents (in such capacity, the "Co-Agents").
RECITAL
The Banks desire to amend and restate the Existing Credit Facility on
the terms and conditions set forth herein by making available to the Company a
reducing revolving credit facility upon the terms and conditions set forth in
this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained herein, the parties agree as follows:
SECTION 1
DEFINITIONS
1.1 DEFINED TERMS. In addition to the terms defined elsewhere in this
Agreement, the following terms have the following meanings:
"Affiliate" means, as to any Person, any other Person which, directly
or indirectly, is in control of, is controlled by, or is under common control
with, such Person. A Person shall be deemed to control another Person if the
controlling Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of the other Person, whether
through the ownership of voting securities, by contract or otherwise. Without
limitation, any director, executive officer or beneficial owner of 10% or more
of the voting interest of a Person shall for the purposes of this Agreement, be
deemed to control the other Person. In no event shall any Bank be deemed an
"Affiliate" of the Company or of any Subsidiary of the Company.
"Agent-Related Persons" means BofA and any successor agent arising
under Section 9.9, the Syndication Agent, the Co-Agents and the Arrangers
together with their respective Affiliates, and the officers, directors,
employees, agents and attorneys-in-fact of such Persons and Affiliates.
"Aggregate Commitment" means the combined Commitments of the Banks in
the amount of $350,000,000, as such amount may be reduced from time to time
pursuant to this Agreement.
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"Agreement" means this Second Amended and Restated Reducing Revolving
Credit Agreement, as amended, modified, supplemented or waived from time to time
in accordance with the terms hereof.
"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 Disposed 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.
"Annualized Theatres" means, for any period, newly constructed theatres
identified to the Administrative Agent that have had more than one complete
quarter of operation, but less than four complete quarters of operation (each,
an "Annualized Theatre").
"Applicable Amount" means, subject, with respect to Offshore Rate
Loans, to the provisos immediately following the table, the basis points per
annum specified below applicable to interest rates and the Commitment fee
opposite the applicable ratio of Total Indebtedness to Annualized Cash Flow, as
set forth in the most recent certificate received by the Administrative Agent
pursuant to Section 4.1(h) or 6.2(a):
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In basis points per annum
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Ratio of Total
Indebtedness to
Annualized Cash Offshore Rate Base Rate Commitment
Flow Loans Loans Fee
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x > or = 5.50 200.00 75.00 37.50
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4.75 pound x < 5.50 175.00 50.00 35.00
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4.00 pound x < 4.75 150.00 25.00 32.50
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3.50 pound x < 4.00 125.00 0.00 30.00
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3.00 pound x < 3.50 100.00. 0.00 27.50
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2.50 pound x < 3.00 75.00 0.00 22.50
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2.00 pound x < 2.50 62.50 0.00 20.00
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x < 2.00 50.00 0.00 18.75
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provided, however, that any time the ratio of Senior Indebtedness to Annualized
Cash Flow is (a) less than 2.50 to 1, but greater than or equal to 1.75 to 1,
each amount set forth above under the heading "Offshore Rate Loans" shall be
reduced by 12.50 basis points per annum, or (b) less than 1.75 to 1, each amount
set forth above under the heading "Offshore Rate Loans" shall be reduced by 25
basis points per annum.
The Applicable Amount shall be in effect from the date the most recent
certificate delivered pursuant to Section 4.1(h) or 6.2(a) is received by the
Administrative Agent to but excluding the date the next such certificate is
received; provided, however, that if the Company fails to timely deliver the
next such certificate, the Applicable Amount from date such certificate was due
to but excluding the date such certificate is received by the Administrative
Agent (the "Delinquent Period") shall be the higher of (a) the Applicable Amount
already in effect and (b) the Applicable Amount as set forth in such certificate
when received, retroactively applied to the Delinquent Period.
"Approved Sale-Leaseback Transaction" means the sale-leaseback of
theatre properties contemplated by the Equity Offering Memorandum dated December
1997 prepared by Xxxxxx Xxxxxxx & Co., Incorporated. not exceeding $150,000,000.
"Arrangers" means BancAmerica Xxxxxxxxx Xxxxxxxx and NationsBanc
Xxxxxxxxxx Securities LLC (individually, an "Arranger").
"Assignee" has the meaning specified in Section 10.8(a).
"Bank" has the meanings specified in the introductory clause hereto,
and any successors to, and permitted assigns of, such Banks. Unless the context
otherwise clearly requires, "Bank" includes any such institution, or any
Affiliate of such institution, in its capacity as a counterparty under any Swap
Contract.
"Bank Affiliate" means a Person engaged primarily in the business of
commercial banking and that is a Subsidiary of a Bank or of a Person of which a
Bank is a Subsidiary.
"Bankruptcy Code" means the Federal Bankruptcy Reform Act of 1978 (12
U.S.C. ss. 101, et seq.).
"Base Rate" means the higher of: (a) the rate of interest publicly
announced from time to time by BofA in San Francisco, California, as its
"reference rate." It is a rate set by BofA based upon various factors including
BofA's costs and desired return, general economic conditions and other factors,
and is used as a reference point for pricing some loans, which may be priced at,
above, or below such announced rate; and (b) one-half percent per annum above
the Federal Funds Rate. Any change in the reference rate announced by BofA shall
take effect at the opening of business on the day specified in the public
announcement of such change.
"Base Rate Loan" means a Loan that bears interest based on the Base
Rate.
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"BofA" means Bank of America National Trust and Savings Association, a
national banking association, and any successors thereto under this Agreement.
"Borrowing" means a borrowing hereunder consisting of Loans made to the
Company on the same day by the Banks pursuant to Section 2.
"Borrowing Date" means the date a Borrowing is made.
"Business Day" means any day other than a Saturday, Sunday or other day
on which commercial banks in New York City or San Francisco are authorized or
required by law to close and, if the applicable Business Day relates to any
Offshore Rate Loan, means such a day on which dealings are carried on in the
applicable offshore dollar interbank market.
"Capital Expenditures" means, for any period and with respect to any
Person, the aggregate of all expenditures by such Person and its Restricted
Subsidiaries for the acquisition or leasing of fixed or capital assets or
additions to equipment (including replacements, capitalized repairs and
improvements during such period) which should be capitalized under GAAP on a
consolidated balance sheet of such Person and its Restricted Subsidiaries. For
the purpose of this definition, the purchase price of equipment which is
purchased simultaneously with the trade-in of existing equipment owned by such
Person or any of its Restricted Subsidiaries or with insurance proceeds shall be
included in Capital Expenditures only to the extent of the gross amount of such
purchase price less the credit granted by the seller of such equipment for such
equipment being traded in at such time, or the amount of such proceeds, as the
case may be.
"Capital Lease" has the meaning specified in the definition of Capital
Lease Obligations.
"Capital Lease Obligations" means all monetary obligations of the
Company or any of its Restricted Subsidiaries under any leasing or similar
arrangement which, in accordance with GAAP, is classified as a capital lease
("Capital Lease").
"Capital Stock" of any Person means (a) any and all shares, interest,
participations or other equivalents (however designated) of such Persons'
capital stock and any warrants, options and similar rights to acquire such
capital stock, (b) in the case of a partnership, partnership interests (whether
general or limited) and (c) any other interest or participation that confers on
a Person the right to receive a share of the profits and losses of, or
distributions or assets of, the issuing Person.
"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 the Company or any Restricted
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Subsidiary of the Company, the remaining term to maturity or interest rate
adjustment is not more than two years;
(b) obligations (including, but not limited to, demand or time
deposits, bankers' acceptances and certificates of deposit) issued by a
depository institution or trust company incorporated under the laws of the
United States of America, any state thereof or the District of Columbia, Canada
or any province thereof, provided that (1) such instrument has a final maturity
not more than one year from the date of purchase thereof by the Company or any
Restricted Subsidiary of the Company and (2) such depository institution or
trust company has, at the time of the Company's or such Restricted Subsidiary's
Investment therein or contractual commitment providing for such Investment, (x)
capital, surplus and undivided profits (as of the date of such institution's
most recently published financial statements) in excess of $100,000,000 and (y)
the long-term unsecured debt obligations (other than such obligations rated on
the basis of the credit of a person or entity other than such institution) of
such institution, at the time of the Company's or any Restricted Subsidiary's
Investment therein or contractual commitment providing for such Investment, are
rated in the highest rating category of both Standard & Poor's Rating Group
("S&P") and Xxxxx'x Investor Service, Inc. ("Moody's");
(c) commercial paper issued by any corporation, if such commercial
paper has, at the time of the Company's or any Restricted Subsidiary's
Investment therein or contractual commitment providing for such Investment,
credit ratings of at least A-1 by S&P and P-1 by 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 Company's or any Restricted Subsidiary's 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;
(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; and
(g) demand or time deposit accounts used in the ordinary course of
business with overseas branches of commercial banks incorporated under the laws
of the United States of America, any state thereof or the District of Columbia,
Canada or any province; provided that such commercial bank has, at the time of
the Company's or such Restricted Subsidiary's Investment therein, (1) capital,
surplus and undivided profits (as of the date of such institution's most
recently published financial statements) in excess of $100,000,000 and (2) the
long-term unsecured debt obligations (other than such obligations rated on the
basis of the credit of a person or entity other than such institution) of such
institution, at the time of the Company's or such Restricted Subsidiary's
Investment therein are rated in the highest rating category of both
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S&P and Moody's. 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 the Company 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.
"Cash Flow" means, for any period, for the Company and its Restricted
Subsidiaries on a consolidated basis, or, as applicable, with respect to certain
properties or assets, determined in accordance with GAAP, the sum of (a) net
income (or net loss) plus (b) all amounts treated as expenses for depreciation
and Consolidated Interest Expense (including amortization of debt issue costs)
and the amortization of intangibles of any kind to the extent included in the
determination of such net income (or loss), plus (c) all accrued taxes on or
measured by income to the extent included in the determination of such net
income (or loss) plus (d) increases in deferred lease expense, plus (e) other
non cash items reducing net income, plus (f) compensation expense related to tax
payment plans implemented by the Company from time to time in connection with
the exercise and/or repurchase of stock options or the repurchase of any shares
of common stock issued upon the exercise of any such option which, net of the
related tax benefit, does not exceed $5,000,000 in the aggregate less (g)
decreases in deferred lease expense, less (h) interest income; provided,
however, that net income (or loss) shall be computed for these purposes without
giving effect to (i) gains or losses on Dispositions, (ii) extraordinary losses
or extraordinary gains, or (iii) the net income (or net loss) of any Person that
is not a Restricted Subsidiary or that is accounted by such Person by the equity
method of accounting except that the Company's equity in the net income of any
such Person for any such period or any previous period shall be so included only
up to the aggregate amount of cash dividends or distributions paid to the
Company or any of its Restricted Subsidiaries.
"CERCLA" has the meaning specified in the definition of "Environmental
Laws."
"Change in Control Event" means:
(a) the acquisition, including through merger, consolidation or
otherwise, by any Person or any Persons acting together which would constitute a
"group" (a "Group") for purposes of Section 13(d) of the Exchange Act, together
with all affiliates and associates (as defined in Rule 12b-2 under the Exchange
Act) thereof, of direct or indirect beneficial ownership (as defined in Rule
13d-3 under the Exchange Act) of more than 50% of, (i) the outstanding shares of
common stock of the Company or Cinemark Theatres Holdings or (ii) the total
voting power of all classes of Capital Stock of the Company or Cinemark Theatres
Holdings entitled to vote generally in the election of directors; or
(b) the election by any Person or Group, together with all affiliates
and associates thereof, of a sufficient number of its or their nominees to the
Board of Directors of the Company or Cinemark Theatres Holdings such that such
nominees, when added to any existing directors remaining on such Board of
Directors after such election who are affiliates or associates of such Person or
Group, shall constitute a majority of such Board of Directors;
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provided, however, that, for purposes of this definition, the terms "Person" and
"Group" shall be deemed not to include (v) the Company or Cinemark Theatres
Holdings, (w) any Restricted Subsidiary of the Company that is a Wholly Owned
Subsidiary, (x) the Xxxxxxxx Family, (y) any group which includes any member or
members of the Xxxxxxxx Family if a majority of the Capital Stock of the Company
or Cinemark Theatres Holdings held by such group is beneficially owned
(including the power to vote such Capital Stock of the Company or Cinemark
Theatres Holdings) by such member or members or by one or more affiliates at
least 80% of the equity interests of which are owned by such member or members
or (z) Cypress Merchant Banking Partners L.P. or Cypress Pictures Ltd.;
provided, further, that, the term "Change of Control" shall be deemed not to
include any transaction or series of transactions that results in the Capital
Stock of the Company or Cinemark Theatres Holdings being held by one or more
Persons if the beneficial ownership, direct or indirect, of the Company or
Cinemark Theatres Holdings after such transaction or series of transactions is
substantially the same as the beneficial ownership, direct or indirect, of the
Company or Cinemark Theatres Holdings prior to such transaction or transactions.
"Cinemark International" means Cinemark International, Inc. a Texas
corporation.
"Cinemark International Credit Agreement" means the Credit Agreement
dated as of November 18, 1997 among Cinemark International, the banks from time
to time party thereto and Bank of America National Trust and Savings
Association, as administrative agent, as amended, modified, supplemented or
waived from time to time.
"Cinemark International Letter of Responsibility" means the letter of
responsibility, as amended from time to time, executed and delivered by the
Company in favor of the lender(s) or agent for the lender(s) under the Cinemark
International Credit Agreement.
"Cinemark Theatres Holdings" means Cinemark Theatres Holdings, Inc., a
Delaware corporation formed as contemplated by the Recapitalization Agreements.
"Cinemark Theatres Holdings Pledge Agreement" means the Cinemark
Theatres Holdings Pledge Agreement substantially in the form of Exhibit C-2, as
amended, supplemented, modified, renewed and replaced from time to time.
"Closing Date" means the date on which all conditions precedent set
forth in Section 4.1 are satisfied or waived by all Banks.
"Code" means the Internal Revenue Code of 1986, and regulations
promulgated thereunder.
"Collateral" means all property and interests in property and proceeds
thereof now owned or hereafter acquired by the Pledgors upon which a Lien now or
hereafter exists in favor of the Banks, or the Administrative Agent on behalf of
the Banks, whether under this Agreement or under any other documents executed by
any such persons and delivered to the Administrative Agent or the Banks, for the
purpose of securing the Obligations.
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"Collateral Documents" means, collectively, (a) the Pledge Agreements
and all other security agreements, and other similar agreements between any
Person and the Administrative Agent now or hereafter delivered to the
Administrative Agent pursuant to or in connection with the transactions
contemplated hereby, and all financing statements (or comparable documents) now
or hereafter filed in accordance with the UCC (or comparable law) against any
Person as debtor in favor of the Administrative Agent for the benefit of itself
and the Banks, and (b) any amendments, supplements, modifications, renewals,
replacements, consolidations, substitutions and extensions of any of the
foregoing.
"Commitment", with respect to each Bank, has the meaning specified in
Section 2.1.
"Consolidated Cash Interest Expense" means, for any period,
Consolidated Interest Expense paid or due to be paid during such period.
"Consolidated Interest Expense" means, for any period, gross
consolidated interest expense for the period determined in accordance with GAAP
(including all commissions, discounts, fees and other charges in connection with
standby letters of credit and similar instruments and amortization of debt issue
costs) for the Company and its Restricted Subsidiaries, plus (a) the portion of
the upfront costs and expenses for Swap Contracts of the Company and its
Restricted Subsidiaries (to the extent not included in gross consolidated
interest expense) fairly allocated to such Swap Contracts as expenses for such
period, and (b) capitalized interest of the Company and its Restricted
Subsidiaries for the period.
"Consolidated Tangible Assets" means, as of any date, the amount which,
in accordance with GAAP, would be set forth under the caption "Total Assets" (or
any like caption) on a consolidated balance sheet of such Person and its
Restricted Subsidiaries, less all intangible assets, including, without
limitation, goodwill, organization costs, patents, trademarks, copyrights,
franchises and research and development costs.
"Contingent Obligation" means, as applied to any Person, any direct or
indirect liability of that Person with respect to any Indebtedness, lease,
dividend, letter of credit or other obligation (the "primary obligations") of
another Person (other than a Restricted Subsidiary) (the "primary obligor"),
including any obligation of that Person, whether or not contingent, (a) to
purchase, repurchase or otherwise acquire such primary obligations or any
property constituting direct or indirect security therefor, (b) to advance or
provide funds (i) for the payment or discharge of any such primary obligation,
or (ii) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency or any balance sheet item, level
of income or financial condition of the primary obligor, (c) to purchase
property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation, (d) otherwise to assure or hold harmless the
holder of any such primary obligation against loss in respect thereof, or (e) in
respect of any Swap Contract; provided, however, that notwithstanding anything
contained herein to the contrary Contingent Obligations shall not include the
Cinemark International Letter of Responsibility. The amount of any Contingent
Obligation shall be deemed equal to the stated or determinable amount of the
primary obligation
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in respect of which such Contingent Obligation is made or, in the case of
Contingent Obligations other than in respect of Swap Contracts, if not stated or
if indeterminable, the maximum reasonably anticipated liability in respect
thereof and, in the case of Contingent Obligations in respect of Swap Contracts,
shall be equal to the Swap Termination Value.
"Contractual Obligations" means, as to any Person, any provision of any
security issued by such Person or of any agreement, undertaking, contract,
indenture, mortgage, deed of trust or other instrument, document or agreement to
which such Person is a party or by which it or any of its property is bound.
"Controlled Group" means the Company and all Persons (whether or not
incorporated) under common control or treated as a single employer with the
Company pursuant to Section 414(b), (c), (m) or (o) of the Code.
"Conversion/Continuation Date" means any date on which the Company
elects to convert a Base Rate Loan into an Offshore Rate Loan; continue an
Offshore Rate Loan as an Offshore Rate Loan; or convert an Offshore Rate Loan
into a Base Rate Loan.
"Covered Acquisition" means, in respect of any Disposition, (a) the
acquisition or development of theatre properties or other activities incidental
thereto within 360 days of such Disposition, or (b) the entering into a
definitive agreement to acquire or develop theatre properties or other
activities incidental thereto within 360 days of such Disposition, provided that
such acquisition or development is completed within 360 days of such definitive
agreements.
"Default" means any event or circumstance which, with the giving of
notice, the lapse of time, or both, would (if not cured or otherwise remedied
during such time) constitute an Event of Default.
"Disposition" means (a) the sale, lease, conveyance or other
disposition of Property, (b) the sale or transfer by the Company or any
Restricted Subsidiary of any equity securities of any Restricted Subsidiary
other than to the Company or a Restricted Subsidiary, and (c) if elected
pursuant to clause (d)(ii)(y) of the definition of "Unrestricted Subsidiary,"
the designation of any Restricted Subsidiary as an Unrestricted Subsidiary.
"Dollars", "dollars" and "$" each mean lawful money of the United
States.
"Eligible Assignee" means (a) a commercial bank organized under the
laws of the United States, or any state thereof, and having a combined capital
and surplus of at least $100,000,000; (b) a commercial bank organized under the
laws of any other country which is a member of the Organization for Economic
Cooperation and Development (the "OECD"), or a political subdivision of any such
country, and having a combined capital and surplus of at least $100,000,000,
provided that such bank is acting through a branch or agency located in the
United States; and (c) any Bank Affiliate.
"Environmental Claims" means all claims, however asserted, by any
Governmental Authority or other Person alleging potential liability or
responsibility for violation of any
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Environmental Law or for release or injury to the environment or threat to
public health, personal injury (including sickness, disease or death), property
damage, natural resources damage, or otherwise alleging liability or
responsibility for damages (punitive or otherwise), cleanup, removal, remedial
or response costs, restitution, civil or criminal penalties, injunctive relief,
or other type of relief, resulting from or based upon (a) the presence,
placement, discharge, emission or release (including intentional and
unintentional, negligent and non-negligent, sudden or non-sudden, accidental or
non-accidental placement, spills, leaks, discharges, emissions or releases) of
any Hazardous Material at, in, or from Property, whether or not owned by the
Company or any Restricted Subsidiary, or (b) any other circumstances forming the
basis of any violation, or alleged violation, of any Environmental Law.
"Environmental Laws" means all federal, state or local laws, statutes,
common law duties, rules, regulations, ordinances and codes, together with all
administrative orders, directed duties, requests, licenses, authorizations and
permits of, and agreements with, any Governmental Authorities, in each case
relating to environmental, health, safety and land use matters; including the
Comprehensive Environmental Response, Compensation and Liability Act of 1980
("CERCLA"), the Clean Air Act, the Federal Water Pollution Control Act of 1972,
the Solid Waste Disposal Act, the Federal Resource Conservation and Recovery
Act, the Toxic Substances Control Act, the Emergency Planning and Community
Right-to-Know Act.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and regulations promulgated thereunder.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with the Company within the meaning of
Section 414(b), 414(c) or 414(m) of the Code.
"ERISA Event" means (a) a Reportable Event with respect to a Qualified
Plan or a Multiemployer Plan; (b) a withdrawal by the Company or any ERISA
Affiliate from a Qualified Plan subject to Section 4063 of ERISA during a plan
year in which it was a substantial employer (as defined in Section 4001(a)(2) of
ERISA); (c) a complete or partial withdrawal by the Company or any ERISA
Affiliate from a Multiemployer Plan; (d) the filing of a notice of intent to
terminate, the treatment of a plan amendment as a termination under Section 4041
or 4041A of ERISA or the commencement of proceedings by the PBGC to terminate a
Qualified Plan or Multiemployer Plan subject to Title IV of ERISA; (e) a failure
by the Company or any member of the Controlled Group to make required
contributions to a Qualified Plan or Multiemployer Plan; (f) an event or
condition which might reasonably be expected to constitute grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Qualified Plan or Multiemployer Plan; (g) the imposition of any
liability under Title IV of ERISA, other than PBGC premiums due but not
delinquent under Section 4007 of ERISA, upon the Company or any ERISA Affiliate;
(h) an application for a funding waiver or an extension of any amortization
period pursuant to Section 412 of the Code with respect to any Plan; (i) a
non-exempt prohibited transaction occurs with respect to any Plan for which the
Company or any Subsidiary of the Company may be directly or indirectly liable;
or (j) a violation of the applicable requirements of Section 404 or 405 of ERISA
or the exclusive benefit rule under Section 401(a) of the Code by any fiduciary
or
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disqualified person with respect to any Plan for which the Company or any
member of the Controlled Group may be directly or indirectly liable.
"Event of Default" means any of the events or circumstances specified
in Section 8.1.
"Exchange Act" means the Securities and Exchange Act of 1934, as
amended from time to time, and regulations promulgated thereunder.
"Excess Net Proceeds" has the meaning set forth in Section 2.8(a).
"Excluded Disposition" means any Disposition consisting of:
(a) a Disposition of inventory, or used, worn-out or surplus equipment,
all in the ordinary course of business;
(b) the Disposition of equipment to the extent that such equipment is
exchanged for credit against the purchase price of similar replacement
equipment, or the proceeds of such sale are reasonably promptly applied to the
purchase price of such replacement equipment;
(c) an exchange of theatre properties of similar aggregate value in the
ordinary course of business;
(d) a Disposition that is a Permitted Investment or a Restricted
Payment not prohibited by Section 7.10 (to the extent such Permitted Investment
may be deemed to constitute a Restricted Payment or a Disposition);
(e) the Disposition of all or substantially all of the assets of the
Company (which is governed by Section 7.3);
(f) Dispositions of Property or equity securities (other than those of
the type described in clauses (a) through (e) above) in a single transaction or
a related series of transactions having a fair market value of less than
$2,000,000; provided, however, that the fair market value of all such Property
and equity securities disposed of by the Company and its Restricted Subsidiaries
during any 12-month period does not exceed $5,000,000; provided, further, that
Dispositions exceeding either of the foregoing limits shall not be deemed
Excluded Dispositions to the extent of such excess, and the Company shall
promptly make any prepayment required by Section 2.8(a) to the extent of any
Excess Net Proceeds therefrom;
(g) Dispositions of Property or equity securities by a Restricted
Subsidiary to the Company or another Restricted Subsidiary; and
(h) Approved Sale-Lease Back Transactions.
"Existing Credit Facility" means that certain Credit Agreement dated as
of February 14, 1996, as amended, among the Company, the banks party thereto and
Bank of America National Trust and Savings Association, as the agent, as amended
and restated by that certain First Amended and Restated Reducing Revolving
Credit Agreement dated as of December 12, 1996, among the Company, the banks
party thereto and Bank of America National Trust and Savings
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Association, as the agent, as amended to the date hereof.
"Federal Funds Rate" means the weighted average of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published for such day of determination
(or if such day of determination is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day which is a Business Day, the average of the quotations
for such day on such transactions received by the Administrative Agent from
three Federal funds brokers of recognized standing selected by it.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System, or any successor thereto.
"GAAP" means generally accepted accounting principles set forth from
time to time in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the accounting
profession), or in such other statements by such other entity as may be in
general use by significant segments of the U.S. accounting profession, which are
applicable to the circumstances as of the date of determination.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, or any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
"Guarantor" means each Material Restricted Subsidiary of the Company
entering into a Guaranty as contemplated by Section 6.13.
"Guaranty" means the Guaranty substantially in the form of Exhibit F,
as amended, supplemented, modified, renewed and replaced from time to time.
"Hazardous Materials" means all those substances which are regulated
by, or which may form the basis of liability under, any Environmental Law,
including all substances identified under any Environmental Law as a pollutant,
contaminant, hazardous waste, hazardous constituent, special waste, hazardous
substance, hazardous material, or toxic substance, or petroleum or petroleum
derived substance or waste.
"Indebtedness" of any Person means, without duplication, (a) all
indebtedness for borrowed money; (b) all obligations issued, undertaken or
assumed as the deferred purchase price of property or services (other than trade
payables, coupons and gift certificates entered into in the ordinary course of
business pursuant to ordinary terms); (c) all reimbursement obligations with
respect to surety bonds, letters of credit, bankers' acceptances and similar
instruments (in each case, to the extent material or non-contingent); (d) all
obligations evidenced by notes, bonds, debentures or similar instruments,
including obligations so evidenced incurred in connection with the acquisition
of property, assets or businesses (but excluding trade accounts payable or
similar accrued liabilities arising in the ordinary course of
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business); (e) all indebtedness created or arising under any conditional sale or
other title retention agreement, or incurred as financing, in either case with
respect to Property acquired by the Person (even though the rights and remedies
of the seller or bank under such agreement in the event of default are limited
to repossession or sale of such property); (f) all Capital Lease Obligations;
(g) all indebtedness referred to in clauses (a) through (f) above secured by (or
for which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien upon or in Property (including accounts
and contracts rights) owned by such Person, even though such Person has not
assumed or become liable for the payment of such Indebtedness (provided,
however, that the amount of any such Indebtedness which is non-recourse to such
Person shall be the lesser of the fair market value of the Property subject to
the Lien and the amount of the Indebtedness secured); and (h) all Contingent
Obligations in respect of indebtedness or obligations of others of the kinds
referred to in clauses (a) through (f) above.
"Insolvency Proceeding" means (a) any case, action or proceeding before
any court or other Governmental Authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution, winding-up
or relief of debtors, or (b) any general assignment for the benefit of
creditors, composition, marshalling of assets for creditors or other, similar
arrangement in respect of its creditors generally or any substantial portion of
its creditors; in each case (a) and (b) undertaken under U.S. Federal, State or
foreign law.
"Interest Payment Date" means, with respect to any Offshore Rate Loan,
the last Business Day of each Interest Period applicable to such Loan; with
respect to any Base Rate Loan, the last Business Day of each calendar quarter;
and with respect to all Loans, the Maturity Date; provided, however, that if any
Interest Period for an Offshore Rate Loan exceeds three months, interest shall
also be paid on the date which falls three, six and nine months, as applicable,
after the beginning of such Interest Period.
"Interest Period" means, with respect to any Offshore Rate Loan, the
period commencing on the Borrowing Date or the Conversion/Continuation Date for
such Offshore Rate Loan and ending on the date 1, 2, 3, 6 or, if available to
all Banks in their sole discretion, 12 months thereafter, as selected by the
Company in its Notice of Borrowing or Notice of Conversion/Continuation;
provided that:
(a) if any Interest Period pertaining to an Offshore Rate Loan would
otherwise end on a day which is not a Business Day, that Interest Period shall
be extended to the next succeeding Business Day unless the result of such
extension would be to carry such Interest Period into another calendar month, in
which event such Interest Period shall end on the immediately preceding Business
Day;
(b) any Interest Period pertaining to an Offshore Rate Loan that begins
on the last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the calendar month at the end of
such Interest Period;
(c) no Interest Period for any Loan shall extend beyond the Maturity
Date; and
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(d) no Interest Period may be specified that extends beyond the next
Reduction Date unless the sum of the aggregate principal amount of the Offshore
Rate Loans having an Interest Period ending after such Reduction Date does not
exceed the Commitments after giving effect to any reduction thereto scheduled to
be made on such Reduction Date.
"Investment" means any direct or indirect advance, loan or other
extension of credit or capital contribution to (by means of any transfer of cash
or other property to others or any payment for property or services for the
account or use of others), or any purchase or acquisition of capital stock,
bonds, notes, debentures or other securities issued by, any other Person, other
than (a) loans or advances made to employees in the ordinary course of business
not in excess of $50,000 outstanding at any time to any employee and (b)
advances to customers in the ordinary course of business that are recorded as
accounts receivable on the balance sheet of any Person or its Subsidiaries and
any securities received in settlement thereof.
"Lending Office" means, with respect to any Bank, the office or offices
of the Bank specified as its "Lending Office," "Domestic Lending Office" or
"Offshore Lending Office," as the case may be, under its name on Schedule 10.2
hereto, or such other office or offices of the Bank as it may from time to time
specify in writing to the Company and the Administrative Agent.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, charge or deposit arrangement, encumbrance, lien (statutory or
other) or preference, priority or other security interest or preferential
arrangement of any kind or nature whatsoever (including those created by,
arising under or evidenced by any conditional sale or other title retention
agreement, the interest of a lessor under a Capital Lease Obligation, any
financing lease having substantially the same economic effect as any of the
foregoing, or the filing of any financing statement naming the owner of the
asset to which such lien relates as debtor, under the UCC or any comparable law)
and any contingent or other agreement to provide any of the foregoing, but not
including the interest of a lessor under an Operating Lease.
"Loan" means an extension of credit by a Bank to the Company pursuant
to Section 2, and may be a Base Rate Loan or an Offshore Rate Loan. The
conversion or continuation of any Loan pursuant to Section 2.4 shall not be
deemed to be a new extension of credit, but instead shall be deemed to be the
same Loan.
"Loan Documents" means this Agreement, any Notes, the Collateral
Documents, the Guaranty, all exhibits thereto, all documents delivered to the
Administrative Agent or any Bank in connection therewith and any Swap Contract
between the Company and any of the Banks.
"Majority Banks" means at any time Banks then holding at least 51% of
the then aggregate unpaid principal amount of the Loans, or, if no such
principal amount is then outstanding, Banks then having at least 51% of the
Commitments.
"Margin Stock" means "margin stock" as such term is defined in
Regulation G, T, U or X of the Federal Reserve Board.
"Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, condition
(financial or otherwise) or prospects
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of the Company or the Company and its Restricted Subsidiaries taken as a whole;
(b) a material impairment of the ability of the Company to perform under any
Loan Document and avoid any Event of Default; or (c) a material adverse effect
upon (i) the legality, validity, binding effect or enforceability of any Loan
Document, or (ii) the perfection or priority of any Lien granted to the Banks or
to the Administrative Agent for the benefit of the Banks under the Pledge
Agreements.
"Material Restricted Subsidiary" means any Restricted Subsidiary (a)
whose assets constitute more than 5% of the consolidated assets of the Company
and its Restricted Subsidiaries or (b) whose cash flow constitutes more than 5%
of the Cash Flow of the Company and its Restricted Subsidiaries.
"Maturity Date" means the earlier to occur of: (a) February 12, 2006
and (b) the date on which the Aggregate Commitment shall terminate in accordance
with the provisions of this Agreement.
"Xxxxxxxx Family" means (a) Xxx Xxx Xxxxxxxx or Xxxxx Xxxxxxxx, or any
descendant of Xxx Xxx Xxxxxxxx or the spouse of any such descendant, the estate
of Xxx Xxx Xxxxxxxx, Xxxxx Xxxxxxxx, any descendant of Xxx Xxx Xxxxxxxx or the
spouse of any such descendant (each, a "Xxxxxxxx"), (b) any trust or other
arrangement for the benefit of a Xxxxxxxx, or (c) any Person or corporation at
least 80% beneficially owned and controlled by one or more Mitchells.
"Xxxxxxxx Family Pledge Agreement" means the Second Amended and
Restated Xxxxxxxx Family Pledge Agreement substantially in the form of Exhibit
C-1, as amended, supplemented, modified, renewed and replaced from time to time.
"Multiemployer Plan" means a "multiemployer plan" (within the meaning
of Section 4001(a)(3) of ERISA) and to which any member of the Controlled Group
makes, is making, or is obligated to make contributions or, during the preceding
three calendar years, has made, or been obligated to make, contributions.
"Net Proceeds" means:
(a) in the case of any Disposition other than an Excluded Disposition
and other than a deemed Disposition in connection with the designation of a
Restricted Subsidiary as an Unrestricted Subsidiary pursuant to clause
(d)(ii)(y) of the definition of "Unrestricted Subsidiary," proceeds in cash,
checks or other cash equivalent financial instruments (including Cash
Equivalents) as and when received by the Person making a Disposition, net of:
(i) the direct costs relating to such Disposition, (ii) sale, use or other
transaction taxes paid or payable as a result thereof, and (iii) amounts applied
to the repayment of Indebtedness (other than the Obligations) secured by a Lien
permitted under Section 7.1 on the asset disposed of; and
(b) in the case of a deemed Disposition in connection with the
designation of a Restricted Subsidiary as an Unrestricted Subsidiary pursuant to
clause (d)(ii)(y) of the definition of "Unrestricted Subsidiary" that is not an
Excluded Disposition, an amount equal to the greater of (i) the aggregate
Investment therein and (ii) the market value of such Subsidiary.
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"Note" means a promissory note of the Company payable to the order of a
Bank substantially in the form of Exhibit E hereto evidencing the aggregate
indebtedness of the Company to such Bank resulting from Loans made by such Bank.
"Notice of Assignment and Acceptance" has the meaning specified in
Section 10.8(a).
"Notice of Borrowing" means a notice given by the Company to the
Administrative Agent pursuant to Section 2.3, in substantially the form of
Exhibit A.
"Notice of Conversion/Continuation" means a notice given by the Company
to the Administrative Agent pursuant to Section 2.4, in substantially the form
of Exhibit B.
"Notice of Lien" means any "notice of lien" or similar document
intended to be filed or recorded with any court, registry, recorder's office,
central filing office or other Governmental Authority for the purpose of
evidencing, creating, perfecting or preserving the priority of a Lien securing
obligations owing to a Governmental Authority.
"Obligations" means all Loans, and other Indebtedness, advances, debts,
liabilities, obligations, covenants and duties owing by the Company or any
Guarantor to any of the Banks, the Administrative Agent, or any other Person
required to be indemnified, under any Loan Document, including without
limitation, to any Bank in its capacity as a counterparty under any Swap
Contract, of any kind or nature, present or future, whether or not evidenced by
any note, guaranty or other instrument, arising under this Agreement, under any
other Loan Document, whether or not for the payment of money, whether arising by
reason of an extension of credit, loan, guaranty, indemnification or in any
other manner, whether direct or indirect (including those acquired by
assignment), absolute or contingent, due or to become due, now existing or
hereafter arising and however acquired.
"Offshore Rate" means, for each Interest Period for any Offshore Rate
Loan, an interest rate per annum (rounded upward to the nearest 1/100 of one
percent) determined pursuant to the following formula:
Offshore Rate = LIBOR
------------------------------------
1.00 - Eurodollar Reserve Percentage
Where,
"Eurodollar Reserve Percentage" means the maximum reserve percentage
(expressed as a decimal rounded upward to the next 1/100 of one percent) in
effect on the date LIBOR for such Interest Period is determined (whether or not
applicable to any Bank) under regulations issued from time to time by the
Federal Reserve Board for determining the maximum reserve requirement (including
any emergency, supplemental or other marginal reserve requirement) with respect
to Eurocurrency funding (currently referred to as "Eurocurrency Liabilities")
having a term equal to such Interest Period; and
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"LIBOR" means the rate of interest per annum (rounded upward to the
nearest 1/32nd of 1%) notified to the Administrative Agent by BofA as the rate
of interest at which dollar deposits in the approximate amount of the amount of
the Loan to be made or continued as, or converted into, an Offshore Rate Loan by
BofA and having a maturity comparable to such Interest Period would be offered
to major banks in the London interbank market at their request at or about 11:00
a.m. (London time) on the second Business Day prior to the commencement of such
Interest Period.
The Offshore Rate shall be adjusted automatically as of the effective
date of any change in the Eurodollar Reserve Percentage.
"Offshore Rate Loan" means a Loan that bears interest based on the
Offshore Rate.
"Operating Lease" means, as applied to any Person, any lease of
Property which is not a Capital Lease.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Participant" has the meaning specified in Section 10.8(d).
"Permitted Investment" has the meaning specified in Section 7.4.
"Permitted Lien" has the meaning specified in Section 7.1.
"Permitted Swap Obligations" means all obligations (contingent or
otherwise) of the Company or any Subsidiary existing or arising under Swap
Contracts, provided that each of the following criteria is satisfied: (a) such
obligations are (or were) entered into by such Person in the ordinary course of
business for the purpose of directly mitigating risks associated with
liabilities, commitments or assets held or reasonably anticipated by such
Person, or changes in the value of securities issued by such Person in
conjunction with a securities repurchase program not otherwise prohibited
hereunder, and not for purposes of speculation or taking a "market view;" (b)
such Swap Contracts do not contain any provision ("walk-away" provision)
exonerating the non-defaulting party from its obligation to make payments on
outstanding transactions to the defaulting party, and (c) a perfected security
interest in such Person's rights and interests to and in such Swap Contracts has
been granted, and exists, in favor of the Administrative Agent, for the benefit
of the Banks, as collateral for the Obligations, documented in a form
satisfactory to the Administrative Agent.
"Person" means an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture or Governmental Authority.
"Plan" means an employee benefit plan (as defined in Section 3(3) of
ERISA) which the Company or any member of the Controlled Group sponsors or
maintains or to which the
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Company or any member of the Controlled Group makes, is making or is obligated
to make contributions, and includes any Multiemployer Plan or Qualified Plan.
"Pledge Agreement" means, unless the context otherwise requires, the
Xxxxxxxx Family Pledge Agreement prior to the Recapitalization Date, and the
Cinemark Theatres Holdings Pledge Agreement thereafter (collectively, the
"Pledge Agreements").
"Pledged Collateral" means the Collateral pledged pursuant to the
Pledge Agreements.
"Pledgors" means the Persons from time to time party to the Pledge
Agreements (individually, a "Pledgor").
"Property" or "Properties" means any estate or interest in any kind of
properties or assets, whether real, personal or mixed, and whether tangible or
intangible.
"Proforma Cash Flow for Annualized Theatres" means, for any period, the
sum of the Proforma Cash Flow for each Annualized Theatre, calculated on an
Annualized Theatre by Annualized Theatre basis in accordance with the formula
set forth in Schedule 1.1.
"Pro Rata Share" means, as to any Bank, the percentage equivalent of
such Bank's Commitment divided by the Aggregate Commitment.
"Purchase Money Obligation" means any Indebtedness secured by a Lien on
assets related to the business of the Company and its Restricted Subsidiaries,
and any additions and accessions thereto, which are purchased or constructed by
the Company or any Restricted Subsidiary of the Company at any time after the
Closing Date (excluding the assets of any Person at the time such Person becomes
a Restricted Subsidiary of the Company;) provided that (a) the security
agreement, conditional sales or other title retention contract pursuant to which
the Lien on such assets is created (together, for the purposes of this
definition, the "Security Agreement") shall be entered into within 180 calendar
days after the purchase or substantial completion of the construction of such
assets and shall at all times be confined solely to the assets so purchased or
acquired, any additions and accessions thereto and any proceeds therefrom, (b)
at no time shall the aggregate principal amount of the outstanding Indebtedness
secured thereby be increased, except in connection with the purchase of
additions and accessions thereto and except in respect of fees and other
obligations in respect of such Indebtedness, and (c) (i) the aggregate
outstanding principal amount of Indebtedness secured thereby (determined on a
per asset basis in the case of any additions and accessions) shall not at the
time such Security Agreement is entered into exceed 80% of the purchase price to
the Company or any Restricted Subsidiary of the Company of the assets subject
thereto or (ii) the Indebtedness secured thereby shall be with recourse solely
to the assets so purchased or acquired, any additions and accessions thereto and
any proceeds therefrom; provided further, that if the Company or any Restricted
Subsidiary of the Company has entered into a legally binding commitment to
execute a Security Agreement with respect to a specified asset or assets and the
Company or such Restricted Subsidiary executes such Security Agreement within 30
calendar days after the date (for the purposes of this definition, the
"commitment date") on which it entered into such commitment, the Security
Agreement shall be deemed to have been entered into on the commitment date.
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"Qualified Plan" means a pension plan (as defined in Section 3(2) of
ERISA) intended to be tax-qualified under Section 401(a) of the Code and which
any member of the Controlled Group sponsors, maintains, or to which it makes, is
making or is obligated to make contributions, or in the case of a multiple
employer plan (as described in Section 4064(a) of ERISA) has made contributions
at any time during the immediately preceding period covering at least five plan
years, but excluding any Multiemployer Plan.
"Recapitalization" means the incorporation of Cinemark Theatres
Holdings and causing Cinemark Theatres Holdings to own 100% of the capital stock
of the Company on the terms and conditions of the Recapitalization Agreements.
"Recapitalization Agreements" means the material documents executed and
to be executed in connection with the Recapitalization.
"Recapitalization Date" means the date on which the Recapitalization
shall have been fully consummated in accordance with the terms and conditions of
the Recapitalization Agreements.
"Reduction Amount" means, with respect to each Reduction Date, the
amount set forth below opposite that Reduction Date (subject to the last
sentence of Section 2.6):
Annual Reduction (as a percent of
Aggregate Commitment as of first
Reduction Dates Reduction Date)
------------------------------------- ----------------------------------
March 31, 2001, June 30, 2001, 10%
September 30, 2001, December 31, 2001 (2.5% on each Reduction Date)
March 31, 2002, June 30, 2002, 15%
September 30, 2002, December 31, 2002 (3-3/4% on each Reduction Date)
March 31, 2003, June 30, 2003, 20%
September 30, 2003, December 31, 2003 (5% on each Reduction Date)
March 31, 2004, June 30, 2004, 25.0%
September 30, 2004, December 31, 2004 (6-1/4% on each Reduction Date)
March 31, 2005, June 30, 2005, 25.0%
September 30, 2005, December 31, 2005 (6-1/4% on each Reduction Date)
Maturity Date Remaining Commitment
"Reduction Date" means each date specified in the definition of
"Reduction Amount" on which a reduction in the Commitments is scheduled to occur
pursuant to Section 2.8(b).
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"Reportable Event" means, as to any Plan, (a) any of the events set
forth in Section 4043(b) of ERISA or the regulations thereunder, other than any
such event for which the 30-day notice requirement under ERISA has been waived
in regulations issued by the PBGC, (b) a withdrawal from a Plan described in
Section 4063 of ERISA, or (c) a cessation of operations described in Section
4062(e) of ERISA.
"Requirement of Law" means, as to any Person, any law (statutory or
common), treaty, rule or regulation or determination of an arbitrator or of a
Governmental Authority, in each case applicable to or binding upon the Person or
any of its property or to which the Person or any of its property is subject.
"Responsible Officer" means the chief executive officer, chief
operating officer or any vice president of the Company, or any other officer
having substantially the same authority and responsibility; or, with respect to
compliance with financial covenants, the chief financial officer or the
treasurer of the Company, or any other officer having substantially the same
authority and responsibility.
"Restricted Payment" means (a) the declaration or making of any
dividend payment or other distribution of assets, Properties, cash, rights,
obligations or securities on account of any shares of any class of the capital
stock of the Company or a Restricted Subsidiary, (b) the purchase, redemption or
other acquisition for value of any shares of the capital stock of the Company or
any Subsidiary (other than Wholly Owned Subsidiaries of the Company that are
Restricted Subsidiaries) or any warrants, rights or options to acquire such
shares, now or hereafter outstanding, (c) any Investment other than a Permitted
Investment, (d) the prepayment, repayment, redemption, defeasance or other
acquisition or retirement for value prior to any scheduled maturity, scheduled
repayment or scheduled sinking fund payment, of any Indebtedness of the Company
or any of its Subsidiaries not otherwise permitted by this Agreement or any Loan
Document to be so paid and (e) if elected pursuant to clause (d)(ii)(x) of the
definition of "Unrestricted Subsidiary," the designation of any Restricted
Subsidiary as an Unrestricted Subsidiary, which Restricted Payment shall be
deemed to be in an amount equal to the greater of (i) the aggregate Investment
in such Subsidiary and (ii) the market value of such Subsidiary.
"Restricted Subsidiary" means:
(a) any Subsidiary of the Company (other than a Subsidiary that is an
Unrestricted Subsidiary) organized or acquired after the Closing Date, unless
such Subsidiary shall have been designated as an Unrestricted Subsidiary by
resolution of the Board of Directors of the Company as provided in and in
compliance with the definition of "Unrestricted Subsidiary;" and
(b) any Unrestricted Subsidiary which is designated as a Restricted
Subsidiary by the Board of Directors of the Company; provided that, immediately
after giving effect to such designation, no Default or Event of Default shall
have occurred and be continuing and the Company could incur at least $1.00 of
additional Indebtedness under Section 4.9(a) of the Senior Subordinated Note
Indenture as in effect on the Closing Date. The Company shall
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evidence any such designation to the Administrative Agent by promptly filing
with the Administrative Agent a certificate signed by a Responsible Officer
certifying that such designation has been made and stating that such designation
complies with the requirements of the immediately preceding sentence;
provided, further, that each Material Restricted Subsidiary shall be a
Guarantor.
"SEC" means the Securities and Exchange Commission, or any successor
thereto.
"Senior Indebtedness" means, as of any date of determination, all Total
Indebtedness which is not expressly subordinated to the Obligations on terms and
conditions satisfactory to the Majority Banks.
"Senior Subordinated Notes" means the Company's (a) 9-5/8% Series B
Senior Subordinated Notes Due August 1, 2008 in an aggregate principal amount of
$200,000,000, (b) 9-5/8% Series D Senior Subordinated Notes Due August 1, 2008,
in an aggregate principal amount of $75,000,000 and (c) 8-1/2% Senior
Subordinated Notes Due August 1, 2008, in an aggregate principal amount of
$105,000,000,000, each issued pursuant to its respective Senior Subordinated
Note Indenture.
"Senior Subordinated Note Indentures" means (a) the Indenture dated
August 15, 1996 between the Company and U. S. Trust Company of Texas, N.A., as
trustee, (b) the Indenture dated June 26, 1997 between the Company and U. S.
Trust Company of Texas, N.A., as trustee, and (c) Indenture dated January 14,
1998 between the Company and U. S. Trust Company of Texas, N.A., as trustee,
each as amended from time to time (individually, a "Senior Subordinated Note
Indenture").
"Shareholders' Agreement" means the Shareholders' Agreement dated March
12, 1996 among the Company, the Trusts, Cypress Merchant Banking Partners, L.P.
and Cypress Pictures Ltd.
"Solvent" means, as to any Person at any time, that (a) the fair value
of the Property of such Person is greater than the amount of such Person's
liabilities (including disputed, contingent and unliquidated liabilities) as
such value is established and liabilities evaluated for purposes of Section
101(31) of the Bankruptcy Code and, in the alternative, for purposes of the
Uniform Fraudulent Transfer Act; (b) the present fair saleable value of the
Property of such Person is not less than the amount that will be required to pay
the probable liability of such Person on its debts as they become absolute and
matured; (c) such Person is able to realize upon its Property and pay its debts
and other liabilities (including disputed, contingent and unliquidated
liabilities) as they mature in the normal course of business; (d) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and liabilities
mature; and (e) such Person is not engaged in business or a transaction, and is
not about to engage in business or a transaction, for which such Person's
property would constitute unreasonably small capital.
"Subsidiary" means, with respect to any Person, (a) a corporation a
majority of whose capital stock with voting power, under ordinary circumstances,
to elect directors is at the time,
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directly or indirectly, owned by such Person, by one or more Subsidiaries of
such Person or by such Person and one or more Subsidiaries thereof, (b) any
other Person (other than a corporation) in which such Person, one or more
Subsidiaries thereof or such Person and one or more Subsidiaries thereof,
directly or indirectly, at the date of determination thereof has at least a
majority ownership interest and the power to direct the policies, management and
affairs thereof, or (c) upon designation by the Company, and until designation
by the Company to the contrary, a Person, 50% or more of whose Capital Stock
with voting power under ordinary circumstances to elect directors (or Persons
having similar or corresponding powers and responsibilities) is at the time,
directly or indirectly, owned by such Person, by one or more Subsidiaries of
such Person or by such Person and one or more Subsidiaries thereof (a "50%
Entity"). The Company shall evidence any designation pursuant to clause (c) of
the immediately preceding sentence to the Administrative Agent by filing with
the Administrative Agent within 45 days of such designation a certificate signed
by a Responsible Officer certifying that such designation has been made.
"Swap Contract" means any agreement, whether or not in writing,
relating to any transaction that is a rate swap, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap or
option, bond, note or xxxx option, interest rate option, forward foreign
exchange transaction, cap, collar or floor transaction, currency swap,
cross-currency rate swap, swaption, currency option or any other, similar
transaction (including any option to enter into any of the foregoing) or any
combination of the foregoing, and, unless the context otherwise clearly
requires, any master agreement relating to or governing any or all of the
foregoing.
"Swap Termination Value" means, in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a) the amount(s) determined as the
xxxx-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include any Bank.)
"Syndication Agent" means NationsBank of Texas, N.A.
"Taxes" has the meaning specified in Section 3.1(a).
"Trusts" means The Xxxxxxxx Special Trust, The Xxxxxxxx Grandchildren
Trust for Xxxxxxx Xxx Xxxxxxx, The Xxxxxxxx Grandchildren Trust for Ashley Xxx
Xxx, The Xxxxxxxx Grandchildren Trust for Skyler Xxxx Xxxxxxxx, The Xxxxxxxx
Grandchildren Trust for Lacey Xxxxx Xxx and The Xxxxxxxx Grandchildren Trust for
Cassie Xxx Xxxxxxx.
"Total Indebtedness" means, as of any date of determination, (a) all
indebtedness for borrowed money, including purchase money indebtedness, (b) all
reimbursement obligations with respect to surety bonds, letters of credit which
are not cash collateralized, bankers'
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acceptances and similar instruments; and (c) all Capital Lease Obligations of
the Company and its Restricted Subsidiaries.
"UCC" means the Uniform Commercial Code as in effect in any
jurisdiction.
"Unfunded Pension Liabilities" means the excess of a Plan's benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Plan's assets, determined in accordance with the assumptions used by the Plan's
actuaries for funding the Plan pursuant to section 412 for the applicable plan
year.
"Unrestricted Subsidiary" means, until such time as any of the
following shall be designated as a Restricted Subsidiary of the Company by the
Board of Directors of the Company as provided in and in compliance with the
definition of "Restricted Subsidiary:"
(a) Cinemark International and its Subsidiaries;
(b) any Subsidiary of an Unrestricted Subsidiary;
(c) any Subsidiary of the Company or of a Restricted Subsidiary of the
Company organized or acquired after the Closing Date that is designated
concurrently with its organization or acquisition as an Unrestricted Subsidiary
by resolution of the Board of Directors of the Company; and
(d) any Restricted Subsidiary that is designated as an Unrestricted
Subsidiary by resolution of the Board of Directors of the Company; provided that
(i) immediately after giving effect to such designation, no Default or Event of
Default shall have occurred and be continuing, and (ii) any such designation
shall be deemed, at the election of the Company at the time of such designation,
to be either (but not both) (x) the making of a Restricted Payment at the time
of such designation subject to the restrictions contained in Section 7.10 or (y)
the making of a Disposition at the time of such designation subject to the
restrictions contained in Section 7.2.
The Company shall evidence any designation pursuant to clause (c) or
(d) above to the Administrative Agent by filing with the Administrative Agent
within 45 days of such designation a certificate signed by a Responsible Officer
certifying that such designation has been made and, in the case of clause (d),
the related election of the Company in respect thereof.
"Voting Stock" means (a) the Class A Common Stock of the Company, par
value $.01 per share, and (b) any other shares of capital stock of the Company
issued from time to time, the holders of which are entitled to vote for the
election of one or more directors of the Company's board, including, in each
case, any shares of such stock issued upon the exercise of any warrants, options
or similar rights or upon the conversion of any debt or equity securities into
such stock.
"Wholly-Owned Subsidiary" of any Person means any Subsidiary of such
Person the entire voting share capital of which, other than directors'
qualifying shares if required by
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applicable law, is owned by such Person (either directly or indirectly through
Wholly-Owned Subsidiaries).
"Withdrawal Liabilities" means, as of any determination date, the
aggregate amount of the liabilities, if any, pursuant to Section 4201 of ERISA
if the Controlled Group made a complete withdrawal from all Multiemployer Plans
and any increase in contributions pursuant to Section 4243 of ERISA.
1.2 OTHER INTERPRETIVE PROVISIONS.
(a) DEFINED TERMS. Unless otherwise specified herein or therein, all
terms defined in this Agreement shall have the defined meanings when used in any
certificate or other document made or delivered pursuant hereto. The meaning of
defined terms shall be equally applicable to the singular and plural forms of
the defined terms. Terms (including uncapitalized terms) not otherwise defined
herein and that are defined in the UCC shall have the meanings therein
described.
(b) CERTAIN COMMON TERMS. The term "documents" includes any and all
instruments, documents, agreements, certificates, indentures, notices and other
writings, however evidenced. The term "including" is not limiting and means
"including without limitation."
(c) PERFORMANCE; TIME. Whenever any performance obligation hereunder
(other than a payment obligation) shall be stated to be due or required to be
satisfied on a day other than a Business Day, such performance shall be made or
satisfied on the next succeeding Business Day. In the computation of periods of
time from a specified date to a later specified date, the word "from" means
"from and including"; the words "to" and "until" each mean "to but excluding",
and the word "through" means "to and including." If any provision of this
Agreement refers to any action taken or to be taken by any Person, or which such
Person is prohibited from taking, such provision shall be interpreted to
encompass any and all means, direct or indirect, of taking, or not taking, such
action.
(d) CONTRACTS. Unless otherwise expressly provided herein, references
to agreements and other contractual instruments shall be deemed to include all
subsequent amendments and other modifications thereto, but only to the extent
such amendments and other modifications are not prohibited by the terms of any
Loan Document.
(e) LAWS. References to any statute or regulation are to be construed
as including all statutory and regulatory provisions consolidating, amending,
replacing, supplementing or interpreting the statute or regulation.
(f) CAPTIONS. The captions and headings of this Agreement are for
convenience of reference only and shall not affect the interpretation of this
Agreement.
(g) INDEPENDENCE OF PROVISIONS. The parties acknowledge that this
Agreement and other Loan Documents may use several different limitations, tests
or measurements to
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regulate the same or similar matters, and that such limitations, tests and
measurements are cumulative and must each be performed, except as expressly
stated to the contrary in this Agreement.
(h) ACCOUNTING PRINCIPLES. Unless the context otherwise clearly
requires, all accounting terms not expressly defined herein shall be construed,
and all financial computations required under this Agreement shall be made, in
accordance with GAAP, consistently applied.
SECTION 2
THE CREDITS
2.1 AMOUNTS AND TERMS OF COMMITMENTS. Each Bank severally agrees, on
the terms and conditions hereinafter set forth, to make Loans from time to time
on any Business Day during the period from the Closing Date to the Maturity
Date, in an aggregate amount not to exceed at any time outstanding the amount
set forth opposite such Bank's name in Schedule 2.1 under the heading
"Commitment" (such amount as the same may be reduced pursuant to Section 2.6 or
2.8 or as a result of one or more assignments pursuant to Section 10.8, such
Bank's "Commitment"); provided, however, that, after giving effect to any
Borrowing of Loans, the aggregate principal amount of all outstanding Loans
shall not at any time exceed the Aggregate Commitment; provided, further, that
the aggregate principal amount of the Loans of any Bank shall not at any time
exceed such Bank's Commitment. Within the limits of each Bank's Commitment, and
subject to the other terms and conditions hereof, the Company may borrow under
this Section 2.1, prepay pursuant to Section 2.7 and reborrow pursuant to this
Section 2.1.
2.2 LOAN ACCOUNTS AND NOTES. (a) Subject to Section 2.2(b), the Loans
made by each Bank and the fees due hereunder shall be evidenced by one or more
loan accounts or records maintained by such Bank in the ordinary course of
business. The loan accounts or records maintained by the Administrative Agent
and each Bank shall be conclusive absent manifest error of the amount of the
Loans made by the Banks to the Company and the interest and payments thereon and
fees due hereunder. Any failure so to record or any error in doing so shall not,
however, limit or otherwise affect the obligation of the Company hereunder to
pay any amount owing with respect to the Loans or such fees.
(b) Upon the request of any Bank made through the Administrative Agent,
the Loans made by such Bank may be evidenced by one or more Notes, instead of
loan accounts. Each such Bank may endorse on the schedules annexed to its
Note(s), the date, amount and maturity of each Loan made by it and the amount of
each payment of principal made by the Company with respect thereto. Each such
Bank is irrevocably authorized by the Company to endorse its Note(s) and each
Bank's record shall be conclusive absent manifest error; provided, however, that
the failure of a Bank to make, or an error in making, a notation thereon with
respect to any Loan shall not limit or otherwise affect the obligations of the
Company hereunder or under any such Note to such Bank.
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2.3 PROCEDURE FOR BORROWING.
(a) Each Borrowing shall be made upon irrevocable written notice in the
form of a Notice of Borrowing, which notice must be received by the
Administrative Agent prior to 9:00 a.m. (San Francisco time) (i) three Business
Days prior to the requested Borrowing Date, in the case of Offshore Rate Loans;
and (ii) one Business Day prior to the requested Borrowing Date, in the case of
Base Rate Loans, specifying: (i) the amount of the Borrowing, which, in the case
of a borrowing of Offshore Rate Loans, shall be in an aggregate minimum
principal amount of $3,000,000 and any multiple of $500,000 in excess thereof,
and in the case of a borrowing of Base Rate Loans, shall be in an aggregate
minimum principal amount of $1,000,000 and any multiple of $200,000 in excess
thereof; (ii) the requested Borrowing Date, which shall be a Business Day; (iii)
whether the Borrowing is to be comprised of Offshore Rate Loans, Base Rate Loans
or any combination thereof; and (iv) the duration of the Interest Period
applicable to Offshore Rate Loans included in such notice. If the Notice of
Borrowing shall fail to specify the duration of the Interest Period for any
Borrowing comprised of Offshore Rate Loans, such Interest Period shall be one
month; provided, however, that with respect to the Borrowing to be made on the
Closing Date, the Notice of Borrowing shall be delivered to the Administrative
Agent not later than 9:00 a.m. (San Francisco time) one Business Day before the
Closing Date and such Borrowing will consist of Base Rate Loans only; provided,
further, that if so requested by the Administrative Agent, all Borrowings during
the first 60 days following the Closing Date shall have the same Interest Period
and shall be Base Rate or Offshore Rate Loans for Interest Periods no longer
than one month.
(b) Promptly after receipt of a Notice of Borrowing, the Administrative
Agent shall notify each Bank of the proposed Borrowing. Each Bank shall make
available to the Administrative Agent its Pro Rata Share of the amount (if any)
by which the principal amount of the proposed Borrowing exceeds the principal
amount of the Loans (if any) being converted or continued on the Borrowing Date,
in immediately available funds, by remitting such funds to: Bank of America
National Trust and Savings Association, ABA No. 000-000-000, Attn: Agency
Administrative Services #5596 For credit to: BANCONTROL Account No. 12332-14226,
Reference: Cinemark USA, Inc., no later than 11:00 a.m. (San Francisco time) on
the Borrowing Date. Upon satisfaction of the conditions set forth in Section
4.2, the Administrative Agent shall make available to the Company in like funds
on such Borrowing Date the aggregate of the amounts (if any) so made available
by the Banks by causing an amount equal to such aggregate amount (if any)
received by the Administrative Agent to be credited to the account of the
Company as specified by the Company in writing. If the conditions set forth in
Section 4.2 are not satisfied, the Administrative Agent shall promptly return
such funds to the Banks making the same available.
(c) Unless the Majority Banks shall otherwise agree, during the
existence of an Event of Default, the Company may not elect to have a Loan be
made as an Offshore Rate Loan.
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2.4 CONVERSION AND CONTINUATION ELECTIONS.
(a) The Company may (i) elect to convert on any Business Day, any Base
Rate Loans (or any part thereof in an amount not less than $3,000,000 or an
integral multiple of $500,000 in excess thereof) into Offshore Rate Loans; (ii)
elect to convert on the last day of the Interest Period therefor, any Offshore
Rate Loans (or any part thereof in an amount not less than $1,000,000 or an
integral multiple of $200,000 in excess thereof) into Base Rate Loans; or (iii)
elect to continue, on the last day of the Interest Period therefor, any Offshore
Rate Loans (or any part thereof in an amount not less than $3,000,000 or an
integral multiple of $500,000 in excess thereof); provided, that if the
aggregate amount of Offshore Rate Loans shall have been reduced, by payment,
prepayment, or conversion of part thereof to be less than $3,000,000, Offshore
Rate Loans shall automatically convert into Base Rate Loans.
(b) Each conversion or continuation shall be made upon irrevocable
written notice in the form of a Notice of Conversion/Continuation, which notice
must be received by the Administrative Agent prior to 9:00 a.m. (San Francisco
time) (i) three Business Days in advance of the Conversion/Continuation Date, if
the Loans are to be converted into or continued as Offshore Rate Loans; and (ii)
one Business Day prior to the Conversion/Continuation Date, if the Loans are to
be converted into Base Rate Loans, in each case specifying: (A) the proposed
Conversion/Continuation Date; (B) the aggregate amount of Loans to be converted
or continued; (C) the nature of the proposed conversion or continuation; and (D)
the duration of the requested Interest Period.
(c) If upon the expiration of any Interest Period applicable to
Offshore Rate Loans, the Company has failed to select a new Interest Period to
be applicable thereto, or if any Event of Default shall then exist, the Company
shall be deemed to have elected to convert such Offshore Rate Loans into Base
Rate Loans effective as of the expiration date of such current Interest Period.
(d) Upon receipt of a Notice of Conversion/ Continuation, the
Administrative Agent will promptly notify each Bank thereof, or, if no timely
notice is provided by the Company, the Administrative Agent will promptly notify
each Bank of the details of any automatic conversion. All conversions and
continuations shall be made pro rata according to the respective outstanding
principal amounts of the Loans with respect to which the notice was given held
by each Bank.
(e) Unless the Majority Banks shall otherwise agree, during the
existence of an Event of Default, the Company may not elect to have a Loan
converted into or continued as an Offshore Rate Loan.
2.5 LIMITATION ON INTEREST PERIODS. Notwithstanding any other provision
contained in this Agreement, after giving effect to any Borrowing or conversion
or continuation of any Loans, there shall not be more than 20 different Interest
Periods for Loans in effect without the consent of the Administrative Agent and
the Majority Banks.
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2.6 VOLUNTARY TERMINATION OR REDUCTION OF COMMITMENTS. The Company may,
upon not less than one Business Day's prior written notice to the Administrative
Agent, terminate the Aggregate Commitment or permanently reduce the Aggregate
Commitment by an aggregate minimum amount of $1,000,000 or any multiple thereof;
provided that no such reduction or termination shall be permitted if, after
giving effect thereto and to any prepayments of the Loans made on the effective
date thereof, the then outstanding principal amount of the Loans would exceed
the Aggregate Commitment then in effect and, provided, further, that once
reduced in accordance with this Section 2.6, the Aggregate Commitment may not be
increased. Any reduction of the Aggregate Commitment shall be applied to each
Bank's Commitment in accordance with such Bank's Pro Rata Share. All accrued
commitment fees to, but not including the effective date of any termination of
Commitments, shall be paid on the effective date of such termination. Any
voluntary reduction of the Commitment under this Section shall be applied to
reduce the Reduction Amount for the next following Reduction Date (to the extent
of such reduction) and thereafter to subsequent Reduction Dates (to the extent
not previously applied) in the order of their occurrence.
2.7 OPTIONAL PREPAYMENTS. Subject to Section 3.4, the Company may, at
any time or from time to time, upon written notice, which notice must be
received by the Administrative Agent at least (a) three Business Days prior to
any prepayment of Offshore Rate Loans; and (b) on the Business Day of the
prepayment of any Base Rate Loans, ratably prepay Loans in whole or in part, in
amounts of (i) with respect to Offshore Rate Loans, $500,000 or any multiple
thereof in excess thereof, and (ii) with respect to Base Rate Loans, $200,000 or
any multiple thereof in excess thereof. Such notice of prepayment shall specify
the date and amount of such prepayment and whether such prepayment is of Base
Rate Loans or Offshore Rate Loans, or any combination thereof. Such notice shall
not thereafter be revocable by the Company, and the Administrative Agent will
promptly notify each Bank of such Bank's Pro Rata Share of such prepayment. If
such notice is given by the Company, the Company shall make such prepayment and
the payment amount specified in such notice shall be due and payable on the date
specified therein, together with accrued interest in the case of Offshore Rate
Loans to each such date on the amount prepaid and any amounts required pursuant
to Section 3.4.
2.8 MANDATORY PREPAYMENTS OF LOANS; MANDATORY COMMITMENT REDUCTIONS.
(a) DISPOSITIONS. If the Company or any of its Restricted Subsidiaries
shall at any time or from time to time make or agree to make a Disposition other
than an Excluded Disposition, then (i) the Company shall promptly notify the
Administrative Agent of such proposed Disposition (including a calculation of
the amount of the estimated Net Proceeds to be received by the Company in
respect thereof) and (ii) to the extent the Net Proceeds of such Disposition are
not used in a Covered Acquisition ("Excess Net Proceeds"), such Excess Net
Proceeds shall be used to prepay the Loans in an amount equal to such Excess Net
Proceeds. Any prepayments required to be made pursuant to this Section 2.8(a)
shall be made on the 361st day in accordance with the definition of Covered
Acquisition, after the date of such Disposition (the "Prepayment Date"). The
Commitment of each Bank shall automatically be reduced by an amount equal to
such Bank's Pro Rata Share of such Excess Net Proceeds on the
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Prepayment Date. Such reduction shall be applied to future automatic reductions
of the Aggregate Commitment in the inverse order of their scheduled occurrence.
All accrued commitment fees on the portion of the Commitment reduced to, but not
including the Prepayment Date, shall be paid on the Prepayment Date.
(b) AUTOMATIC REDUCTION OF COMMITMENT. Subject to the last sentence of
Section 2.6, on each Reduction Date, the Aggregate Commitment shall
automatically be reduced by the applicable Reduction Amount.
(c) MANDATORY PREPAYMENTS FROM COMMITMENT REDUCTIONS. The Company shall
prepay all Loans outstanding in excess of the Commitments as from time to time
reduced pursuant to Section 2.6 or 2.8.
(d) PREPAYMENTS IN GENERAL. Any prepayments pursuant to this Section
2.8 shall be applied first to any Base Rate Loans then outstanding and then to
Offshore Rate Loans with the shortest Interest Periods remaining. Prepayments of
Offshore Rate Loans shall be accompanied by accrued interest thereon to the date
of prepayment on the amount prepaid and any amounts required pursuant to Section
3.4.
2.9 MATURITY DATE. All principal and accrued and unpaid interest on all
Loans shall be due on the Maturity Date.
2.10 INTEREST.
(a) Subject to Section 2.10(c) and (d), each Loan shall bear interest
on the outstanding principal amount thereof from the date when made until it
becomes due at a rate per annum equal to the Offshore Rate or the Base Rate, as
the case may be, plus the Applicable Amount.
(b) Interest on each Loan shall be paid in arrears on each Interest
Payment Date. Interest shall also be paid on the date of any prepayment of
Offshore Rate Loans pursuant to Section 2.7 and 2.8 for the portion of the Loans
so prepaid and upon payment (including prepayment) in full thereof and, during
the existence of any Event of Default, interest shall be paid on demand.
(c) Subject to Section 2.10(d), during the continuation of any Event of
Default or after acceleration pursuant to Section 8.2, the Company shall pay
interest (after as well as before entry of judgment thereon to the extent
permitted by law) on the principal amount of all Obligations due and unpaid, at
a rate per annum which is determined by adding 2% per annum to the Applicable
Amount then in effect for such Loans and, in the case of Obligations not subject
to an Applicable Amount, at a rate per annum equal to the Base Rate plus the
Applicable Amount plus 2%; provided, however, that, on and after the expiration
of any Interest Period applicable to any Offshore Rate Loan outstanding on the
date of occurrence of such Event of Default or acceleration, the principal
amount of such Loan shall, during the
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continuation of such Event of Default or after acceleration, bear interest at a
rate per annum equal to the Base Rate plus the Applicable Amount plus 2%.
(d) It is the intention of the parties hereto to comply with applicable
usury laws (now or hereafter enacted); accordingly, notwithstanding any
provision to the contrary in this Agreement, any Notes, the other Loan
Documents, or any other document relating hereto, in no event shall this
Agreement or any such other document require the payment or permit the
collection of interest in excess of the maximum amount permitted by such laws.
If for any circumstances whatsoever, fulfillment of any provision of any Loan
Document shall involve transcending the limit of validity prescribed by law for
the collection or charging of interest, then, ipso facto, the obligation to be
fulfilled shall be reduced to the limit of such validity, and if for any such
circumstances a Bank shall ever receive anything of value as interest or deemed
interest by applicable law under this Agreement, any Notes, the other Loan
Documents, or any other document pertaining hereto or otherwise an amount that
would exceed the highest lawful rate, such amount that would be excessive
interest shall be applied to the reduction of the principal amount owing
hereunder and under any Notes or on account of any other indebtedness of the
Company to the Administrative Agent and the Banks, and not to the payment of
interest, or if such excessive interest exceeds the unpaid balance of principal
of such indebtedness, such excess shall be refunded to the Company. In
determining whether or not the interest paid or payable with respect to any
indebtedness of the Company to the Administrative Agent and the Banks, under any
specific contingency, exceeds the highest lawful rate, the Company and the
Administrative Agent and the Banks shall, to the maximum extent permitted by
applicable law, (a) characterize any non-principal payment as an expense, fee or
premium rather than as interest, (b) exclude voluntary prepayments and the
effects thereof, (c) amortize, prorate, allocate and spread the total amount of
interest throughout the term of such indebtedness so that the actual rate of
interest on account of such indebtedness does not exceed the maximum amount
permitted by applicable law, and/or (d) allocate interest between portions of
such indebtedness to the end that no such portion shall bear interest at a rate
greater than that permitted by applicable law.
For purpose of this Section 2.10(d), the term "applicable law" means
the internal laws of the State of New York, but, to the extent, contrary to the
express intent of the parties, New York law is found to be inapplicable to this
Agreement, then "applicable law" also means that law in effect from time to time
and applicable to this loan transaction which lawfully permits the charging and
collection of the highest permissible, lawful, non-usurious rate of interest on
such loan transaction and this Agreement, and, to the extent controlling, laws
of the United States of America. It is intended that, in the event that,
notwithstanding the parties' express choice of New York law to be applicable to
this Agreement, if the laws of the State of Texas are included in determining
applicable law, Chapter One ("Chapter One"), Title 79, Revised Civil Statutes of
Texas, 1925, as amended (the "Texas Credit Code"), shall be included in any such
determination, and that, for the purpose of applying said Chapter One to this
Agreement, the highest lawful rate shall be the "indicated rate ceiling" (as
defined in Chapter One). Any Bank may, from time to time, as to current and
future balances, implement any other ceiling under Chapter One by notice to the
Company, if and to the extent, permitted by Chapter One. The Company expressly
agrees, pursuant to Article 15.10(b) of Chapter Fifteen ("Chapter Fifteen") of
the Texas Credit Code, that Chapter Fifteen shall not apply to this Agreement or
to
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any Loan and that neither this Agreement nor any Loan shall be governed by or
subject to the provision of Chapter Fifteen in any manner whatsoever.
2.11 FEES.
(a) FEES. The Company shall pay to the Arrangers for their own accounts
arrangement fees in the amounts agreed upon between the Company and each
Arranger.
(b) AMENDMENT FEE. The Company shall pay to the Administrative Agent,
for the account of each Bank which was a party to the Existing Credit Facility,
an amendment fee equal to five basis points of such Bank's commitment under the
Existing Credit Facility which is continued hereunder.
(c) UPFRONT FEE. The Company shall pay to the Administrative Agent, for
the account of each Bank, an upfront fee equal to (a) in the case of a Bank
submitting a commitment proposal of at least $35,000,000, 20 basis points on the
amount by which its final allocated Commitment hereunder has increased from the
Existing Credit Facility, and (b) in the case of a Bank submitting a commitment
proposal of less than $35,000,000, 15 basis points on the amount by which its
final allocated Commitment hereunder has increased from the Existing Credit
Facility; provided, however, that in the case of any Bank not a party to the
Existing Credit Facility, the foregoing upfront fee shall be based on entire
proposed commitment submitted by such Bank and payable on the entirety of the
final allocated Commitment of such Bank.
(d) COMMITMENT FEE. The Company shall pay to the Administrative Agent
for the account of each Bank a commitment fee on the average daily unused
portion of such Bank's Commitment, computed on a quarterly basis in arrears on
the last Business Day of each calendar quarter based upon the daily utilization
for that quarter as calculated by the Administrative Agent, at a rate per annum
specified for the Commitment fee in the definition of Applicable Amount. The
Commitment Fee shall be in effect from the date the most recent certificate
delivered pursuant to Section 4.1(g) or 6.2(a) is received by the Administrative
Agent to but excluding the date the next such certificate is received; provided;
however, that if the Company fails to timely deliver the next such certificate,
the Commitment Fee from the date such certificate was due to but excluding the
date such certificate is received by the Administrative Agent (the "Commitment
Delinquent Period") shall be the higher of (a) the Commitment Fee already in
effect and (b) the Commitment Fee as set forth in such certificate when
received, retroactively applied to the Commitment Delinquent Period. Such
commitment fee shall accrue from the Closing Date to the Maturity and shall be
due and payable quarterly in arrears on the last Business Day of each quarter
commencing March 31, 1998, with the final payment to be made on the Maturity
Date; provided that, in connection with the termination of Commitments pursuant
to Section 2.6 or Section 2.8(a), the accrued commitment fee calculated for the
period ending on such date shall also be paid on the date of the termination.
The commitment fees provided in this Section shall accrue at all times after the
above-mentioned commencement date, including at any time during which one or
more conditions in Section 4 are not met.
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(e) AGENCY FEE. The Company shall pay to the Administrative Agent for
the Administrative Agent's own account an agency fee in the amount and at the
times as agreed upon in writing between the Company and the Administrative
Agent.
2.12 COMPUTATION OF FEES AND INTEREST.
(a) All computations of interest payable in respect of Base Rate Loans
at all times as the Base Rate is determined by BofA's "reference rate" shall be
made on the basis of a year of 365 or 366 days, as the case may be, and actual
days elapsed. All other computations of fees and interest under this Agreement
shall be made on the basis of a 360-day year and actual days elapsed, which
results in more interest being paid than if computed on the basis of a 365-day
year. Interest and fees shall accrue during each period during which interest or
such fees are computed from the first day thereof to the last day thereof.
(b) The Administrative Agent will, with reasonable promptness, notify
the Company and the Banks of each determination of an Offshore Rate; provided
that any failure to do so shall not relieve the Company of any liability
hereunder or provide the basis for any claim against the Administrative Agent.
Any change in the interest rate on a Loan resulting from a change in the
Applicable Amount or Eurodollar Reserve Percentage shall become effective as of
the opening of business on the day on which such change in the Applicable Amount
or Eurodollar Reserve Percentage becomes effective. The Administrative Agent
will with reasonable promptness notify the Company and the Banks of the
effective date and the amount of each such change, provided that any failure to
do so shall not relieve the Company of any liability hereunder or provide the
basis for any claim against the Administrative Agent.
(c) Any change in the interest rate on a Loan resulting from a change
in the Applicable Amount or Eurodollar Reserve Percentage shall become effective
as of the opening of business on the day on which such change in the Applicable
Amount or Eurodollar Reserve Percentage becomes effective. Each determination of
an interest rate by the Administrative Agent pursuant hereto shall be conclusive
and binding on the Company and the Banks in the absence of manifest error.
2.13 PAYMENTS BY THE COMPANY.
(a) All payments of principal, interest and fees hereunder shall be in
immediately available funds without deduction or setoff and delivered to the
Administrative Agent for credit to:
Bank of America National Trust
and Savings Association
Att: Agency Administrative Services #5596
ABA No. 000-000-000
Bancontrol Account No. 12332-14226
Reference: Cinemark USA, Inc.
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not later than 11:00 A.M. (San Francisco time) on the date due; funds received
by the Administrative Agent after that time shall be deemed to have been paid by
the Company on the next succeeding Business Day.
(b) Whenever any payment hereunder shall be stated to be due on a day
other than a Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of interest or fees, as the case may be; subject to the provisions
set forth in the definition of "Interest Period" herein.
(c) Unless the Administrative Agent shall have received notice from the
Company prior to the date on which any payment is due to the Banks hereunder
that the Company will not make such payment in full as and when required
hereunder, the Administrative Agent may assume that the Company has made such
payment in full to the Administrative Agent on such date in immediately
available funds and the Administrative Agent may (but shall not be so required),
in reliance upon such assumption, cause to be distributed to each Bank on such
due date an amount equal to the amount then due such Bank. If and to the extent
the Company shall not have made such payment in full to the Administrative
Agent, each Bank shall repay to the Administrative Agent on demand such amount
distributed to such Bank, together with interest thereon for each day from the
date such amount is distributed to such Bank until the date such Bank repays
such amount to the Administrative Agent, at the Federal Funds Rate as in effect
for each such day.
2.14 PAYMENTS BY THE BANKS TO THE ADMINISTRATIVE AGENT.
(a) Unless the Administrative Agent shall have received notice from a
Bank on the Closing Date or, with respect to each Borrowing after the Closing
Date, by 9:30 a.m. (San Francisco time) (i) one Business Day prior to the date
of any proposed Borrowing of Offshore Rate Loans, or (ii) on the date of any
proposed Borrowing of Base Rate Loans that such Bank will not make available to
the Administrative Agent as and when required hereunder for the account of the
Company the amount of that Bank's Pro Rata Share of the Borrowing, the
Administrative Agent may assume that each Bank has made such amount available to
the Administrative Agent in immediately available funds on the Borrowing date
and the Administrative Agent may (but shall not be so required), in reliance
upon such assumption, make available to the Company on such date a corresponding
amount. If and to the extent any Bank shall not have made its full amount
available to the Administrative Agent in immediately available funds and the
Administrative Agent in such circumstances has made available to the Company
such amount, that Bank shall on the next Business Day following the date of such
Borrowing make such amount available to the Administrative Agent, together with
interest at the Federal Funds Rate for and determined as of each day during such
period. A notice of the Administrative Agent submitted to any Bank with respect
to amounts owing under this Section 2.14(a) shall be conclusive, absent manifest
error. If such amount is so made available, such payment to the Administrative
Agent shall constitute such Bank's Loan on the date of Borrowing for all
purposes of this Agreement. If such amount is not made available to the
Administrative Agent on the next Business Day following the date of such
Borrowing, the
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Administrative Agent shall notify the Company of such failure to fund and, upon
demand by the Administrative Agent, the Company shall pay such amount to the
Administrative Agent for the Administrative Agent's account, together with
interest thereon for each day elapsed since the date of such Borrowing, at a
rate per annum equal to the interest rate applicable at the time to the Loans
comprising such Borrowing.
(b) The failure of any Bank to make any Loan on any date of borrowing
shall not relieve any other Bank of any obligation hereunder to make a Loan on
the date of such borrowing, but no Bank shall be responsible for the failure of
any other Bank to make the Loan to be made by such other Bank on the date of any
Borrowing.
2.15 SHARING OF PAYMENTS, ETC. If, other than as expressly provided
elsewhere herein, any Bank shall obtain on account of the Loans made by it any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) in excess of its Pro Rata Share of payments on account of
the Loans obtained by all the Banks, such Bank shall forthwith (a) notify the
Administrative Agent of such fact, and (b) purchase from the other Banks such
participations in the Loans made by them as shall be necessary to cause such
purchasing Bank to share the excess payment ratably with each of them; provided,
however, that if all or any portion of such excess payment is thereafter
recovered from the purchasing Bank, such purchase shall to that extent be
rescinded and each other Bank shall repay to the purchasing Bank the purchase
price paid therefor, together with an amount equal to such paying Bank's Pro
Rata Share (according to the proportion of (i) the amount of such paying Bank's
required repayment to (ii) the total amount so recovered from the purchasing
Bank) of any interest or other amount paid or payable by the purchasing Bank in
respect of the total amount so recovered. The Company agrees that any Bank so
purchasing a participation from another Bank pursuant to this Section 2.15 may,
to the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off, but subject to Section 10.9) with respect to
such participation as fully as if such Bank were the direct creditor of the
Company in the amount of such participation. The Administrative Agent will keep
records (which shall be conclusive and binding in the absence of manifest error)
of participations purchased pursuant to this Section 2.15 and will in each case
notify the Banks following any such purchases or repayments.
2.16 SECURITY. All obligations of the Company under this Agreement, any
Notes and all other Loan Documents shall be secured in accordance with the
Pledge Agreements.
SECTION 3
TAXES, YIELD PROTECTION AND ILLEGALITY
3.1 TAXES.
(a) Subject to Section 3.1(g), any and all payments by the Company to
each Bank or the Administrative Agent under this Agreement shall be made free
and clear of, and without deduction or withholding for, any and all present or
future taxes, levies, imposts, deductions,
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charges or withholdings, and all liabilities with respect thereto, excluding, in
the case of each Bank and the Administrative Agent, such taxes (including income
taxes or franchise taxes) as are imposed on or measured by each Bank's net
income by the jurisdiction under the laws of which such Bank or the
Administrative Agent, as the case may be, is organized or maintains a Lending
Office or any political subdivision thereof (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes").
(b) In addition, the Company shall pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies which arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement or any
other Loan Documents (hereinafter referred to as "Other Taxes").
(c) Subject to Section 3.1(g), the Company shall indemnify and hold
harmless each Bank and the Administrative Agent for the full amount of Taxes or
Other Taxes (including any Taxes or Other Taxes imposed by any jurisdiction on
amounts payable under this Section 3.1) paid by such Bank or the Administrative
Agent and any liability (including penalties, interest, additions to tax and
expenses) arising therefrom or with respect thereto, whether or not such Taxes
or Other Taxes were correctly or legally asserted, provided that, in the case of
penalties, interest, additions to tax and expenses, such Bank or the
Administrative Agent has timely notified the Company after it has been notified
of its liability for such amounts. Payment under this indemnification shall be
made within 30 days from the date the Bank or the Administrative Agent makes
written demand therefor.
(d) If the Company shall be required by law to deduct or withhold any
Taxes or Other Taxes from or in respect of any sum payable hereunder to any Bank
or the Administrative Agent, then, subject to Section 3.1(g): (i) the sum
payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 3.1) such Bank or the Administrative Agent, as the case may be,
receives an amount equal to the sum it would have received had no such
deductions been made; (ii) the Company shall make such deductions, and (iii) the
Company shall pay the full amount deducted to the relevant taxation authority or
other authority in accordance with applicable law.
(e) Within 30 days after the date of any payment by the Company of
Taxes or Other Taxes, the Company shall furnish to the Administrative Agent the
original or a certified copy of a receipt evidencing payment thereof, or other
evidence of payment satisfactory to the Administrative Agent.
(f) Each Bank which is a foreign person (i.e., a person other than a
United States person for United States Federal income tax purposes) agrees that:
(i) it shall, no later than the Closing Date (or, in the case of a Bank which
becomes a party hereto pursuant to Section 10.8 after the Closing Date, the date
upon which the Bank becomes a party hereto) deliver to the Company through the
Administrative Agent two accurate and complete signed originals of Internal
Revenue Service Form 4224 or any successor thereto ("Form 4224"), or two
accurate
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and complete signed originals of Internal Revenue Service Form 1001 or any
successor thereto ("Form 1001"), as appropriate, in each case indicating that
the Bank is on the date of delivery thereof entitled to receive payments of
principal, interest and fees under this Agreement free from withholding of
United States Federal income tax; (ii) if at any time the Bank makes any changes
necessitating a new Form 4224 or Form 1001, it shall with reasonable promptness
deliver to the Company through the Administrative Agent in replacement for, or
in addition to, the forms previously delivered by it hereunder, two accurate and
complete signed originals of Form 4224; or two accurate and complete signed
originals of Form 1001, as appropriate, in each case indicating that the Bank is
on the date of delivery thereof entitled to receive payments of principal,
interest and fees under this Agreement free from withholding of United States
Federal income tax; (iii) it shall, before or promptly after the occurrence of
any event (including the passing of time but excluding any event mentioned in
(ii) above) requiring a change in or renewal of the most recent Form 4224 or
Form 1001 previously delivered by such Bank, deliver to the Company through the
Administrative Agent two accurate and complete original signed copies of Form
4224 or Form 1001 in replacement for the forms previously delivered by the Bank;
and (iv) it shall, promptly upon the Company's or the Administrative Agent's
reasonable request to that effect, deliver to the Company or the Administrative
Agent (as the case may be) such other forms or similar documentation as may be
required from time to time by any applicable law, treaty, rule or regulation in
order to establish such Bank's tax status for withholding purposes.
(g) The Company will not be required to pay any additional amounts in
respect of United States Federal income tax pursuant to Section 3.1(d) to any
Bank for the account of any Lending Office of such Bank or to indemnify any Bank
pursuant to Section 3.1(c): (i) if the obligation to pay such additional amounts
would not have arisen but for a failure by such Bank to comply with its
obligations under Section 3.1(f) in respect of such Lending Office; (ii) if such
Bank shall have delivered to the Company a Form 4224 in respect of such Lending
Office pursuant to Section 3.1(f), and such Bank at any time shall not be
entitled to exemption from deduction or withholding of United States Federal
income tax in respect of payments by the Company hereunder for the account of
such Lending Office for any reason other than a change in United States law or
regulations or in the official interpretation of such law or regulations by any
governmental authority charged with the interpretation or administration thereof
(whether or not having the force of law) after the date of delivery of such Form
4224; or (iii) if the Bank shall have delivered to the Company a Form 1001 in
respect of such Lending Office pursuant to Section 3.1(f), and such Bank at any
time shall not be entitled to exemption from deduction or withholding of United
States Federal income tax in respect of payments by the Company hereunder for
the account of such Lending Office for any reason other than a change in United
States law or regulations or any applicable tax treaty or regulations or in the
official interpretation of any such law, treaty or regulations by any
governmental authority charged with the interpretation or administration thereof
(whether or not having the force of law) after the date of delivery of such Form
1001.
(h) If, at any time, the Company requests any Bank to deliver any forms
or other documentation pursuant to Section 3.1(f)(iv), then the Company shall,
on demand of such Bank through the Administrative Agent, reimburse such Bank for
any costs and expenses (including
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expenses of outside legal counsel and the allocated costs of in-house counsel)
reasonably incurred by such Bank in the preparation or delivery of such forms or
other documentation.
(i) If the Company is required to pay additional amounts to any Bank or
the Administrative Agent pursuant to Section 3.1(d), then such Bank shall use
its reasonable best efforts (consistent with legal and regulatory restrictions)
to change the jurisdiction of its Lending Office so as to eliminate any such
additional payment by the Company which may thereafter accrue if such change in
the judgment of such Bank is not otherwise disadvantageous to such Bank.
3.2 ILLEGALITY.
(a) If any Bank shall reasonably determine that the introduction of any
Requirement of Law, or any change in any Requirement of Law or in the
interpretation or administration thereof, has made it unlawful, or that any
central bank or other Governmental Authority has asserted that it is unlawful,
for any Bank or its Lending Office to make Offshore Rate Loans, then, on notice
thereof by the Bank to the Company through the Administrative Agent, the
obligation of that Bank to make Offshore Rate Loans shall be suspended until the
Bank shall have notified the Administrative Agent and the Company that the
circumstances giving rise to such determination no longer exists.
(b) If a Bank shall determine that it is unlawful to maintain any
Offshore Rate Loan, the Company shall be deemed to have converted in full all
Offshore Rate Loans of that Bank then outstanding into Base Rate Loans either on
the last day of the Interest Period thereof if the Bank may lawfully continue to
maintain such Offshore Rate Loans to such day, or immediately, if the Bank may
not lawfully continue to maintain such Offshore Rate Loans. At the time of
conversion, the Company shall pay all interest accrued thereon, together with
any amounts required to be paid in connection therewith pursuant to Section 3.4.
(c) If the obligation of any Bank to make or maintain Offshore Rate
Loans has been terminated, the Company may elect, by giving notice to the Bank
through the Administrative Agent that all Loans which would otherwise be made by
the Bank as, or converted into, Offshore Rate Loans shall be instead Base Rate
Loans.
(d) Before giving any notice to the Administrative Agent pursuant to
this Section 3.2, the affected Bank shall designate a different Lending Office
with respect to its Offshore Rate Loans if such designation will avoid the need
for giving such notice or making such demand and will not, in the judgment of
the Bank, be illegal or otherwise disadvantageous to the Bank.
3.3 INCREASED COSTS AND REDUCTION OF RETURN. (a) If any Bank shall
reasonably determine that, due to either (i) the introduction of or any change
in or in the interpretation of any law or regulation or (ii) the compliance with
any guideline or request of general applicability from any central bank or other
Governmental Authority (whether or not having the force of law), there shall be
any increase in the cost to such Bank of agreeing to make or making, funding or
maintaining any Offshore Rate Loans
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(except for changes in the rate of tax on the overall net income of such Bank
imposed by the jurisdiction in which such Bank's principal executive office or
Lending Office is located), then the Company shall be liable for, and shall from
time to time, upon demand therefor by such Bank (with a copy of such demand to
the Administrative Agent), pay to such Bank, additional amounts as are
sufficient to compensate such Bank for such increased costs.
(b) If any Bank shall have reasonably determined that the introduction
of any applicable law, rule, regulation or guideline of general applicability
regarding capital adequacy, or any change therein or any change in the
interpretation or administration thereof by any central bank or other
Governmental Authority charged with the interpretation or administration
thereof, or compliance by the Bank (or its Lending Office) or any corporation
controlling the Bank, with any request, guideline or directive of general
applicability regarding capital adequacy (whether or not having the force of
law) of any such central bank or other authority issued after the date hereof,
affects or would affect the amount of capital required or expected to be
maintained by the Bank or any corporation controlling the Bank and (taking into
consideration such Bank's or such corporation's policies with respect to capital
adequacy and such Bank's desired return on capital) determines that the amount
of such Bank's capital is increased as a consequence of its obligations
hereunder, then, upon demand of such Bank, the Company shall immediately pay to
the Bank, from time to time as specified by the Bank, additional amounts
sufficient to compensate the Bank for such increase.
3.4 FUNDING LOSSES. The Company agrees to reimburse each Bank and to
hold each Bank harmless from any loss or expense which the Bank may sustain or
incur (excluding the loss of anticipated profits) from the liquidation or
reemployment of funds obtained by it to maintain its Offshore Rate Loans
hereunder or from fees payable to terminate the deposits from which such funds
were obtained as a consequence of: (a) the failure of the Company to make any
prepayment of principal of any Offshore Rate Loan or to make any payment after
any acceleration thereof; (b) the failure of the Company to borrow or continue
an Offshore Rate Loan or convert a Base Rate Loan to an Offshore Rate Loan after
the Company has given (or is deemed to have given) a Notice of Borrowing or a
Notice of Conversion/ Continuation; (c) the failure of the Company to make any
prepayment of an Offshore Rate Loan after the Company has given a notice in
accordance with Section 2.7; or (d) the prepayment of an Offshore Rate Loan on a
day which is not the last day of the Interest Period with respect thereto.
Solely for purposes of calculating amounts payable by the Company to the Banks
under this Section 3.4, each Offshore Rate Loan made by a Bank (and each related
reserve, special deposit or similar requirement) shall be conclusively deemed to
have been funded at the LIBOR (as defined in the definition of "Offshore Rate")
used in determining the Offshore Rate for such Offshore Rate Loan by a matching
deposit or other borrowing in the interbank eurodollar market for a comparable
amount and for a comparable period, whether or not such Offshore Rate Loan is in
fact so funded.
3.5 INABILITY TO DETERMINE RATES. If the Majority Banks shall have
determined that for any reason adequate and reasonable means do not exist for
ascertaining the Offshore Rate for any requested Interest Period with respect to
a proposed Offshore Rate Loan or if the Majority Banks advise the
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Administrative Agent that the Offshore Rate applicable for any requested
Interest Period with respect to a proposed Offshore Rate Loan does not
adequately and fairly reflect the cost to them of funding such Loan, they shall
notify the Administrative Agent who will forthwith give notice of such
determination to the Company and each Bank. Thereafter, the obligation of the
Banks to make Offshore Rate Loans hereunder shall be suspended until the
Administrative Agent upon the instruction of the Majority Banks revokes such
notice in writing. Upon receipt of such notice, the Company may revoke any
Notice of Borrowing or Notice of Conversion/ Continuation then submitted by it.
If the Company does not revoke such notice with respect to Loans, the Banks
shall make, convert or continue the Loans, as proposed by the Company, in the
amount specified in the applicable notice submitted by the Company, but such
Loans shall be made, converted or continued as Base Rate Loans instead of
Offshore Rate Loans.
3.6 SURVIVAL. The agreements and obligations of the Company in this
Section 3 shall survive the payment of all other Obligations. Any claim or
demand by any Bank for reimbursement or compensation under this Section 3 must
be made in writing; provided, however, that no such claim or demand may be made
in respect of any expense, cost, or economic loss incurred or suffered more than
12 months prior to the date of such claim or demand.
SECTION 4
CONDITIONS PRECEDENT
4.1 CONDITIONS OF INITIAL LOANS. The obligation of each Bank to make
its initial Loan hereunder is subject to the condition that the Administrative
Agent shall have received on or before the Closing Date all of the following, in
form and substance satisfactory to the Administrative Agent and each Bank and
(except for the instruments or documents representing Pledged Collateral) in
sufficient copies for each Bank:
(a) CREDIT AGREEMENT AND NOTES. This Agreement executed by the Company,
the Administrative Agent and each of the Banks and, if requested by any Bank
pursuant to Section 2.2(b), the Note(s) for such Bank executed by the Company.
(b) RESOLUTIONS; INCUMBENCY.
(i) Copies of the resolutions of the Board of Directors or the
executive committee of the Company approving and authorizing the
execution, delivery and performance by the Company of the Loan
Documents to which it is a party and authorizing the borrowing of the
Loans, certified as of the Closing Date by the Secretary or an
Assistant Secretary of the Company; and
(ii) A certificate of the Secretary or Assistant Secretary of the
Company, certifying the names and true signatures of the officers of
the Company authorized to execute and deliver the Loan Documents to
which they are a party.
(c) ARTICLES OF INCORPORATION; PARTNERSHIP AGREEMENTS, BY-LAWS AND GOOD
STANDING. Each of the following documents:
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(i) If amended or revised from those delivered in the connection
with the Existing Credit Facility, the articles or certificate of
incorporation of the Company and each corporate Pledgor as in effect on
the Closing Date, certified by the Secretary of State of the State of
incorporation of the Company as of a recent date and by the Secretary
or Assistant Secretary of the Company as of the Closing Date and the
bylaws of the Company as in effect on the Closing Date, certified by
the Secretary or Assistant Secretary of the Company as of the Closing
Date; and
(ii) A good standing certificate for the Company from the Secretary
of State of its state of incorporation and each state where the Company
is qualified to do business as a foreign corporation as of a recent
date.
(d) XXXXXXXX FAMILY PLEDGE AGREEMENT. The Xxxxxxxx Family Pledge
Agreement, duly executed and delivered by each Pledgor and the Company, in
appropriate form for recording, where necessary, together with all certificates
and instruments representing the Pledged Collateral and stock transfer powers
executed in blank.
(e) GUARANTY. The Guaranty, duly executed and delivered by Cinemark
Properties, Inc., the only Material Restricted Subsidiary.
(f) LEGAL OPINIONS. An opinion of the general counsel of the Company
addressed to the Administrative Agent and the Banks.
(g) PAYMENT OF FEES. The Company shall have paid all accrued and unpaid
fees, costs and expenses to the extent then due and payable on the Closing Date,
together with reasonable attorney fees, costs and expenses (including the
allocated cost of Administrative Agent's inhouse counsel and staff) to the
extent invoiced prior to or on the Closing Date, together with such additional
amounts of such fees, costs and expenses as shall constitute BofA's and the
Administrative Agent's reasonable estimate of such reasonable fees, costs and
expenses incurred or to be incurred through the closing proceedings, provided
that such estimate shall not thereafter preclude final settling of accounts
between the Company and the Administrative Agent; including any such costs, fees
and expenses arising under or referenced in Section 2.11. To the extent not
invoiced by the Closing Date, the Company shall pay such fees, costs and
expenses within 30 days of being invoiced therefor.
(h) CERTIFICATE. A certificate signed by a Responsible Officer, dated
as of the Closing Date (i) stating that: (A) the representations and warranties
contained in Section 5 are true and correct in all material respects on and as
of such date, as though made on and as of such date; (B) no Default or Event of
Default exists or would result from the initial Loan; and (C) there has occurred
since December 31, 1996, no event or circumstance that could reasonably be
expected to result in a Material Adverse Effect; and (ii) showing in detail the
calculations supporting such statement in respect of Sections 7.2, 7.10(g) and
(h) as of the Closing Date and Sections 7.10(f), 7.12 and 7.13 as of December
31, 1997.
(i) OTHER DOCUMENTS. Such other approvals, opinions or documents as the
Administrative Agent or any Bank may request.
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4.2 CONDITIONS TO ALL BORROWINGS. The obligation of each Bank to make
any Loan to be made by it hereunder (including its initial Loan) is subject to
the satisfaction of the following conditions precedent on the relevant Borrowing
Date:
(a) NOTICE OF BORROWING. The Administrative Agent shall have received a
Notice of Borrowing;
(b) CONTINUATION OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties made by the Company contained in Section 5 shall be true and
correct in all material respects on and as of such Borrowing Date, both before
and after giving effect to such Borrowing, with the same effect as if made on
and as of such Borrowing Date (except to the extent such representations and
warranties relate to an earlier date, in which case they were true and correct
as of such date); and
(c) NO EXISTING DEFAULT. No Default or Event of Default shall exist or
shall result from such Borrowing.
Each Notice of Borrowing submitted by the Company hereunder shall
constitute a representation and warranty by the Company hereunder that, as of
the date of each such notice and as of each Borrowing Date, the conditions in
Section 4.2 are satisfied.
SECTION 5
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Administrative Agent and
each Bank that:
5.1 CORPORATE EXISTENCE AND POWER. The Company and each of its
Restricted Subsidiaries: (a) is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation;
(b) 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; (c) 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 (d) is in compliance
with all Requirements of Law; except, in each case referred to in clause (b),
(c) or clause (d), to the extent that the failure to do so could not reasonably
be expected to have a Material Adverse Effect.
5.2 CORPORATE AUTHORIZATION; NO CONTRAVENTION. The execution, delivery
and performance by the Company, of this Agreement and any other Loan Document to
which the Company is party, have been duly authorized by all necessary corporate
action, and do not and would not be expected to: (a) contravene the terms of any
of the Company's articles of incorporation, bylaws or other organization
documents; (b) 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 Company is a party or any order, injunction, writ or decree
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of any Governmental Authority to which the Company or its Property is subject;
or (c) violate any Requirement of Law.
5.3 GOVERNMENTAL AUTHORIZATION. 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, the Company of
the Agreement or any other Loan Document or, prior to the consummation of the
Recapitalization, the Recapitalization Agreements, except for (a) such filings,
recordations and registrations as contemplated by the Pledge Agreements in order
to perfect, continue or enforce the security interests in the Collateral
thereunder, (b) routine corporate filings to maintain the corporate good
standing of the Company and its Restricted Subsidiaries, and (c) with respect to
the Recapitalization Agreements, such approvals, consents, exemptions,
authorizations, notices or filings which will have been obtained or taken prior
to the consummation of the Recapitalization.
5.4 BINDING EFFECT. This Agreement and each other Loan Document to
which the Company or any Pledgor is a party constitute the legal, valid and
binding obligations of the Company and such Pledgor, enforceable against such
Person in accordance with their respective 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.
5.5 LITIGATION. There are no actions, suits, proceedings, claims or
disputes pending, or to the knowledge of the Company, threatened or
contemplated, at law, in equity, in arbitration or before any Governmental
Authority, against the Company, or its Restricted Subsidiaries or any of their
respective Properties which: (a) purport to affect or pertain to this Agreement,
or any other Loan Document, or any of the transactions contemplated hereby or
thereby; (b) purport to affect or pertain to the Recapitalization or any other
transaction contemplated in connection with the Recapitalization Agreements and
related documents; or (c) if determined adversely to the Company, or its
Restricted Subsidiaries, could reasonably be expected to have a Material Adverse
Effect. No injunction, writ, temporary restraining order or any order of any
nature has been issued by any court or other Governmental Authority purporting
to enjoin or restrain the execution, delivery and performance of this Agreement
or any other Loan Document, or directing that the transactions provided for
herein or therein not be consummated as herein or therein provided.
5.6 NO DEFAULT. No Default or Event of Default exists or would result
from the incurring of any Obligations by the Company or the grant or perfection
of the Administrative Agent's Liens on the Collateral. Neither the Company nor
any of its Restricted Subsidiaries has received notice or has actual knowledge
that it is in default under or with respect to any Contractual Obligation in any
respect which, individually or together with all such defaults, could reasonably
be expected to have a Material Adverse Effect.
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5.7 ERISA COMPLIANCE. (a) Schedule 5.7 lists all Plans and separately
identifies Plans intended to be Qualified Plans and Multiemployer Plans. Each
Plan is in compliance in all material respects with the applicable provisions of
ERISA, the Code and other Federal or state law, including all requirements under
the Code or ERISA for filing reports (which are true and correct in all material
respects as of the date filed), and benefits have been paid in accordance with
the provisions of the Plan. Each Qualified Plan and Multiemployer Plan has been
determined by the IRS to qualify under Section 401 of the Code, and the trusts
created thereunder have been determined to be exempt from tax under the
provisions of Section 501 of the Code, and to the knowledge of the Company
nothing has occurred which would cause the loss of such qualification or
tax-exempt status.
(b) There is no outstanding liability under Title IV of ERISA with
respect to any Plan maintained or sponsored by the Company or any ERISA
Affiliate, nor with respect to any Plan to which the Company or any ERISA
Affiliate contributes or is obligated to contribute. No Plan subject to Title IV
of ERISA has any Unfunded Pension Liability. No member of the Controlled Group
has ever represented, promised or contracted (whether in oral or written form)
to any current or former employee (either individually or to employees as a
group) that such current or former employee(s) would be provided, at any cost to
any member of the Controlled Group, with life insurance or employee welfare plan
benefits (within the meaning of Section 3(1) of ERISA) following retirement or
termination of employment. To the extent that any member of the Controlled Group
has made any such representation, promise or contract, such member has expressly
reserved the right to amend or terminate such life insurance or employee welfare
plan benefits with respect to claims not yet incurred. Members of the Controlled
Group have complied in all material respects with the notice and continuation
coverage requirements of Section 4980B of the Code.
(c) No ERISA Event has occurred or is reasonably expected to occur with
respect to any Plan. There are no pending or, to the knowledge of the Company,
threatened claims, actions or lawsuits, other than routine claims for benefits
in the usual and ordinary course, asserted or instituted against (i) any Plan
maintained or sponsored by the Company or its assets, (ii) any member of the
Controlled Group with respect to any Qualified Plan, or (iii) any fiduciary with
respect to any Plan for which the Company may be directly or indirectly liable,
through indemnification obligations or otherwise.
(d) Neither the Company nor any ERISA Affiliate has incurred nor
reasonably expects to incur (i) any liability (and no event has occurred which,
with the giving of notice under Section 4219 of ERISA, would result in such
liability) under Section 4201 or 4243 of ERISA with respect to a Multiemployer
Plan or (ii) any liability under Title IV of ERISA (other than premiums due and
not delinquent under Section 4007 of ERISA) with respect to a Plan. Neither the
Company nor any ERISA Affiliate has transferred any Unfunded Pension Liability
to a Person other than the Company or an ERISA Affiliate or otherwise engaged in
a transaction that could be subject to Section 4069 or 4212(c) of ERISA. No
member of the Controlled Group has engaged, directly or indirectly, in a
non-exempt prohibited transaction (as defined in Section 4975 of the Code or
Section 406 of ERISA) in connection with any Plan which could reasonably be
expected to have a Material Adverse Effect.
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5.8 USE OF PROCEEDS. The proceeds of the Loans are intended to be and
shall be used solely for the purposes set forth in and permitted by Section
6.11, and are intended to be and shall be used in compliance with Section 7.7.
5.9 TITLE TO PROPERTIES. The Company and each of its Restricted
Subsidiaries has good record and marketable (or indefeasible in the State of
Texas) title in fee simple to, or valid leasehold interests in, all real
Property necessary or used in the ordinary conduct of its business, except for
such defects in title as could not, individually or in the aggregate, have a
Material Adverse Effect. As of the Closing Date, the Property of the Company and
its Restricted Subsidiaries is subject to no Liens, other than as permitted by
Section 7.1.
5.10 TAXES. The Company and its Restricted Subsidiaries have filed all
Federal and other material tax returns and reports required to be filed, and
have paid all Federal and other material taxes, assessments, fees and other
governmental charges levied or imposed upon them or their Properties, income or
assets that are due pursuant to such returns or reports before any such taxes,
assessments, fees or other charges became delinquent or any penalty accrued with
respect thereto, except those which are being contested in good faith by
appropriate proceedings and for which adequate reserves have been provided in
accordance with GAAP and no Notice of Lien has been filed or recorded. There is
no proposed tax assessment against the Company or any of its Restricted
Subsidiaries which could reasonably be expected to, if the assessment were made,
have a Material Adverse Effect.
5.11 FINANCIAL CONDITION.
(a) The audited consolidated financial statements of financial
condition of the Company and its Subsidiaries dated December 31, 1996, and the
related consolidated statements of operations, shareholders' equity and cash
flows for the fiscal year ended on that date: (i) were prepared in accordance
with GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein; (ii) fairly present the financial condition
of the Company and its Subsidiaries as of the date thereof and results of
operations for the period covered thereby; and (iii) show all material
indebtedness and other liabilities, direct or contingent of the Company and its
consolidated Subsidiaries as of the date thereof, including liabilities for
taxes, material commitments and Contingent Obligations that are required to be
included on the Company's consolidated financial statements in accordance with
GAAP.
(b) Since December 31, 1996, there has been no event which could
reasonably be expected to have a Material Adverse Effect.
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5.12 ENVIRONMENTAL MATTERS.
(a) The on-going operations of the Company and each of its Restricted
Subsidiaries comply in all respects with all Environmental Laws, except such
non-compliance which would not (if enforced in accordance with applicable law)
result in liability which could reasonably be expected to have a Material
Adverse Effect. The Company and each of its Restricted Subsidiaries has obtained
all licenses, permits, authorizations and registrations required under any
Environmental Law ("Environmental Permits") and necessary for its ordinary
course operations, all such Environmental Permits are in good standing, and the
Company and each of its Restricted Subsidiaries is in compliance with all
material terms and conditions of such Environmental Permits.
(b) To the knowledge of the Company, none of the Company, any of its
Restricted Subsidiaries or any of their respective present Property or
operations is subject to any outstanding material written order from or
agreement with any Governmental Authority nor subject to any judicial or
docketed administrative proceeding, respecting any Environmental Law,
Environmental Claim or Hazardous Material. There are no Hazardous Materials or
other conditions or circumstances existing with respect to any Property, or
arising from operations prior to the Closing Date, of the Company or any of its
Restricted Subsidiaries that would reasonably be expected to give rise to
Environmental Claims with a potential liability of the Company and its
Restricted Subsidiaries that could reasonably be expected to have a Material
Adverse Effect for any such condition, circumstance or Property. In addition,
(i) neither the Company's nor any of its Restricted Subsidiaries' Properties
have any underground storage tanks (x) that are not properly registered or
permitted under applicable Environmental Laws, or (y) that are leaking or
disposing of Hazardous Materials off-site in an amount that would require
remediation under Environmental Laws, and (ii) to the Company's actual knowledge
the Company and its Restricted Subsidiaries have notified all of their employees
of the existence, if any, of any health hazard arising from the conditions of
their employment and have met all notification requirements under Title III of
CERCLA and all other Environmental Laws.
5.13 CAPITAL STOCK; SUBSIDIARIES.
(a) Prior to the Recapitalization Date:
(i) CAPITAL STOCK OF COMPANY. The issued and outstanding capital
stock of the Company consists of Class A Common Stock and Class B
Common Stock. Subject to any statutory voting rights, all presently
exercisable voting rights in the Company are vested exclusively in its
outstanding shares of Class A Common Stock, each share of which is
entitled to one vote on every matter to come before the shareholders.
Subject to any contractual limitations applicable to the holders
thereof, each share of Class B Common Stock is convertible at any time,
at the option of the holder thereof, into one share of Class A Common
Stock. To the Company's knowledge, there are no existing options,
warrants, shareholder agreements, calls or commitments of any character
whatsoever relating to any of the Pledged Collateral other than the
Shareholders' Agreement; and
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(ii) PLEDGED COLLATERAL. The Pledged Collateral constitutes all the
outstanding capital stock of the Company owned by the Xxxxxxxx Family
and not less than 50% of the Class A Common Stock of the Company issued
and outstanding and a majority of all capital stock of the Company
issued and outstanding. As of the Closing Date, the Pledged Collateral
includes all of the Voting Stock.
(iii) SUBSIDIARIES. Schedule 5.13 lists all Subsidiaries of the
Company as of the Closing Date and correctly sets forth, with respect
to each Subsidiary, its name, its legal form, the number of its
outstanding shares or other ownership interests and the holders
thereof, the jurisdiction of its organization or formation, and whether
or not such Subsidiary is a Restricted Subsidiary, a Material
Restricted Subsidiary or an Unrestricted Subsidiary.
(b) From and after the Recapitalization Date:
(i) PLEDGED COLLATERAL. The Pledged Collateral constitutes all the
outstanding capital stock of the Company issued and outstanding, and
there will be no options, warrants, shareholder agreements, calls or
commitments of any character whatsoever relating to any of the Pledged
Collateral.
(ii) SUBSIDIARIES. Revised Schedule 5.13 delivered in accordance
with Section 6.12(b)(vii) lists all Subsidiaries of the Company as of
the Recapitalization Date and correctly sets forth, with respect to
each Subsidiary, its name, its legal form, the number of its
outstanding shares or other ownership interests and the holders
thereof, the jurisdiction of its organization or formation, and whether
or not such Subsidiary is a Restricted Subsidiary, a Material
Restricted Subsidiary or an Unrestricted Subsidiary.
(c) At all times the provisions of the Pledge Agreements are, or will
be upon execution, effective to create, in favor of the Administrative Agent for
the benefit of the Banks, a legal, valid and enforceable security interest in
all of the Collateral described therein; and the Pledged Collateral was
delivered to the Administrative Agent or its nominee in accordance with the
terms thereof. The Lien of the Pledge Agreement 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.
5.14 REGULATED ENTITIES. None of the Company, any Person controlling
the Company, or any Subsidiary of the Company, is (a) an "Investment Company"
within the meaning of the Investment Company Act of 1940; or (b) subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce Act, any state public utilities code, or any
other Federal or state statute or regulation limiting its ability to incur
Indebtedness.
5.15 NO BURDENSOME RESTRICTIONS. Neither the Company nor any of its
Restricted Subsidiaries is a party to or bound by any Contractual Obligation
(other than this Agreement and the Senior Subordinated Note
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Indentures), or subject to any charter or corporate restriction, or any
Requirement of Law, which could reasonably be expected to have a Material
Adverse Effect.
5.16 SOLVENCY. The Company is Solvent.
5.17 LABOR RELATIONS. There are no strikes, lockouts or other labor
disputes against the Company or any of its Restricted Subsidiaries, or, to the
Company's knowledge, threatened against or affecting the Company or any of its
Restricted Subsidiaries, and no significant unfair labor practice complaint is
pending against the Company or any of its Restricted Subsidiaries or, to the
knowledge of the Company, threatened against any of them before any Governmental
Authority, in each case, which could reasonably be expected to have a Material
Adverse Effect.
5.18 COPYRIGHTS, PATENTS, TRADEMARKS AND LICENSES, ETC. The Company or
its Restricted Subsidiaries own or are licensed or otherwise have the right to
use all of the patents, trademarks, service marks, trade names, copyrights,
franchises, authorizations and other rights that are material to the operation
of their respective businesses, without conflict with the rights of any other
Person. To the knowledge of the Company, no slogan or other advertising device,
product, process, method, substance, part or other material now employed, or now
contemplated to be employed by the Company or any of its Restricted Subsidiaries
infringes upon any rights held by any other Person; no claim or litigation
regarding any of the foregoing is pending or to the knowledge of the Company
threatened, and no patent, invention, device, application, principle or any
statute, law, rule, regulation, standard or code is to the knowledge of the
Company pending or proposed, which, in either case, could reasonably be expected
to have a Material Adverse Effect.
5.19 INSURANCE. The Properties of the Company and its Restricted
Subsidiaries are insured with financially sound and reputable insurance
companies or self-insured (including insurance through a related captive
insurance company), in such amounts, with such deductibles and covering such
risks as the Company believes is adequate in character and amount.
5.20 SENIOR SUBORDINATED NOTES. Each of the documents relating to the
Senior Subordinated Notes delivered to the Administrative Agent and the Banks by
the Company is true, accurate and complete, and there exist no amendments or
modifications thereto, or waivers thereof, which have not been delivered to the
Administrative Agent.
5.21 SWAP OBLIGATIONS. Neither the Company nor any of its Subsidiaries
has incurred any outstanding obligations under any Swap Contracts, other than
Permitted Swap Obligations. The Company has undertaken its own independent
assessment of its consolidated assets, liabilities and commitments and has
considered appropriate means of mitigating and managing risks associated with
such matters and has not relied on any swap counterparty or any Affiliate of any
swap counterparty in determining whether to enter into any Swap Contract.
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5.22 FULL DISCLOSURE. None of the representations or warranties made by
the Company in the Loan Documents as of the date such representations and
warranties are made or deemed made, and none of the statements contained in each
report or certificate (including any exhibits to such report or certificate)
furnished by or on behalf of the Company or any of its Restricted Subsidiaries
in connection with the Loan Documents, contains any untrue statement of a
material fact or omits any material fact required to be stated therein or
necessary to make the statements made therein, in light of the circumstances
under which they are made, not misleading.
SECTION 6
AFFIRMATIVE COVENANTS
The Company covenants and agrees that, so long as any Bank shall have
any Commitment hereunder, or any Loan or other Obligation (exclusive of future,
contingent or unliquidated amounts arising under indemnity agreements) shall
remain unpaid or unsatisfied, unless the Majority Banks waive compliance in
writing:
6.1 FINANCIAL STATEMENTS. The Company shall deliver to the
Administrative Agent (who shall deliver the same to the Banks) in form and
detail satisfactory to the Administrative Agent and the Majority Banks, with
sufficient copies for each Bank:
(a) as soon as available, but not later than 90 days after the end of
each fiscal year, a copy of the audited consolidated balance sheet of the
Company and its consolidated Subsidiaries as at the end of such year and the
related consolidated statements of income, shareholders' equity and cash flows
for such fiscal year, setting forth in each case in comparative form the figures
for the previous year, and accompanied by the report of Deloitte & Touche L.L.P.
or another nationally-recognized independent public accounting firm which report
shall state that such consolidated financial statements present fairly the
financial position for the periods indicated in conformity with GAAP applied on
a basis consistent with prior years except to the extent set forth therein. Such
opinion shall not be qualified or limited because of a restricted or limited
examination by such accountant of any material portion of the Company's or any
consolidated Subsidiary's records; and
(b) as soon as available, but not later than 45 days after the end of
each of the first three fiscal quarters of each year, a copy of the unaudited
consolidated balance sheet of the Company and its consolidated Subsidiaries as
of the end of such quarter and the related consolidated statements of income,
shareholders' equity and cash flows for the period commencing on the first day
and ending on the last day of such quarter, and certified by an appropriate
Responsible Officer as fairly presenting, in accordance with GAAP (subject to
normal year end adjustments), the financial position and the results of
operations of the Company and its Subsidiaries.
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6.2 CERTIFICATES; OTHER INFORMATION. The Company shall furnish to the
Administrative Agent (who shall deliver the same to the Banks), with sufficient
copies for each Bank:
(a) concurrently with the delivery of the financial statements referred
to in Sections 6.1(a) and (b) above, a certificate of a Responsible Officer (i)
stating that, to such officer's knowledge, the Company, during such period, has
observed and performed all of its covenants and other agreements, and satisfied
every condition contained in this Agreement to be observed, performed or
satisfied by it, and that such officer has obtained no knowledge of any Default
or Event of Default except as specified (by applicable Section reference) in
such certificate, and (ii) showing in detail the calculations supporting such
statement in respect of Sections 7.2, 7.4(j) and (q), 7.5(k), 7.10(e), (f), (g)
and (h), 7.12 and 7.13;
(b) as soon as available, but not later than 60 days after the
beginning of each fiscal year an annual operating budget for the Company and its
Restricted Subsidiaries for such fiscal year in a format satisfactory to the
Administrative Agent and the Banks;
(c) promptly after the same are sent, copies of all financial
statements and reports which the Company sends to its shareholders; and promptly
after the same are filed, copies of all financial statements and regular,
periodical or special reports which the Company may make to, or file with, the
Securities and Exchange Commission or any successor or similar Governmental
Authority; and
(d) promptly, such additional business, financial, corporate affairs
and other information as the Administrative Agent, at the request of any Bank,
may from time to time reasonably request.
6.3 NOTICES. The Company shall promptly notify the Administrative Agent
(who shall notify the Banks):
(a) of the occurrence of any Default or Event of Default, and of the
occurrence or existence of any event or circumstance that could reasonably be
expected to become a Default or Event of Default;
(b) of (i) any breach or non-performance of, or any default under, any
Contractual Obligation of the Company or any of its Restricted Subsidiaries
which could result in a Material Adverse Effect; (ii) any dispute, litigation,
investigation, proceeding or suspension which may exist at any time between the
Company or any of its Restricted Subsidiaries and any Governmental Authority
which could reasonably be expected to result in a Material Adverse Effect, and
(iii) any dispute, litigation or proceeding in which the relief sought is an
injunction or other stay of the performance of this Agreement or any Loan
Document or the consummation of the Recapitalization;
(c) of the commencement of, or any material development in, any
litigation or proceeding affecting the Company or any Restricted Subsidiary (i)
in which the amount of damages claimed is $2,500,000 (or its equivalent in
another currency or currencies) or more, (ii) in which injunctive or similar
relief is sought, which, with respect to clauses (i) and (ii) of
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this subsection (c), if adversely determined, could reasonably be expected to
have a Material Adverse Effect, or (iii) in which the relief sought is an
injunction or other stay of the performance of this Agreement or any Loan
Document;
(d) upon, but in no event later than 10 days after, becoming aware of
(in each case only to the extent that the amount involved exceeds $500,000) (i)
any and all enforcement, cleanup, removal or other governmental or regulatory
actions instituted, completed or threatened against the Company or any of its
Restricted Subsidiaries or any of their respective Properties pursuant to any
applicable Environmental Laws, (ii) any other Environmental Claims, and (iii)
any environmental or similar condition on any real property adjoining or in the
vicinity of the property of the Company or any Restricted Subsidiary that could
reasonably be anticipated to cause such property or any part thereof to be
subject to any restrictions on the ownership, occupancy, transferability or use
of such property under any Environmental Laws;
(e) of any of the following ERISA events affecting the Company or any
member of its Controlled Group (but in no event more than 10 days after such
event), together with a copy of any notice with respect to such event that may
be required to be filed with a Governmental Authority and any notice delivered
by a Governmental Authority to the Company or any member or its Controlled Group
with respect to such event: (i) an ERISA Event; (ii) the adoption of any new
Plan that is subject to Title IV of ERISA or Section 412 of the Code by any
member of the Controlled Group; (iii) the adoption of any amendment to a Plan
that is subject to Title IV of ERISA or Section 412 of the Code, if such
amendment results in a material increase in benefits or unfunded liabilities; or
(iv) the commencement of contributions by any member of the Controlled Group to
any Plan that is subject to Title IV of ERISA or Section 412 of the Code;
(f) any Material Adverse Effect subsequent to the date of the most
recent audited financial statements of the Company delivered to the Banks
pursuant to Section 6.1(a);
(g) of any material change in accounting policies or financial
reporting practices by the Company or any of its Restricted Subsidiaries;
(h) of any labor controversy resulting in or threatening to result in
any strike, work stoppage, boycott, shutdown or other labor disruption against
or involving the Company or any of its Restricted Subsidiaries, which could
reasonably be expected to have a Material Adverse Effect; and
(i) upon the request from time to time of the Administrative Agent, the
Swap Termination Values, together with a description of the method by which such
values were determined, relating to any then-outstanding Swap Contracts to which
the Company or any of its Restricted Subsidiaries is party.
Each notice pursuant to this Section shall be accompanied by a written
statement by a Responsible Officer of the Company setting forth details of the
occurrence referred to therein, and stating what action the Company proposes to
take with respect thereto and at what time. Each notice under Section 6.3(a)
shall describe with particularity any and all clauses or provisions of this
Agreement or other Loan Document that have been breached or violated.
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6.4 PRESERVATION OF CORPORATE EXISTENCE, ETC. The Company shall, and
shall cause each of its Restricted Subsidiaries to: (a) preserve and maintain in
full force and effect its corporate existence and good standing under the laws
of its state or jurisdiction of incorporation; provided, that the Company shall
not be required to maintain the existence of any Restricted Subsidiary if the
Board of Directors of the Company determines that the existence of such
Subsidiary is no longer necessary or desirable in the conduct of the Company's
business; (b) preserve and maintain in full force and effect all rights,
privileges, qualifications, permits, licenses and franchises necessary or
desirable in the normal conduct of its business as presently conducted; (c) use
its reasonable efforts, in the ordinary course of business, to preserve its
business organization and preserve the goodwill and business of the customers,
suppliers and others having material business relations with it; and (d)
preserve or renew all of its registered trademarks, trade names and service
marks, the non-preservation of which could reasonably be expected to have a
Material Adverse Effect.
6.5 MAINTENANCE OF PROPERTY. The Company shall maintain, and shall
cause each of its Restricted Subsidiaries to maintain, and preserve all its
Property which is used or useful in its business in good working order and
condition, ordinary wear and tear excepted and make all necessary repairs
thereto and renewals and replacements thereof except where the failure to do so
could not reasonably be expected to have a Material Adverse Effect.
6.6 INSURANCE. The Company shall maintain, and shall cause each of its
Restricted Subsidiaries to maintain, with financially sound and reputable
independent insurers or self insurance (including insurance through a related
captive insurance company), insurance with respect to its Properties and
business against loss or damage of the kinds as the Company believes is adequate
in character and amount; including workers' compensation insurance, public
liability and property and casualty insurance.
6.7 PAYMENT OF OBLIGATIONS. The Company shall, and shall cause its
Restricted Subsidiaries to, pay and discharge (a) all tax liabilities,
assessments and governmental charges or levies upon it or its properties or
assets before any penalty accrues thereon, unless the same are being contested
in good faith by appropriate proceedings and adequate reserves in accordance
with GAAP are being maintained by the Company or such Restricted Subsidiary; and
(b) all lawful claims which, if unpaid, would by law become a Lien upon its
Property prior to the time when any penalty or fine shall be incurred with
respect thereto, unless the same are being contested in good faith by
appropriate proceedings and adequate reserves in accordance with GAAP are being
maintained by the Company or such Restricted Subsidiary.
6.8 COMPLIANCE WITH LAWS. The Company shall comply, and shall cause
each of its Restricted Subsidiaries to comply, with all Requirements of Law of
any Governmental Authority having jurisdiction over it or its business
(including the Federal Fair Labor Standards Act), except such as may be
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contested in good faith or as to which a bona fide dispute may exist, or where
the failure to so comply could not reasonably be expected to have a Material
Adverse Effect.
6.9 INSPECTION OF PROPERTY AND BOOKS AND RECORDS. The Company shall
maintain and shall cause each of its Restricted Subsidiaries to maintain proper
books of record and account, in which full, true and correct entries in
conformity with GAAP consistently applied shall be made of all financial
transactions and matters involving the assets and business of the Company and
such Restricted Subsidiaries. The Company shall permit, and shall cause each of
its Restricted Subsidiaries to permit, representatives and independent
contractors of the Administrative Agent or any Bank to visit and inspect any of
their respective Properties, to examine their respective corporate, financial
and operating records, and make copies thereof or abstracts therefrom, and to
discuss their respective affairs, finances and accounts with their respective
directors, officers, and independent public accountants at such reasonable times
during normal business hours and as often as may be reasonably desired, upon
reasonable advance notice to the Company; provided, however, when an Event of
Default has occurred and is continuing the Administrative Agent or any Bank may
do any of the foregoing at the expense of the Company at any time during normal
business hours and without advance notice.
6.10 ENVIRONMENTAL LAWS. The Company shall, and shall cause each of its
Restricted Subsidiaries to, conduct its operations and keep and maintain its
Property in compliance with all Environmental Laws, except where the failure
could not reasonably be expected to, individually or in the aggregate, result in
liability in excess of $2,500,000. Upon the written request of the
Administrative Agent or any Bank, the Company shall submit and cause each of its
Restricted Subsidiaries to submit, to the Administrative Agent with sufficient
copies for each Bank, at the Company's sole cost and expense, at reasonable
intervals, a report providing an update of the status of any environmental,
health or safety compliance, hazard or liability issue identified in any notice
or report required pursuant to Section 6.3(d), that could, individually or in
the aggregate, result in liability in excess of $2,500,000.
6.11 USE OF PROCEEDS. The Company shall use the proceeds of the Loans
(a) to refinance the Existing Credit Facility, (b) for the acquisition,
construction and furnishing of theatres in the United States and Canada or other
activities incidental thereto and (c) for working capital and other general
corporate purposes.
6.12 RECAPITALIZATION TRANSACTION; CONDITIONS SUBSEQUENT. (a) The
Company may, in its sole discretion, effect the Recapitalization at any time;
provided, however, that the Company shall not enter into any Recapitalization
Agreement unless the form and substance thereof have been consented to by the
Majority Banks, which shall not be unreasonably withheld, delayed or
conditioned. Thereafter, the Company will consummate any Recapitalization only
in accordance with all the terms and conditions of such Recapitalization
Agreements without waiver of any material terms of any such agreements not
consented to by the Majority Banks, which shall not be unreasonably withheld,
delayed or conditional.
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(b) On the Recapitalization Date, the Company shall deliver, or cause
to be delivered, to the Administrative Agent all of the following, in form and
substance reasonably satisfactory to the Administrative Agent and in sufficient
copies for the Administrative Agent and each Bank:
(i) CINEMARK THEATRES HOLDINGS PLEDGE AGREEMENT. Against the
redelivery of all existing Pledged Collateral, the Cinemark Theatres
Holdings Pledge Agreement substantially in the form of Exhibit C-2 duly
executed by Cinemark Theatres Holdings, together with all certificates
and instruments representing all capital stock of the Company and
undated stock transfer powers executed in blank;
(ii) RESOLUTIONS; INCUMBENCY.
(A) True and complete copies of the resolutions of the Board
of Directors of Cinemark Theatres Holdings approving and
authorizing the execution, delivery and performance by Cinemark
Theatres Holdings of the Cinemark Theatres Holdings Pledge
Agreement, certified by the Secretary or an Assistant Secretary of
Cinemark Theatres Holdings as of the Recapitalization Date as being
in full force and effect without amendment or modification;
(B) A certificate of the Secretary or Assistant Secretary of
Cinemark Theatres Holdings, certifying the names and true
signatures of the officers of Cinemark Theatres Holdings authorized
to execute, deliver and perform, as applicable, the Cinemark
Theatres Holdings Pledge Agreement, and all other Loan Documents to
which it is a party; and
(C) A certificate of another officer of Cinemark Theatres
Holdings as to the incumbency and specimen signature of the
Secretary or Assistant Secretary, as the case may be, of Cinemark
Theatres Holdings.
(iii) ARTICLES OF INCORPORATION; BY-LAWS AND GOOD STANDING. Each of
the following documents:
(A) a true and complete copy of the articles or certificate of
incorporation of Cinemark Theatres Holdings as in effect on the
Recapitalization Date, certified by the Secretary of State (or
similar applicable Governmental Authority) of the state of
incorporation of Cinemark Theatres Holdings as of a recent date
prior to the Recapitalization Date and certified by the Secretary
or Assistant Secretary of Cinemark Theatres Holdings as of the
Recapitalization Date, as being in full force and effect without
amendment or modification, and the bylaws of Cinemark Theatres
Holdings as in effect on the Recapitalization Date, certified by
the Secretary or Assistant Secretary of Cinemark Theatres Holdings
as of the Recapitalization Date as being in full force and effect
without amendment or modification; and
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(B) certificate of existence for Cinemark Theatres Holdings
from the Secretary of State (or similar applicable Governmental
Authority) of its state of incorporation as of a recent date prior
to the Recapitalization Date.
(iv) LEGAL OPINIONS. An opinion of the general counsel of the
Company, dated the Recapitalization Date, addressed to the
Administrative Agent and the Banks as to the Cinemark Theatres Holdings
Pledge Agreement in form and substance satisfactory to the
Administrative Agent and the Banks.
(v) APPROVALS. A certificate from a Responsible Officer of Cinemark
Theatres Holdings that all material approvals and consents (including
those by shareholders, boards of directors and, to the extent material,
Governmental Authorities), necessary or advisable in connection with
the Recapitalization shall have been duly obtained or made and remain
in effect, with all applicable waiting periods having expired or having
been terminated and without any action having been taken by any Person
or Governmental Authority to enjoin, restrict or prevent the
consummation of the Recapitalization or otherwise to impose any
materially adverse condition upon the consummation of the
Recapitalization or on the operations of the Company (or the successor
to the Company) and its Subsidiaries after the consummation of the
Recapitalization.
(vi) NO LITIGATION CHALLENGING. A certificate of a Responsible
Officer of the Company to the effect that no legal or arbitral
proceedings shall be pending or, to the knowledge of the Company,
threatened by or before any Governmental Person with respect to the
Recapitalization or the making of any Loan that seeks to enjoin,
restrict or prevent the consummation of the Recapitalization or the
making of any Loan or otherwise to impose materially adverse conditions
upon the consummation of the Recapitalization or the making of any
Loan, or on the operations of the Company and its Restricted
Subsidiaries after the Recapitalization or that could, if adversely
determined, have a Material Adverse Effect.
(vii) REVISED SCHEDULE 5.13. A revised Schedule 5.13 listing all
Subsidiaries of the Company as of the Recapitalization Date and
including the information described in Section 5.13(b)(ii).
6.13 MATERIAL RESTRICTED SUBSIDIARIES TO BE GUARANTORS. The Company
shall cause each Subsidiary which is a Material Restricted Subsidiary or becomes
a Material Restricted Subsidiary after the Closing Date 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 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.
6.14 FURTHER ASSURANCES. The Company shall ensure that all written
information and reports and certificates (including any exhibits thereto)
furnished to the Administrative Agent or the Banks do not and
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will not contain any untrue statement of a material fact and do not and will not
omit to state any material fact or any fact necessary to make the statements
contained therein not misleading in light of the circumstances in which made,
and will promptly disclose to the Administrative Agent and the Banks and correct
any defect or error that may be discovered therein or in any Loan Document or in
the execution, acknowledgement or recordation thereof.
SECTION 7
NEGATIVE COVENANTS
The Company hereby covenants and agrees that, so long as any Bank shall
have any Commitment hereunder, or any Loan or other Obligation (exclusive of
future, contingent or unliquidated amounts arising under indemnity agreements)
shall remain unpaid or unsatisfied, unless the Majority Banks waive compliance
in writing:
7.1 LIMITATION ON LIENS. The Company shall not, and shall not suffer or
permit any of its Restricted Subsidiaries to, directly or indirectly, make,
create, incur, assume or suffer to exist any Lien upon or with respect to any
part of its Property, whether now owned or hereafter acquired, other than the
following (each a "Permitted Lien"):
(a) any Lien (other than Liens on the Collateral) existing on the
Property of the Company or its Restricted Subsidiaries on the Closing Date and
set forth in Schedule 7.5;
(b) any Lien created under any Loan Document;
(c) Liens for taxes, fees, assessments or other governmental charges
which are not delinquent or remain payable without penalty, or to the extent
that non-payment thereof is permitted by Section 6.7;
(d) carriers', warehousemen's, mechanics', landlords', materialmen's,
repairmen's or other similar Liens arising in the ordinary course of business
which are not delinquent or remain payable without penalty or are being
contested in good faith by appropriate proceedings and adequate reserves in
accordance with GAAP are being maintained by the Company or such Restricted
Subsidiary;
(e) Liens (other than any Lien imposed by ERISA in connection with a
proceeding by PBGC other than on the Collateral) consisting of pledges or
deposits required in the ordinary course of business as presently conducted in
connection with workers' compensation, unemployment insurance and other social
security legislation;
(f) Liens (other than Liens on the Collateral) on the Property of the
Company or any of its Restricted Subsidiaries securing (i) the performance of
bids, trade contracts (other than for borrowed money), leases, and statutory
obligations, (ii) contingent obligations on surety and appeal bonds, and (iii)
other obligations of a like nature; in each case, incurred in the ordinary
course of business provided that all Liens securing delinquent performance or
obligations could not (even if enforced) reasonably be expected to have a
Material Adverse Effect;
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(g) any attachment or judgment Lien, unless the judgment it secures
shall not have been discharged within 30 calendar days after the expiration of
any stay or final appeals;
(h) easements, rights-of-way, restrictions, minor defects or
irregularities in title and other similar encumbrances which, in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect or
materially interfere with the ordinary conduct of the businesses of the Company
and its Restricted Subsidiaries;
(i) Liens securing Purchase Money Obligations not exceeding $500,000 in
the aggregate at any one time;
(j) Liens securing Capital Lease Obligations on assets subject to such
Capital Leases, provided that such Capital Leases are permitted under Section
7.9(a);
(k) Liens arising solely by virtue of any statutory or common law
provision relating to banker's liens, rights of set-off or similar rights and
remedies as to deposit accounts or other funds maintained with a creditor
depository institution; provided that (i) such deposit account is not a
dedicated cash collateral account and is not subject to restrictions against
access by the Company in excess of those set forth by regulations promulgated by
the Federal Reserve Board, and (ii) such deposit account is not intended by the
Company or any of its Restricted Subsidiaries to provide collateral to the
depository institution;
(l) Liens on accounts receivable and inventory or cash deposits
collateralizing reimbursement obligations with respect to letters of credit, in
either case securing Indebtedness permitted to be incurred under Section 7.5(f);
(m) Liens consisting of pledges of cash collateral or government
securities to secure on a xxxx-to-market basis Permitted Swap Obligations only,
provided that the aggregate value of such collateral so pledged by the Company
and the Restricted Subsidiaries, together with Indebtedness in respect of
letters of credit securing Swap Contracts outstanding under Section 7.5(f), does
not at any time exceed $5,000,000;
(n) Lien of the trustee under Section 7.7 of the Senior Subordinated
Note Indentures on money or property held or collected by the trustee
thereunder; and
(o) any renewal of or substitution for any Lien permitted by any of the
preceding subsections, including without limitation in connection with
refinancings of any Indebtedness secured by such Liens (including all accrued
interest and any prepayment premium, if any, thereon); provided that the
Indebtedness secured is not increased nor the Lien extended to any additional
assets (other than proceeds and accessions).
7.2 DISPOSITION OF ASSETS. Neither the Company nor any Restricted
Subsidiary shall make any Dispositions except for:
(a) Excluded Dispositions;
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(b) Dispositions pursuant to the Approved Sale-Leaseback Transaction;
and
(c) Dispositions of assets having a value not exceeding $10,000,000 in
any one or series of related transactions; provided, that (i) no Event of
Default shall exist at the time thereof or shall result from such Disposition;
(ii) at least 90% of the aggregate sales price from such Disposition shall be
paid in cash; and (iii) the Net Proceeds of such Disposition shall be used for a
Covered Acquisition or used to prepay Total Indebtedness pursuant to Section
2.8(a);
provided, however, that no Disposition shall be for less than the fair market
value of the Property or equity securities being disposed of by the Company or
such Restricted Subsidiary.
7.3 CONSOLIDATIONS AND MERGERS. The Company shall not, and shall not
suffer or permit any of its Restricted Subsidiaries to, merge, consolidate with
or into, or convey, transfer, lease or otherwise dispose of (whether in one
transaction or in a series of transactions) all or substantially all of its
assets (whether now owned or hereafter acquired) to or in favor of any Person,
except:
(a) any Restricted Subsidiary of the Company may merge (i) with the
Company, provided that the Company shall be the continuing or surviving
corporation, (ii) with any one or more Restricted Subsidiaries of the Company,
(iii) with any other Person provided that such merger is effected in connection
with the Company's or a Restricted Subsidiary's Disposition of its entire
Investment in such Subsidiary pursuant to Section 7.2;
(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 a Wholly-Owned Restricted Subsidiary of the Company or in
connection with the Company's or a Restricted Subsidiary's Disposition of its
entire Investment in such Subsidiary pursuant to Section 7.2; and
(c) the Company may be party to, and may consummate, the
Recapitalization on the terms and conditions set forth in the Recapitalization
Agreements;
7.4 INVESTMENTS. The Company shall not purchase or acquire, or suffer
or permit any of its Restricted Subsidiaries to make any Investment in any
Person, including any Affiliate of the Company, except for the following
("Permitted Investments"):
(a) Investments in Cash Equivalents;
(b) extensions of credit in the nature of accounts receivable or notes
receivable arising from the sale or lease of goods or services in the ordinary
course of business;
(c) extensions of credit by the Company to any of its Restricted
Subsidiaries or by any of its Restricted Subsidiaries to another of its
Restricted Subsidiaries of the Company;
(d) any Investment made solely with assets, the payment or application
of which is not restricted by Section 7.10;
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(e) equity interests acquired by the Company or any Restricted
Subsidiary in any Person engaged in the indoor motion picture exhibition
business if (i) such Person's theatres are managed by the Company or such
Restricted Subsidiary, (ii) such equity interest is acquired solely in exchange
for services rendered in connection with the management of such Person's
theatres, and (iii) the Board of Directors of the Company determines that such
acquisition is in the best interest of the Company;
(f) Investments by Restricted Subsidiaries in the Company;
(g) Investments in the form of consideration for Property or equity
securities sold or otherwise disposed of in accordance with Section 7.2;
(h) Investments constituting Permitted Swap Obligations or payments or
advances under Swap Contracts relating to Permitted Swap Obligations;
(i) Bank accounts maintained in any commercial bank;
(j) to the extent permitted under the Senior Subordinated Note
Indentures, Investments in Cinemark International or its Subsidiaries not
exceeding $75,000,000 in the aggregate from the Closing Date provided that such
Investments shall not exceed $50,000,000 from the Closing Date in the aggregate
from the Closing Date through December 31, 1998; such Investments to be valued
at the time made;
(k) refundable construction advances made with respect to the
construction of properties of a nature or type that are used in a business
similar or related to the business of the Company or its Restricted Subsidiaries
in the ordinary course of business;
(l) advances or extensions of credit on terms customary in the industry
in the form of accounts or other receivables incurred, or pre-paid film rentals,
and loans and advances made in settlement of such accounts receivable, all in
the ordinary course of business;
(m) repurchases of Senior Subordinated Notes not exceeding $10,000,000
in the aggregate;
(n) any consolidation or merger of a Restricted Subsidiary that is a
Wholly-Owned Subsidiary of the Company into the Company or a Restricted
Subsidiary that is a Wholly-Owned Subsidiary to the extent otherwise permitted
under the Senior Subordinated Note Indentures;
(o) Investments permitted as Restricted Payments under Section 7.10;
(p) Investments in (i) Restricted Subsidiaries or (ii) 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 ; and
(q) Other Investments not exceeding $10,000,000 in the aggregate
outstanding at any time from the Closing Date.
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7.5 LIMITATION ON INDEBTEDNESS. The Company shall not, and shall not
suffer or permit any of its Restricted Subsidiaries to, create, incur, assume,
suffer to exist, or otherwise become or remain directly or indirectly liable
with respect to, any Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement;
(b) endorsements for collection or deposit in the ordinary course of
business as presently conducted; and
(c) Indebtedness existing on the Closing Date (other than the Senior
Subordinated Notes) and set forth in Schedule 7.5, or Subordinated Indebtedness
in a principal amount not exceeding such Indebtedness issued in exchange for, or
the proceeds of which are used to repay or refund or refinance or discharge or
otherwise retire for value, such Indebtedness; provided such new Indebtedness
does not have a final maturity date earlier than the Indebtedness being repaid
or refunded nor have terms any more restrictive than the Indebtedness being
repaid or refunded;
(d) the Senior Subordinated Notes and any unsecured senior or
subordinated Indebtedness, all the net proceeds of which are used, concurrently
with the incurrence thereof, to repay, refund, refinance, defease, repurchase,
redeem or otherwise acquire for value in whole or in part the Senior
Subordinated Notes (including all accrued interest and any prepayment premium,
if any, thereon), requiring no repayment or prepayment of principal prior to the
Maturity Date and having terms (other than pricing) no more materially
restrictive on the Company than the Senior Subordinated Notes;
(e) Indebtedness incurred in connection with leases permitted pursuant
to Section 7.9;
(f) Indebtedness in an aggregate principal amount not to exceed
$5,000,000 at any one time outstanding incurred in respect of letters of credit
to secure Swap Contracts (provided that the total amount of Indebtedness
incurred in respect of letters of credit to secure Swap Contracts, when added
together with any cash deposits collateralizing obligations with respect to Swap
Contracts, shall not exceed $5,000,000), or to support property, liability and
workers' compensation insurance, performance bonds (which may be in the form of
letters of credit) for construction contracts let by the Company and its
Subsidiaries in the ordinary course of business (provided that to the extent
that such performance bonds secure Indebtedness, such Indebtedness is otherwise
permitted under this Section 7.5), surety bonds and appeal bonds (which, in each
case, may be in the form of letters of credit) required in the ordinary course
of business or in connection with the enforcement of rights or claims of the
Company or any Subsidiary of the Company or in connection with judgments that do
not result in a Default or an Event of Default;
(g) Indebtedness representing Purchase Money Obligations in an
aggregate principal amount not to exceed $500,000 at any one time outstanding;
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(h) Indebtedness owing to a Restricted Subsidiary of the Company or to
the Company by a Restricted Subsidiary;
(i) Permitted Swap Obligations; and
(j) the Company may incur (but not refinance or refund) additional
unsecured subordinated Indebtedness not exceeding a cumulative aggregate
principal amount of $25,000,000, which Indebtedness has terms (other than
pricing) no more materially restrictive on the Company than this Agreement.
7.6 TRANSACTIONS WITH AFFILIATES. The Company shall not, and shall not
suffer or permit any of its Restricted Subsidiaries to, enter into any
transaction with any Affiliate of the Company or of any such Restricted
Subsidiary, except (a) as expressly permitted by this Agreement, or (b) unless
such transaction is on terms no less favorable to the Company or such Restricted
Subsidiary than would be obtained in a comparable arm's-length transaction with
a Person not an Affiliate of the Company or such Restricted Subsidiary;
provided, however, that transactions between or among the Company and its
Restricted Subsidiaries which are not otherwise prohibited by this Agreement,
transactions permitted under Section 7.10 and any employment agreement entered
into by the Company or its Subsidiaries in the ordinary course of business, in
each case shall not be deemed a transaction with an Affiliate.
7.7 USE OF PROCEEDS. The Company shall not and shall not suffer or
permit any of its Subsidiaries to use any portion of the Loan, directly or
indirectly, (a) to purchase or carry Margin Stock, (b) to repay or otherwise
refinance indebtedness of the Company or others incurred to purchase or carry
Margin Stock, (c) to extend credit for the purpose of purchasing or carrying any
Margin Stock, or (d) to acquire any security in any transaction that is subject
to Section 13 or 14 of the Exchange Act.
7.8 COMPLIANCE WITH ERISA. The Company shall not, and shall not suffer
or permit any of its Restricted Subsidiaries to, (a) terminate any Plan subject
to Title IV of ERISA so as to result in any material (in the opinion of the
Majority Banks) liability to the Company or any ERISA Affiliate, (b) permit to
exist any ERISA Event or any other event or condition, which presents the risk
of a material (in the opinion of the Majority Banks) liability to any member of
the Controlled Group, (c) make a complete or partial withdrawal (within the
meaning of ERISA Section 4201) from any Multiemployer Plan so as to result in
any material (in the opinion of the Majority Banks) liability to the Company or
any ERISA Affiliate, (d) enter into any new Plan or modify any existing Plan so
as to increase its obligations thereunder which could result in any material (in
the opinion of the Majority Banks) liability to any member of the Controlled
Group, or (e) permit the present value of all nonforfeitable accrued benefits
under any Plan (using the actuarial assumptions utilized by the PBGC upon
termination of a Plan) materially (in the opinion of the Majority Banks) to
exceed the fair market value of Plan assets allocable to such benefits, all
determined as of the most recent valuation date for each such Plan.
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7.9 LEASE OBLIGATIONS. The Company shall not, and shall not suffer or
permit any Restricted Subsidiary to, create or suffer to exist any obligations
for the payment of rent for any Property under lease or agreement to lease,
except for:
(a) leases of the Company and its Restricted Subsidiaries in existence
on the Closing Date and any renewal, extension or refinancing thereof; and
(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, including without limitation sale-leaseback transactions.
7.10 RESTRICTED PAYMENTS. The Company shall not, and shall not suffer
or permit any of its Restricted Subsidiaries to, make any Restricted Payment,
except that the Company and any Restricted Subsidiary of the Company may:
(a) declare and make dividend payments or other distributions payable
solely in its capital stock or in options, warrants or rights to acquire its
capital stock;
(b) declare and make dividends payments or other distributions from a
Wholly-Owned Subsidiary of the Company to the Company or to another Wholly-Owned
Subsidiary of the Company that is a Restricted Subsidiary;
(c) make payments of up to $1,500,000 in the aggregate annually to
repurchase capital stock of the Company held by employees of the Company upon
termination of such employment;
(d) purchase, redeem or otherwise acquire shares of its capital stock
or warrants or options to acquire any such shares with the proceeds received
from the substantially concurrent issue of new shares of its capital stock;
(e) repay but not prepay subordinated Indebtedness issued as permitted
by Section 7.5(k); provided that immediately prior to and after giving effect to
such repayment, no Default or Event of Default would exist;
(f) make Restricted Payments solely out of 50% of net income (less 100%
of net losses) of the Company and its Restricted Subsidiaries arising after
December 31, 1997 computed on a cumulative consolidated basis; provided,
however, that immediately prior to and after giving effect to such proposed
payment, no Default or Event of Default would exist;
(g) make Restricted Payments out of the net proceeds received by the
Company from:
(i) the issuance or sale (other than to a Restricted Subsidiary of
the Company) of (A) Capital Stock of the Company, including any such
shares issued upon exercise of
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any warrants, options or similar rights subsequent to the Closing Date,
or (B) Indebtedness that is convertible into Capital Stock of the
Company to the extent such Indebtedness is so converted (collectively,
the "Securities");
(ii) capital contributions, or
(iii) an amount equal to the net reduction in Investments resulting
from payments of principal of indebtedness, return of capital and other
transfers of assets or from designations of Restricted Subsidiaries as
Unrestricted Subsidiaries;
provided, however, that immediately prior to and after giving effect to such
payment, no Default or Event of Default would exist;
(h) make additional Restricted Payments in an amount not exceeding
$15,000,000 on a cumulative basis; provided, however, that immediately prior to
and after giving effect to such payment no Default or Event of Default would
exist; and
(i) make payment of any dividend within 60 calendar days after the date
of its declaration if the dividend would have been permitted on the date of
declaration.
Any payments made pursuant to Sections 7.10(a) through (e) shall not be
deemed to be Restricted Payments for the purpose of the computation of Sections
7.10(f), (g), and (h).
7.11 PREPAYMENTS OF SENIOR SUBORDINATED NOTES. Except as otherwise
permitted herein, the Company shall not, and shall not suffer or permit any of
its Restricted Subsidiaries to, prepay the Senior Subordinated Notes.
7.12 TOTAL INDEBTEDNESS TO ANNUALIZED CASH FLOW RATIO. The Company
shall not permit at any time its ratio of (a) Total Indebtedness to (b)
Annualized Cash Flow for the four fiscal quarters ending on such date to exceed
the ratio set forth opposite each fiscal quarter set forth below:
Fiscal Quarters Ending Maximum Ratio
---------------------- -------------
Closing Date through 12/31/98 6.00 to 1
3/31/99 through 6/30/99 5.75 to 1
9/30/99 through 12/31/99 5.50 to 1
3/31/00 through 6/30/00 5.25 to 1
9/30/00 through 12/31/00 5.00 to 1
3/31/01 through 6/30/01 4.75 to 1
9/30/01 through 12/31/01 4.50 to 1
3/31/02 through 6/30/02 4.25 to 1
9/30/02 and thereafter 4.00 to 1
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7.13 DEBT SERVICE COVERAGE RATIO. The Company shall not permit at the
end of any fiscal quarter its ratio of (a) Annualized Cash Flow for the four
fiscal quarters then ended plus lease expense (excluding deferred lease expense)
for the following four fiscal quarters to (b) the sum of scheduled principal
payments on Total Indebtedness for the following four fiscal quarters plus
Consolidated Cash Interest Expense (based on the principal amount of Total
Indebtedness outstanding as of the end of such fiscal quarter and interest rates
then in effect) for the following four fiscal quarters plus lease expense
(excluding deferred lease expense) for the following four fiscal quarters to be
less than (i) from the Closing Date through and including September 30, 2001,
1.25 to 1.00 and (ii) 1.10 to 1.00 thereafter.
7.14 CHANGE IN BUSINESS. The Company shall not, and shall not permit
any of its Restricted Subsidiaries to, engage in any material line of business
substantially different from those lines of business carried on by it on the
date hereof.
7.15 ACCOUNTING CHANGES. The Company shall not, and shall not suffer or
permit any of its Restricted Subsidiaries to, make any significant change in
accounting treatment or reporting practices, except as required by GAAP, or
change the fiscal year of the Company or of any of its consolidated Restricted
Subsidiaries.
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 other than immaterial amounts in the ordinary course of business.
7.17 LIMITATION ON NEGATIVE PLEDGES. The Company shall not, and shall
not permit any of its Restricted Subsidiaries to, be a party to any agreement
prohibiting, or amend any agreement to prohibit, the creation or assumption of
any Lien in favor of the Administrative Agent and the Banks upon its properties
or assets, whether now owned or hereafter acquired, except for:
(a) restrictions on collateral securing Indebtedness permitted to be
secured by Section 7.5 contained in instruments governing such Indebtedness; and
(b) subordination agreements subordinating the Company's claims against
Cinemark International. to those of the administrative agent and the banks under
the Cinemark International Credit Agreement.
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SECTION 8
EVENTS OF DEFAULT
8.1 EVENT OF DEFAULT. Any of the following shall constitute an "Event
of Default":
(a) NON-PAYMENT. The Company fails to pay, when and as required to be
paid herein, any principal of any Loan, or shall fail to pay within two Business
Days of the due date hereof any interest, fees or other amount payable hereunder
or pursuant to any other Loan Document; or
(b) REPRESENTATION OR WARRANTY. Any representation or warranty by the
Company made or deemed made herein, in any Loan Document, or which is contained
in any certificate, document or financial or other statement by the Company or
its Responsible Officers, furnished at any time under this Agreement, or in or
under any Loan Document, shall prove to have been incorrect in any material
respect on or as of the date made or deemed made; or
(c) SPECIFIC DEFAULTS. The Company fails to perform or observe any
term, covenant or agreement contained in Sections 7.3, 7.12, 7.13 or 7.17; or
(d) OTHER DEFAULTS. The Company fails to perform or observe any other
term or covenant contained in Section 6.1, 6.2, 6.3, 6.9, 7.1, 7.2, 7.4 through
7.11, inclusive, 7.14, 7.15 or 7.16 and such default shall continue unremedied
for a period of three days, or the Company fails to perform or observe any other
term or covenant contained in this Agreement or any Loan Document, and such
default under other terms or covenants shall continue unremedied for a period of
20 days after the earlier of (i) the date upon which a Responsible Officer of
the Company knew or should have known of such failure or (ii) the date upon
which written notice thereof is given to the Company by the Administrative Agent
or any Bank; or
(e) CROSS-DEFAULTS. (i) The Company or any of its Restricted
Subsidiaries (A) fails to make any payment in respect of any Indebtedness (other
than the Senior Subordinated Note Indentures or in respect of Swap Contracts)
having an aggregate principal amount (including undrawn committed or available
amounts and including amounts owing to all creditors under any combined or
syndicated credit arrangement) of $1,000,000 or more when due (whether by
scheduled maturity, required prepayment, acceleration, demand, or otherwise) and
such failure continues after the applicable grace or notice period, if any,
specified in the document relating thereto on the date of such failure; or (B)
fails to perform or observe any other condition or covenant, or any other event
shall occur or condition exist, under any agreement or instrument relating to
any such Indebtedness having an aggregate principal amount of $1,000,000 or more
(other than the Senior Subordinated Note Indentures), and such failure continues
after the applicable grace or notice period, if any, specified in the document
relating thereto on the date of such failure if the effect of such failure,
event or condition is to cause, or to permit the holder or holders of such
Indebtedness or beneficiary or beneficiaries of such Indebtedness (or a trustee
or agent on behalf of such holder or holders or beneficiary or beneficiaries) to
cause such Indebtedness to be declared to be due and payable prior to its stated
maturity, or any Contingent Obligation in an amount of $1,000,000 or more to
become payable or cash collateral in respect thereof to be demanded; or (ii)
there occurs under any Swap Contract an Early Termination Date (as defined in
such Swap Contract) resulting from (A) any event of default under such Swap
Contract as to which the Company or any Restricted Subsidiary is the
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Defaulting Party (as defined in such Swap Contract) or (B) any Termination Event
(as so defined) as to which the Company or any Subsidiary is an Affected Party
(as so defined), and, in either event, the Swap Termination Value owed by the
Company or such Subsidiary as a result thereof is greater than $1,000,000; or
(f) CROSS-DEFAULT TO SENIOR SUBORDINATED NOTE INDENTURES. The
occurrence and continuance of any Event of Default under, and as defined in, the
Senior Subordinated Note Indentures; or
(g) INSOLVENCY; VOLUNTARY PROCEEDINGS. The Company or any of its
Material Restricted Subsidiaries (i) ceases or fails to be Solvent, or generally
fails to pay, or admits in writing its inability to pay, its debts as they
become due, subject to applicable grace periods, if any, whether at stated
maturity or otherwise; (ii) commences any Insolvency Proceeding with respect to
itself; or (iii) takes any action to effectuate or authorize any of the
foregoing; or
(h) INVOLUNTARY PROCEEDINGS. (i) Any involuntary Insolvency Proceeding
is commenced or filed against the Company or any Material Restricted Subsidiary
of the Company, or any writ, judgment, warrant of attachment, execution or
similar process, is issued or levied against a substantial part of the Company's
or any of its Material Restricted Subsidiaries' Properties, and any such
proceeding or petition shall not be dismissed, or such writ, judgment, warrant
of attachment, execution or similar process shall not be released, vacated or
fully bonded within 60 days after commencement, filing or levy; (ii) the Company
or any of its Material Restricted Subsidiaries admits the material allegations
of a petition against it in any Insolvency Proceeding, or an order for relief
(or similar order under non-U.S. law) is ordered in any Insolvency Proceeding;
or (iii) the Company or any of its Material Restricted Subsidiaries acquiesces
in the appointment of a receiver, trustee, custodian, conservator, liquidator,
mortgagee in possession (or agent therefor), or other similar Person for itself
or a substantial portion of its Property or business;
(i) ERISA. (i) A member of the Controlled Group shall fail to pay when
due, after the expiration of any applicable grace period, any installment
payment with respect to its withdrawal liability under a Multiemployer Plan;
(ii) the Company or an ERISA Affiliate shall fail to satisfy its contribution
requirements under Section 412(c)(11) of the Code, whether or not it has sought
a waiver under Section 412(d) of the Code; (iii) in the case of an ERISA Event
involving the withdrawal from a Plan of a "substantial employer" (as defined in
Section 4001(a)(2) or Section 4062(e) of ERISA), the withdrawing employer's
proportionate share of that Plan's Unfunded Pension Liabilities is more than
$1,000,000; (iv) in the case of an ERISA Event involving the complete or partial
withdrawal from a Multiemployer Plan, the withdrawing employer has incurred a
withdrawal liability in an aggregate amount exceeding $1,000,000; (v) in the
case of an ERISA Event not described in clause (iii) or (iv), the Unfunded
Pension Liabilities of the relevant Plan or Plans exceed $1,000,000; (vi) a Plan
that is intended to be qualified under Section 401(a) of the Code shall lose its
qualification, and the loss can reasonably be expected to impose on members of
the Controlled Group liability (for additional taxes, to Plan participants, or
otherwise) in the aggregate amount of $1,000,000 or more; (vii) the commencement
or increase of contributions to, or the adoption of or the amendment of a Plan
by, a member of the Controlled Group shall result in a net increase in
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unfunded liabilities to the Controlled Group in excess of $1,000,000; (viii) any
member of the Controlled Group engages in or otherwise becomes liable for a
non-exempt prohibited transaction and the initial tax or additional tax under
section 4975 of the Code relating thereto might reasonably be expected to exceed
$1,000,000; (ix) a violation of Section 404 or 405 of ERISA or the exclusive
benefit rule under Section 401(a) of the Code if such violation might reasonably
be expected to expose a member or members of the Controlled Group to monetary
liability in excess of $1,000,000; (x) any member of the Controlled Group is
assessed a tax under Section 4980B of the Code in excess of $1,000,000; or (xi)
the occurrence of any combination of events listed in clauses (iii) through (x)
that involves a potential liability, net increase in aggregate Unfunded Pension
Liabilities, unfunded liabilities, or any combination thereof, in excess of
$1,000,000.
(j) MONETARY JUDGMENTS. One or more final (non-interlocutory)
judgments, orders or decrees shall be entered against the Company or any of its
Material Restricted Subsidiaries involving in the aggregate a liability (to the
extent not covered by insurance, including insurance through a related captive
insurance company, but excluding self-insurance) as to any single or related
series of transactions, incidents or conditions, of $250,000 or more, and the
same shall remain unsatisfied, unvacated and unstayed pending appeal for a
period of 30 days after the entry thereof; or
(k) NON-MONETARY JUDGMENTS. Any non-monetary judgment, order or decree
shall be rendered against the Company or any of its Material Restricted
Subsidiaries which does or could reasonably be expected to have a Material
Adverse Effect, and there shall be any period of 10 consecutive days during
which a stay of enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect; or
(l) COLLATERAL. Any material provision of any Collateral Document shall
for any reason cease to be valid and binding on or enforceable against any
Pledgor or any Pledgor shall so state in writing or bring an action to limit its
obligations or liabilities thereunder; or any Collateral Document shall for any
reason (other than pursuant to the terms thereof) cease to create a valid
security interest in the Collateral purported to be covered thereby or such
security interest shall for any reason cease to be a perfected and first
priority security interest, and if, in either case, such cessation is the result
of a change in law, such cessation shall continue for 10 days after the earlier
of (i) the date upon which a Responsible Officer of the Company knew or should
have known of such cessation or (ii) the date upon which written notice thereof
is given to the Company by the Administrative Agent or any Bank; or
(m) LOAN DOCUMENTS. The Loan Agreement, Notes, Guaranty or Pledge
Agreement at any time after its execution and delivery and for any reason other
than the agreement of the Banks or satisfaction in full of all the Obligations,
ceases to be in full force and effect or is declared by a court of competent
jurisdiction to be null and void, invalid or unenforceable in any respect which,
in any such event in the reasonable opinion of the Banks, is materially adverse
to the interests of the Banks; or the Company or any Guarantor denies that it
has any or further liability or obligation under any Loan Document, or purports
to revoke, terminate or rescind same; or any Event of Default (as such term is
or may hereafter be specifically defined in any other Loan Document) occurs
under any other Loan Document; or
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(n) ADVERSE CHANGE. There shall occur a Material Adverse Effect; or
(o) CHANGE OF CONTROL.
(i) Prior to the Recapitalization Date: (A) a Change in Control
Event or (B) the failure of the Xxxxxxxx Family (1) to own at least 50%
of all issued and outstanding Voting Stock of the Company, and such
default shall continue unremedied for a period of 30 days, (2) to own a
majority of all issued and outstanding Capital Stock of the Company at
all times, or (3) to have designated a majority of the Board of
Directors of the Company, or
(ii) from and after the Recapitalization Date: (A) a Change in
Control Event (excluding the Recapitalization as a Change in Control
Event itself), (B) the failure of the Xxxxxxxx Family (1) to own at
least 50% of all Voting Stock of Cinemark Theatres Holdings, and such
default shall continue unremedied for a period of 30 days, (2) to own a
majority of all Capital Stock of Cinemark Theatres Holdings at all
times, or (3) to have designated a majority of the Board of Directors
of Cinemark Theatres Holdings or (C) the failure of Cinemark Theatres
Holdings to beneficially own all the outstanding Capital Stock of the
Company.
8.2 REMEDIES. If any Event of Default occurs and is continuing, the
Administrative Agent shall, at the request of, or may, with the consent of, the
Majority Banks, (a) declare the Commitment of each Bank to make Loans to be
terminated, whereupon such Commitments and obligations shall forthwith be
terminated; (b) declare the unpaid principal amount of all outstanding Loans,
all interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable;
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Company; and (c) exercise on behalf of itself
and the Banks all rights and remedies available to it and the Banks under the
Loan Documents or applicable law; provided, however, that upon the occurrence of
any event specified in paragraph (g) or (h) of Section 8.1 above (in the case of
clause (i) of paragraph (h) upon the expiration of the 60-day period mentioned
therein), the obligation of each Bank to make Loans shall automatically
terminate and the unpaid principal amount of all outstanding Loans and all
interest and other amounts as aforesaid shall automatically become due and
payable without further act of the Administrative Agent or any Bank.
8.3 RIGHTS NOT EXCLUSIVE. The rights provided for in this Agreement and
the other Loan Documents are cumulative and are not exclusive of any other
rights, powers, privileges or remedies provided by law or in equity, or under
any other instrument, document or agreement now existing or hereafter arising.
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SECTION 9
THE AGENTS
9.1 APPOINTMENT AND AUTHORIZATION. Each Bank hereby irrevocably
appoints, designates and authorizes the Administrative Agent to take such action
on its behalf under the provisions of this Agreement and each other Loan
Document and to exercise such powers and perform such duties as are expressly
delegated to it by the terms of this Agreement or any other Loan Document,
together with such powers as are reasonably incidental thereto. Notwithstanding
any provision to the contrary contained elsewhere in this Agreement or in any
other Loan Document, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, nor shall the
Administrative Agent have or be deemed to have any fiduciary relationship with
any Bank, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against the Administrative Agent. Without limiting
the generality of the foregoing sentence, the use of the term "agent" in this
Agreement with reference to the Administrative Agent is not intended to connote
any fiduciary or other implied (or express) obligations arising under agency
doctrine of any applicable law. Instead, such term is used merely as a matter of
market custom, and is intended to create or reflect only an administrative
relationship between independent contracting parties.
9.2 DELEGATION OF DUTIES. The Administrative Agent may execute any of
its duties under this Agreement or any other Loan Document by or through agents,
employees or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects with reasonable care.
9.3 LIABILITY OF AGENTS. None of the Agent-Related Persons shall (a) be
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document (except for its own
gross negligence or willful misconduct), or (b) be responsible in any manner to
any of the Banks for any recital, statement, representation or warranty made by
the Company or any Subsidiary or Affiliate of the Company, or any officer
thereof, contained in this Agreement or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Administrative Agent under or in connection with, this
Agreement or any other Loan Document, or for the value of any Collateral or the
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document, or for any failure of the Company or any
other party to any Loan Document to perform its obligations hereunder or
thereunder. No Agent-Related Person shall be under any obligation to any Bank to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the Properties, books or records of the Company or any
of the Company's Subsidiaries or Affiliates.
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9.4 RELIANCE BY ADMINISTRATIVE AGENT.
(a) The Administrative Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to the
Company), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of the
Majority Banks as it deems appropriate and, if it so requests, it shall first be
indemnified to its satisfaction by the Banks against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take
any such action. The Administrative Agent shall in all cases be fully protected
in acting, or in refraining from acting, under this Agreement or any other Loan
Document in accordance with a request or consent of the Majority Banks and such
request and any action taken or failure to act pursuant thereto shall be binding
upon all of the Banks.
(b) For purposes of determining compliance with the conditions
specified in Sections 4.1 and 4.2, each Bank that has executed this Agreement
shall be deemed to have consented to, approved or accepted or to be satisfied
with each document or other matter either sent by the Administrative Agent to
such Bank for consent, approval, acceptance or satisfaction, or required
thereunder to be consented to or approved by or acceptable or satisfactory to
the Bank, unless an officer of the Administrative Agent responsible for the
transactions contemplated by the Loan Documents shall have received notice from
the Bank prior to the initial Borrowing specifying its objection thereto and
either such objection shall not have been withdrawn by notice to the
Administrative Agent to that effect or the Bank shall not have made available to
the Administrative Agent the Bank's ratable portion of such Borrowing.
9.5 NOTICE OF DEFAULT. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default,
except with respect to defaults in the payment of principal, interest and fees
required to be paid to the Administrative Agent for the account of the Banks,
unless the Administrative Agent shall have received written notice from a Bank
or the Company referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event that
the Administrative Agent receives such a notice, the Administrative Agent shall
give notice thereof to the Banks. The Administrative Agent shall take such
action with respect to such Default or Event of Default as shall be requested by
the Majority Banks in accordance with Section 8; provided, however, that unless
and until the Administrative Agent shall have received any such request, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable or in the best interest of the Banks.
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9.6 CREDIT DECISION. Each Bank expressly acknowledges that none of
the Agent-Related Persons has made any representation or warranty to it and
that no act by the Administrative Agent hereinafter taken, including any review
of the affairs of the Company and its Subsidiaries shall be deemed to
constitute any representation or warranty by the Administrative Agent to any
Bank. Each Bank represents to the Administrative Agent that it has,
independently and without reliance upon the Administrative Agent and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of the Company and
its Subsidiaries, and all applicable bank regulatory laws relating to the
transactions contemplated thereby, and made its own decision to enter into this
Agreement and extend credit to the Company hereunder. Each Bank also
represents that it will, independently and without reliance upon the
Administrative Agent and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement
and the other Loan Documents, and to make such investigations as it deems
necessary to inform itself as to the business, prospects, operations, property,
financial and other condition and creditworthiness of the Company. Except for
notices, reports and other documents expressly herein required to be furnished
to the Banks by the Administrative Agent, the Administrative Agent shall not
have any duty or responsibility to provide any Bank with any credit or other
information concerning the business, prospects, operations, property, financial
and other condition or creditworthiness of the Company which may come into the
possession of any of the Agent-Related Persons.
9.7 INDEMNIFICATION. Whether or not the transactions contemplated
hereby shall be consummated, the Banks shall indemnify upon demand the
Agent-Related Persons (to the extent not reimbursed by or on behalf of the
Company and without limiting the obligation of the Company to do so), ratably
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses and disbursements of any
kind whatsoever which may at any time (including at any time following the
repayment of the Loans and the termination or resignation of the related
Administrative Agent) be imposed on, incurred by or asserted against any such
Person any way relating to or arising out of this Agreement or any document
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by any such
Person under or in connection with any of the foregoing; provided, however,
that no Bank shall be liable for the payment to the Agent-Related Persons of
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting solely
from such Person's gross negligence or willful misconduct. Without limitation
of the foregoing, each Bank shall reimburse the Administrative Agent upon
demand for its ratable share of any costs or out-of-pocket expenses (including
fees and expenses of counsel and the allocated cost of in-house counsel)
incurred by the Administrative Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of rights or responsibilities under, this Agreement, any
other Loan Document, or any document contemplated by or referred to herein to
the extent that the Administrative Agent is not reimbursed for such expenses by
or on behalf of the Company. Without limiting the generality of the foregoing,
if the Internal Revenue Service or any other Governmental Authority of the
United States or other jurisdiction asserts a claim that the Administrative
Agent did not properly withhold tax from amounts paid to or for the account of
any Bank (because the appropriate form was not delivered, was not properly
executed, or because such Bank failed to notify the Administrative Agent of a
change in circumstances which rendered the exemption from, or reduction of,
withholding tax ineffective, or for any other reason) such Bank shall indemnify
the Administrative Agent fully for all amounts paid, directly or indirectly, by
the Administrative Agent as tax or otherwise, including penalties and interest,
and including any taxes imposed by any jurisdiction on the amounts payable to
the Administrative Agent under this Section, together with all costs and
expenses (including fees and expenses of counsel and the allocated cost of
in-house counsel). The obligation of the Banks in this Section shall survive
the payment of all Obligations hereunder.
9.8 ADMINISTRATIVE AGENT IN INDIVIDUAL CAPACITY. BofA and its
Affiliates may make loans to, issue letters of credit for the account of,
accept deposits from, acquire equity interests in and generally engage in any
kind of banking, trust, financial advisory or other business with the Company
and its Subsidiaries and Affiliates as though BofA were not the Administrative
Agent hereunder and without notice to or consent of the Banks. With respect to
its Loans, BofA shall have the same rights and powers under this Agreement as
any other Bank and may exercise the same as though it were not the
Administrative Agent, and the terms "Bank" and "Banks" shall include BofA in
its individual capacity.
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9.9 SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may,
and at the request of the Majority Banks shall, resign as Administrative Agent
upon 30 days' notice to the Banks. If the Administrative Agent shall resign as
Administrative Agent under this Agreement, the Majority Banks shall appoint
from among the Banks a successor agent for the Banks which successor agent
shall be approved by the Company. If no successor agent is appointed prior to
the effective date of the resignation of the Administrative Agent, the
Administrative Agent may appoint, after consulting with the Banks and the
Company, a successor agent from among the Banks. Upon the acceptance of its
appointment as successor agent hereunder, such successor agent shall succeed to
all the rights, powers and duties of the retiring Administrative Agent and the
term "Administrative Agent" shall mean such successor agent and the retiring
Administrative Agent's appointment, powers and duties as Administrative Agent
shall be terminated. After any retiring Administrative Agent's resignation
hereunder as Administrative Agent, the provisions of this Section 9 and
Sections 10.4 and 10.5 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Administrative Agent under this
Agreement. If no successor agent has accepted appointment as Administrative
Agent by the date which is 30 days following a retiring Administrative Agent's
notice of resignation, the retiring Administrative Agent's resignation shall
nevertheless thereupon become effective and the Banks shall perform all of the
duties of the Administrative Agent hereunder until such time, if any, as the
Majority Banks appoint a successor agent as provided for above.
9.10 COLLATERAL MATTERS.
(a) The Administrative Agent is authorized on behalf of all the
Banks, without the necessity of any notice to or further consent from the
Banks, from time to time to take any action with respect to any Collateral or
the Pledge Agreements which may be necessary to perfect and maintain perfected
the security interest in and Liens upon the Collateral granted pursuant to the
Pledge Agreements. In connection with the Recapitalization, the Administrative
Agent is authorized to release the stock collateral held under the Xxxxxxxx
Family Pledge Agreement to the extent necessary, against delivery of the stock
of the Company owned by Cinemark Theatres Holdings.
(b) The Banks irrevocably authorize the Administrative Agent, at
its option and in its discretion, to release any Lien granted to or held by the
Administrative Agent upon any Collateral (i) upon termination of the
Commitments and payment in full of all Loans and all other Obligations payable
under this Agreement and under any other Loan Document; (ii) constituting
Property sold or to be sold or disposed of as part of or in connection with any
Disposition permitted hereunder; (iii) constituting Property in which the
Company or any Subsidiary of the Company owned no interest at the time the Lien
was granted or at any time thereafter; (iv) constituting Property leased to the
Company or any Subsidiary of the Company under a lease which has expired or
been terminated in a transaction permitted under this Agreement or is about to
expire and which has not been, and is not intended by the Company or such
Subsidiary to be, renewed or extended; (v) consisting of an instrument
evidencing Indebtedness or other debt instrument, if the indebtedness evidenced
thereby has been paid in full; or (vi) if approved, authorized or ratified in
writing by the Majority Banks or all the Banks, as the case may be, subject to
Section 10.1(f). Upon request by the Administrative Agent at any time, the
Banks will confirm in writing the Administrative Agent's authority to release
particular types or items of Collateral pursuant to this Section 9.10(b).
(c) Each Bank agrees with and in favor of each other (which
agreement shall not be for the benefit of the Company or any of its
Subsidiaries) that the Company's obligation to such Bank under this Agreement
and the other Loan Documents is not and shall not be secured by any real
property collateral now or hereafter acquired by such Bank.
9.11 SYNDICATION AGENT, CO-AGENTS. The Banks identified on the
facing page or signature pages
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of this Agreement as the "Syndication Agent" and the "Co-Agents" shall not have
any right, power, obligation, liability, responsibility or duty under this
Agreement other than those applicable to all Banks as such. Without limiting
the foregoing, the Syndication Agent and the Co-Agents shall not have or be
deemed to have any fiduciary relationship with any Bank. Each Bank
acknowledges that it has not relied, and will not rely, on the Syndication
Agent or any Co-Agent in deciding to enter into this Agreement or in taking or
not taking action hereunder.
SECTION 10
MISCELLANEOUS
10.1 AMENDMENTS AND WAIVERS. No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent with respect to any
departure by the Company therefrom, shall be effective unless the same shall be
in writing and signed by the Majority Banks, the Company and acknowledged by
the Administrative Agent, and then such waiver shall be effective only in the
specific instance and for the specific purpose for which given; provided,
however, that no such waiver, amendment, or consent shall, unless in writing
and signed by all the Banks, the Company and acknowledged by the Administrative
Agent, do any of the following: (a) increase or extend the Commitment of any
Bank (or reinstate any Commitment terminated pursuant to Section 8.2(a)) or
subject any Bank to any additional obligations hereunder or under any Loan
Document; (b) postpone or delay any date fixed for any payment of principal,
interest, fees or other amounts due to the Banks (or any of them) hereunder or
under any Loan Document (other than Swap Contracts); (c) reduce the principal
of, or the rate of interest specified herein on any Loan, or of any fees or
other amounts payable hereunder or under any Loan Document; (d) change the
percentage of the Commitments or of the aggregate unpaid principal amount of
the Loans which shall be required for the Banks or any of them to take any
action hereunder or under any Loan Document; (e) amend this Section 10.1 or
Section 2.15; or (f) discharge any Guarantor or Pledgor, or release any part of
the Collateral except as permitted by Section 6.12; provided further, that no
amendment, waiver or consent shall, unless in writing and signed by the
Administrative Agent in addition to the Majority Banks or all the Banks, as the
case may be, affect the rights or duties of the Administrative Agent under this
Agreement or any other Loan Document.
10.2 NOTICES. All notices, requests and other communications
provided for hereunder shall be in writing (including telegraphic, telex,
facsimile transmission or cable communication) and mailed, telegraphed,
telexed, transmitted or delivered, if to the Company to its address specified
on Schedule 10.2 hereto; if to any Bank, to its Domestic Lending Office
specified on Schedule 10.2 hereto; and if to the Administrative Agent, to its
address specified on Schedule 10.2 hereto; or, as to the Company or the
Administrative Agent, to such other address as shall be designated by such
party in a written notice to the other parties, and as to each other party at
such other address as shall be designated by such party in a written notice to
the Company and the Administrative Agent. All such notices and communications
shall be effective when delivered for overnight delivery, delivered to the
telegraph company, transmitted by telecopier and confirmed by telephone,
transmitted by telex and confirmed by telex answerback or delivered to the
cable company, as applicable, or if delivered, upon delivery, except that
written notices pursuant to Section 2 shall not be effective until received by
the Administrative Agent.
10.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no
delay in exercising, on the part of the Administrative Agent or any Bank, any
right, remedy, power or privilege hereunder, shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege.
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10.4 COSTS AND EXPENSES. The Company shall, whether or not the
transactions contemplated hereby shall be consummated:
(a) reimburse BofA (including in its capacity as Administrative
Agent) on demand for all reasonable costs and expenses incurred in connection
with the development, syndication, preparation, delivery, administration and
execution of, and any amendment, supplement, waiver or modification to, this
Agreement, any Loan Document and any other documents prepared in connection
herewith or therewith, and the consummation of the transactions contemplated
hereby and thereby, including the reasonable costs and expenses of counsel to
BofA (including in its capacity as Administrative Agent) (and the allocated
cost of internal counsel) with respect thereto;
(b) reimburse each Bank and the Administrative Agent on demand for
all reasonable costs and expenses incurred by them in connection with the
enforcement or preservation of any rights (including in connection with any
"workout" or restructuring regarding the Loans) under this Agreement, any Loan
Document, and any such other documents, including fees and out-of-pocket
expenses of counsel (and the allocated cost of internal counsel) to the
Administrative Agent and to each of the Banks; and
(c) reimburse the Administrative Agent on demand for all
reasonable appraisal, audit, search and filing fees, incurred or sustained by
the Administrative Agent in connection with the matters referred to under
paragraphs (a) and (b) above.
10.5 GENERAL INDEMNITY. The Company shall pay, indemnify, and hold
each Bank, the Administrative Agent and each of their respective officers,
directors, employees, counsel, agents and attorneys-in-fact (each, an
"Indemnified Person") harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
charges, expenses or disbursements (including reasonable fees and out-of-pocket
expenses of counsel and the allocated cost of internal counsel) of any kind or
nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement and any other Loan Documents,
or the transactions contemplated hereby and thereby, and with respect to any
investigation, litigation or proceeding (including any Insolvency Proceeding or
appellate proceeding) related to this Agreement or the Loans, or the use of the
proceeds thereof, whether or not any Indemnified Person is a party thereto (all
the foregoing, collectively, the "Indemnified Liabilities"); provided, that the
Company shall have no obligation hereunder to any Indemnified Person with
respect to Indemnified Liabilities (i) arising from the gross negligence or
willful misconduct of such Indemnified Person (ii) with respect to judicial
proceedings commenced against such Indemnified Person by any holder of the debt
or equity securities of such Indemnified Person based solely on the rights
afforded such holder in its capacity as such, and (iii) with respect to
judicial proceedings commenced solely against such Indemnified Person by
another Bank, Assignee or Participant to the extent based on a cause of action
against such Indemnified Person and not the Company or any Restricted
Subsidiary. The obligations in this Section 10.5 shall survive payment of all
other Obligations. The Company shall have the right to undertake, conduct and
control through counsel of its own choosing (which counsel shall be acceptable
to the Indemnified Persons acting reasonably) and at the sole expense of the
Company, the conduct and settlement of any Indemnified Liabilities, and the
Indemnified Person shall cooperate with the Company in connection therewith;
provided that the Company shall permit the Indemnified Person to participate in
such conduct and settlement through counsel chosen by the Indemnified Person,
but the fees and expenses of such counsel shall be borne by the Indemnified
Person. Notwithstanding the foregoing, the Indemnified Person shall have the
right to employ its own counsel, and the reasonable fees and expenses of such
counsel shall be at the Company's costs and expense if the interests of the
Company and the Indemnified Person become adverse in any such claim or course
of action; provided, however, the Company, in such event, shall only be liable
for the reasonable legal expenses of one counsel for all of such Indemnified
Persons. The Company shall not be liable for any settlement of any claim or
action effected without its prior written consent, such consent not to be
unreasonably withheld. All amounts owing under this Section 10.5 shall be paid
within 30 days after demand.
10.6 MARSHALLING; PAYMENTS SET ASIDE. Neither the Administrative
Agent nor the Banks shall be under any obligation to xxxxxxxx any assets in
favor of the Company or any other Person or against or in
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payment of any or all of the Obligations. To the extent that the Company makes
a payment or payments to the Administrative Agent or the Banks, or the
Administrative Agent or the Banks enforce their Liens or exercise their rights
of set-off, and such payment or payments or the proceeds of such enforcement or
set-off or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid to a trustee,
receiver or any other party in connection with any Insolvency Proceeding, or
otherwise, then to the extent of such recovery the obligation or part thereof
originally intended to be satisfied shall be revived and continued in full
force and effect as if such payment had not been made or such enforcement or
set-off had not occurred.
10.7 SUCCESSORS AND ASSIGNS. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that the Company may not assign or
transfer any of its rights or obligations under this Agreement without the
prior written consent of the Administrative Agent and each Bank.
10.8 ASSIGNMENTS, PARTICIPATIONS, ETC.
(a) Any Bank may, with the prior written consent of the Company at
all times other than during the existence of an Event of Default, and the
Administrative Agent, which consents shall not be unreasonably withheld, at any
time assign and delegate to one or more Eligible Assignees (provided that no
written consent of the Company or the Administrative Agent shall be required in
connection with any assignment and delegation by a Bank to a Bank Affiliate of
such Bank) (each an "Assignee") all, or any ratable part of all, of the Loans,
the Commitments and the other rights and obligations of such Bank hereunder, in
a minimum amount of $10,000,000 and multiples of $1,000,000 in excess thereof;
provided, however, that (i) the Company and the Administrative Agent may
continue to deal solely and directly with such Bank in connection with the
interest so assigned to an Assignee until (A) written notice of such
assignment, together with payment instructions, addresses and related
information with respect to the Assignee, shall have been given to the Company
and the Administrative Agent by such Bank and the Assignee; (B) such Bank and
its Assignee shall have delivered to the Company and the Administrative Agent a
Notice of Assignment and Acceptance in the form of Exhibit D ("Notice of
Assignment and Acceptance") together with any Note or Notes subject to such
assignment and (C) the assignor Bank or Assignee has paid to the Administrative
Agent a processing fee in the amount of $2,500.
(b) From and after the date that the Administrative Agent notifies
the assignor Bank that it has received an executed Notice of Assignment and
Acceptance and payment of the above-referenced processing fee, (i) the Assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Notice of
Assignment and Acceptance, shall have the rights and obligations of a Bank
under the Loan Documents, and (ii) the assignor Bank shall, to the extent that
rights and obligations hereunder and under the other Loan Documents have been
assigned by it pursuant to such Notice of Assignment and Acceptance, relinquish
its rights and be released from its obligations under the Loan Documents.
-74-
75
(c) Within five Business Days after its receipt of notice by the
Administrative Agent that it has received an executed Notice of Assignment and
Acceptance and payment of the processing fee, the Company shall, upon the
request of the Assignee made through the Administrative Agent, execute and
deliver to the Administrative Agent, one or more new Notes evidencing such
Assignee's assigned Loans and Commitment and, if the assignor Bank had
previously requested one or more Notes and has retained a portion of its Loans
and its Commitment, replacement Notes in the principal amount of the Loans
retained by the assignor Bank (such Notes to be in exchange for, but not in
payment of, the Notes held by such Bank). Immediately upon each Assignee's
making its processing fee payment under the Notice of Assignment and
Acceptance, this Agreement, shall be deemed to be amended to the extent, but
only to the extent, necessary to reflect the addition of the Assignee and the
resulting adjustment of the Commitments arising therefrom. The Commitment
allocated to each Assignee shall reduce such Commitments of the assigning Bank
pro tanto.
(d) Any Bank may at any time sell to one or more commercial banks
or other Persons not Affiliates of the Company (a "Participant") participating
interests in any Loans, the Commitment of that Bank and the other interests of
that Bank (the "originating Bank") hereunder and under the other Loan
Documents; provided, however, that (i) the originating Bank's obligations under
this Agreement shall remain unchanged, (ii) the originating Bank shall remain
solely responsible for the performance of such obligations, (iii) the Company
and the Administrative Agent shall continue to deal solely and directly with
the originating Bank in connection with the originating Bank's rights and
obligations under this Agreement and the other Loan Documents, and (iv) no Bank
shall transfer or grant any participating interest under which the Participant
shall have rights to approve any amendment to, or any consent or waiver with
respect to, this Agreement or any other Loan Document, except to the extent
such amendment, consent or waiver would require unanimous consent of the Banks
as described in the first proviso to Section 10.1. In the case of any such
participation, the Participant shall be entitled to the benefit of Sections
3.1, 3.3 and 10.5 as though it were also a Bank hereunder, and if amounts
outstanding under this Agreement are due and unpaid, or shall have been
declared or shall have become due and payable upon the occurrence of an Event
of Default, each Participant shall be deemed to have the right of set-off in
respect of its participating interest in amounts owing under this Agreement to
the same extent as if the amount of its participating interest were owing
directly to it as a Bank under this Agreement.
(e) Notwithstanding any other provision contained in this
Agreement or any other Loan Document to the contrary, any Bank may assign all
or any portion of the Loans or Notes held by it to any Federal Reserve Bank or
the United States Treasury as collateral security pursuant to Regulation A of
the Board of Governors of the Federal Reserve System and any Operating Circular
issued by such Federal Reserve Bank, provided that any payment in respect of
such assigned Loans or Notes made by the Company to or for the account of the
assigning or pledging Bank in accordance with the terms of this Agreement shall
satisfy the Company's obligations hereunder in respect to such assigned Loans
or Notes to the extent of such payment. No such assignment shall release the
assigning Bank from its obligations hereunder.
10.9 SET-OFF. In addition to any rights and remedies of the Banks
provided by law, if an Event of Default exists, each Bank is authorized at any
time and from time to time, without prior notice to the Company, any such
notice being waived by the Company to the fullest extent permitted by law, to
set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held by, and other indebtedness at any time
owing to, such Bank to or for the credit or the account of the Company against
any and all Obligations owing to such Bank, now or hereafter existing,
irrespective of whether or not the Administrative Agent or such Bank shall have
made demand under this Agreement or any Loan Document and although such
Obligations may be contingent or unmatured. Each Bank agrees promptly to
notify the Company and the Administrative Agent after any such set-off and
application made by such Bank; provided, however, that the failure to give such
notice shall not affect the validity of such set-off and application. The
rights of each Bank under this Section 10.9 are in addition to the other rights
and remedies (including other rights of set-off) which the Bank may have.
10.10 NOTIFICATION OF ADDRESSES, LENDING OFFICES, ETC. Each Bank
shall notify the Administrative Agent in writing of any changes in the address
to which notices to the Bank should be directed, of addresses of its Lending
Offices, of payment instructions in respect of all payments to be made to it
hereunder and of such other administrative information as the Administrative
Agent shall reasonably request.
10.11 COUNTERPARTS. This Agreement may be executed by one or more
of the parties to this Agreement in any number of separate counterparts, each
of which, when so executed, shall be deemed an original, and all of said
counterparts taken together shall be deemed to constitute but one and the same
instrument. A set of the copies of this Agreement signed by all the parties
shall be lodged with the Company and the Administrative Agent.
10.12 SEVERABILITY. The illegality or unenforceability of any
provision of this Agreement or any instrument or agreement required hereunder
shall not in any way affect or impair the legality or enforceability of the
remaining provisions of this Agreement or any instrument or agreement required
hereunder.
-75-
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10.13 NO THIRD PARTIES BENEFITED. This Agreement is made and
entered into for the sole protection and legal benefit of the Company, the
Banks and the Administrative Agent, and their permitted successors and assigns,
and no other Person shall be a direct or indirect legal beneficiary of, or have
any direct or indirect cause of action or claim in connection with, this
Agreement or any of the other Loan Documents. Neither the Administrative Agent
nor any Bank shall have any obligation to any Person not a party to this
Agreement or other Loan Documents.
10.14 TIME. Time is of the essence as to each term or provision of
this Agreement and each of the other Loan Documents.
10.15 GOVERNING LAW AND JURISDICTION.
(a) THIS AGREEMENT AND ANY NOTES SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK; PROVIDED THAT
THE ADMINISTRATIVE AGENT AND THE BANKS SHALL RETAIN ALL RIGHTS ARISING UNDER
FEDERAL LAW.
(B) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
AND ANY OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW
YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE COMPANY, THE
ADMINISTRATIVE AGENT AND THE BANKS CONSENTS, FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE
COMPANY, THE ADMINISTRATIVE AGENT AND THE BANKS IRREVOCABLY WAIVES ANY
OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS
AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE COMPANY, THE ADMINISTRATIVE
AGENT AND THE BANKS EACH WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR
OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY NEW YORK LAW.
10.16 WAIVER OF JURY TRIAL. THE COMPANY, THE BANKS AND THE
ADMINISTRATIVE AGENT EACH WAIVE 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, THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY, IN ANY ACTION, PROCEEDING OR 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. THE COMPANY, THE BANKS AND THE
ADMINISTRATIVE AGENT EACH AGREE 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 THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR
THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
-76-
77
10.17 NOTICE OF CLAIMS; CLAIMS BAR. THE COMPANY HEREBY AGREES THAT
IT SHALL GIVE PROMPT WRITTEN NOTICE OF ANY CLAIM OR CAUSE OF ACTION IT BELIEVES
IT HAS, OR MAY SEEK TO ASSERT OR ALLEGE AGAINST THE ADMINISTRATIVE AGENT OR ANY
BANK, WHETHER SUCH CLAIM IS BASED IN LAW OR EQUITY, ARISING UNDER OR RELATED TO
THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, OR TO THE LOANS (OR THE
COLLATERAL THEREFOR), OR ANY ACT OR OMISSION TO ACT BY THE ADMINISTRATIVE AGENT
OR ANY BANK WITH RESPECT HERETO OR THERETO, AND THAT IF IT SHALL FAIL TO GIVE
SUCH PROMPT NOTICE TO THE ADMINISTRATIVE AGENT WITH REGARD TO ANY SUCH CLAIM OR
CAUSE OF ACTION, IT SHALL BE DEEMED TO HAVE WAIVED, AND SHALL BE FOREVER BARRED
FROM BRINGING OR ASSERTING SUCH CLAIM OR CAUSE OF ACTION IN ANY SUIT, ACTION OR
PROCEEDING IN ANY COURT OR BEFORE ANY GOVERNMENTAL AGENCY.
10.18 ENTIRE AGREEMENT. This Agreement, together with the other
Loan Documents, embodies the entire agreement and understanding among the
Company, the Banks and the Administrative Agent, and supersedes all prior or
contemporaneous Agreements and understandings of such Persons, verbal or
written, relating to the subject matter hereof and thereof, except for the fees
described in the term sheet referenced in Section 2.11.
10.19 INTERPRETATION. This Agreement is the result of negotiations
between and has been reviewed by counsel to the Administrative Agent, the
Company and other parties, and is the product of all parties hereto.
Accordingly, this Agreement and the other Loan Documents shall not be construed
against the Banks or the Administrative Agent merely because of the
Administrative Agent's or Banks' involvement in the preparation of such
documents and agreements.
10.20 AMENDMENT AND RESTATEMENT OF EXISTING CREDIT FACILITY; WAIVER
OF BREAKFUNDING FEES. This Agreement amends and restates the Existing Credit
Facility as of the Closing Date, and advances outstanding under the Existing
Credit Facility (the "Continuing Loans") shall be deemed Loans continuing and
outstanding hereunder from and after the Closing Date. In order to cause all
Continuing Loans to be continued ratably by all Banks in accordance with their
new respective Pro Rata Shares hereunder, the Company shall be deemed to have
timely requested that all Continuing Loans be continued on the Closing Date as
Offshore Rate Loans hereunder made by all Banks in accordance with their new
respective Pro Rata Share. The Banks and the Administrative Agent hereby waive
the requirement that the Company pay any amounts under Section 3.4 in
connection with the continuation of the Continuing Loans on other than the last
day of the Interest Period applicable thereto.
-77-
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their proper and duly authorized officers as of the
day and year first above written.
CINEMARK USA, INC.
By /s/ XXXX XXXXXXX
-----------------------------------------
Name Xxxx Xxxxxxx
---------------------------------------
Title Senior Vice President
--------------------------------------
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
AS ADMINISTRATIVE AGENT
By /s/ XXXXX XXXXX
-----------------------------------------
Xxxxx Xxxxx
Vice President
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
AS ISSUING BANK AND A
BANK
By /s/ XXXXXX XXXXXX
-----------------------------------------
Xxxxxx Xxxxxx
Managing Director
S-1
79
NATIONSBANK OF TEXAS, N.A.,
AS SYNDICATION AGENT AND A BANK
By /s/ [ILLEGIBLE]
-----------------------------------------
Name
---------------------------------------
Title VICE PRESIDENT
--------------------------------------
S-2
80
BANKBOSTON, NA.,
AS A CO-AGENT AND A BANK
By /s/ XXXXX X. XXXXXX
-----------------------------------------
Name Xxxxx X. Xxxxxx
---------------------------------------
Title Managing Director
--------------------------------------
S-3
00
XXX XXXX XX XXXX XXXXXX,
AS A CO-AGENT AND A BANK
By /s/ XXXXX X. XXXXXX
-----------------------------------------
Name XXXXX X. XXXXXX
---------------------------------------
Title AUTHORIZED SIGNATORY
--------------------------------------
S-4
82
CIBC INC.,
AS A CO-AGENT AND A BANK
By /s/ XXXXXXX XXXXXXX
-----------------------------------------
Name XXXXXXX XXXXXXX
---------------------------------------
Title EXECUTIVE DIRECTOR
--------------------------------------
CIBC Xxxxxxxxxxx Corp., AS AGENT
S-5
83
FLEET BANK, N.A.
AS A CO-AGENT AND A BANK
By /s/ XXXXXXX XXXXXX
-----------------------------------------
Name XXXXXXX XXXXXX
---------------------------------------
Title SENIOR VICE PRESIDENT
--------------------------------------
S-6
00
XXX XXXX XX XXX XXXX
By /s/ XXXXXXXX X. XXXXXX
-----------------------------------------
Name Xxxxxxxx X. Xxxxxx
---------------------------------------
Title Vice President
--------------------------------------
S-7
85
THE BANK OF MONTREAL
By /s/ X. X. XXXXXX
-----------------------------------------
Name X.X. XXXXXX
---------------------------------------
Title DIRECTOR
--------------------------------------
S-8
86
COMERICA BANK - TEXAS
By /s/ XXXXXXX X. XXXXXX V.P.
-----------------------------------------
Name Xxxxxxx X. Xxxxxx
---------------------------------------
Title Vice President
--------------------------------------
S-9
87
FIRST HAWAIIAN BANK
By /s/ XXXXXX X. XXXXX
-----------------------------------------
Name Xxxxxx X. Xxxxx
---------------------------------------
Title vice President
--------------------------------------
S-10
88
THE FUJI BANK, LIMITED
By /s/ XXXXX XXXXXXXX
-----------------------------------------
Name XXXXX XXXXXXXX
---------------------------------------
Title VICE PRESIDENT & MANAGER
--------------------------------------
S-11
89
PNC BANK, NATIONAL ASSOCIATION
By /s/ XXXXXXX X. XXXXXX
-----------------------------------------
Name XXXXXXX X. XXXXXX
---------------------------------------
Title VICE PRESIDENT
--------------------------------------
S-12
90
THE SUMITOMO BANK, LIMITED
By /s/ XXXXXXX X. XXXXXX
-----------------------------------------
Name Xx. Xxxxxxx X. Xxxxxx
---------------------------------------
Title Assistant Vice President
--------------------------------------
By /s/ XXXX X. XXXXXX
-----------------------------------------
Name Xx. Xxxx X. Xxxxxx
---------------------------------------
Title Vice President & Manager
--------------------------------------
S-13
00
XXXXX XXXX XX XXXXXXXXXX, N.A.
By /s/ XXXXX X. XXXXXX
-----------------------------------------
Name Xxxxx X. Xxxxxx
---------------------------------------
Title Vice President
--------------------------------------
S-14
92
SCHEDULE 1.1
PROFORMA CASH FLOW FOR ANNUALIZED THEATRES
Proforma Cash Flow for Annualized Theatres shall be the sum of the Proforma Cash
Flow for each Annualized Theatre, calculated on an Annualized Theatre by
Annualized Theatre basis in accordance with the formula set forth below:
Proforma Cash Flow for each Annualized Theatre = Actual Full Quarter Cash Flow
-----------------------------
Annualization Factor
Where:
Actual Full Quarter Cash Flow means the sum of actual Cash Flow
from each Annualized Theatre for each Included Quarter.
Included Quarter means each full quarter that such Annualized
Theatre was in operation during the measurement period.
Annualization Factor means the sum of annualization factors set
forth below for Included Quarters:
Quarter ending March 31 of each year 0.22
Quarter ending June 30 of each year 0.24
Quarter ending September 30 of each year 0.31
Quarter ending December 31 of each year 0.23
====
Total 100.00
93
SCHEDULE 2.1
COMMITMENTS
AND PRO RATA SHARES
Bank Commitment Pro Rata Share
---- ---------- --------------
Bank of America National Trust and Savings Association $ 50,000,000 14.285714286%
NationsBank of Texas, N.A 50,000,000 14.285714286%
BankBoston, N.A 30,000,000 8.000000000%
The Bank of Nova Scotia 30,000,000 8.000000000%
CIBC Inc. 30,000,000 8.571428571%
Fleet Bank, N.A 30,000,000 8.571428571%
Comerica Bank - Texas 25,000,000 7.000000000%
Bank of Montreal 15,000,000 4.285714286%
The Bank of New York 15,000,000 4.285714286%
First Hawaiian Bank 15,000,000 4.285714286%
The Fuji Bank, Limited 15,000,000 4.285714286%
PNC Bank, National Association 15,000,000 4.285714286%
The Sumitomo Bank, Limited 15,000,000 4.285714286%
Union Bank of California, N.A 15,000,000 4.285714286%
============= =============
TOTAL $ 350,000,000 100.000000000%
94
SCHEDULE 5.7
ERISA PLANS
Cinemark USA Benefit Plans
1 Cinemark USA, Inc. 401(k) Profit Sharing Plan
2 Cinemark USA, Inc. Group Long Term Disability Plan
3 Cinemark USA, Inc. Group Health, Life and Cafeteria Plan
4 Cinemark USA, Inc. Nonqualified Stock Option Plan
5 Cinemark USA, Inc. Flexible Benefits Plan
95
SCHEDULE 5.13
SUBSIDIARIES
(See Attached)
96
SCHEDULE 7.5
EXISTING LIENS AND INDEBTEDNESS
A. Existing Indebtedness
1. Obligations under the Senior Subordinated Note Indentures.
B. Existing Liens
1. Trustees Lien pursuant to Senior Subordinated Note Indentures.
2. UCC Filing with State of Texas
a. Date: August 5, 1992
File Number: 92-00155512
Debtor: Cinemark USA, Inc.
Secured Party: Cinamerica Theatres L.P.
Property: Equipment
b. Date: August 5, 1992
File Number: 92-00155513
Debtor: Cinemark USA, Inc.
Secured Party: Cinamerica Theatres L.P.
Property: Equipment
x. Xxxx: August 17, 1992
File Number: 92-00162712
Debtor: Cinemark USA, Inc.
Secured Party: United Artists Theatre Circuit, Inc.
Property: Equipment
3. Obligations under that Certain promissory note dated April 10,
1997 payable to Xxxxxx X. Xxxxxxxx and Xxxxxx X. Xxxxxxxx in the
principal amount of $365,000.
97
SCHEDULE 10.2
OFFSHORE AND DOMESTIC LENDING OFFICES,
ADDRESSES FOR NOTICES
CINEMARK USA, INC.
CINEMARK USA, INC.
Suite 800
0000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxx 00000-0000
Attention: Xxxxxxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Administrative Agent
Notices of Borrowing and Notices of Conversion/Continuation:
Bank of America National Trust
and Savings Association
Agency Administrative Services #5596
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Other Notices:
Bank of America National Trust
and Savings Association
Agency Management #10831
0000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxx
Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
98
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as a Bank
Domestic and Offshore Lending Office:
0000 Xxxxxxx Xxxxxxxxx, Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Notices (other than Borrowing notices and Notices of Conversion/Continuation):
Bank of America National Trust
and Savings Association
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention:
Xxx Xxxxxxx
Managing Director
Credit Products #3283
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
NATIONSBANK OF TEXAS, N.A.
Domestic and Offshore Lending Office and Notices:
NationsBank of Texas, N.A.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxx
Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
CIBC INC.
Domestic and Offshore Lending Office and Notices:
CIBC Wood Gundy Securities Corp., "as Agent"
for CIBC Inc.
000 Xxxxxxxxx Xxxxxx
Media Group, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
00
XXX XXXX XX XXX XXXX
Domestic and Offshore Lending Office and Notices:
The Bank of New York
Communications Division, 16th Floor South
Xxx Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx
Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
BANKBOSTON, N.A.
Domestic and Offshore Lending Office and Notices:
BankBoston, N.A.
Media & Communications
000 Xxxxxxx Xxxxxx XX 00-00-00
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
FLEET BANK, N.A.
Domestic and Offshore Lending Office and Notices:
Fleet Bank, N.A.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxx
Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
000
XXXXXXXX XXXX - XXXXX
Domestic and Offshore Lending Office and Notices:
Comerica Bank - Texas
0000 Xxxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
THE BANK OF NOVA SCOTIA
Domestic and Offshore Lending Office and Notices:
The Bank of Nova Scotia
Xxx Xxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
The Bank of Nova Scotia
Xxx Xxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxxxxx
THE FUJI BANK, LIMITED
Domestic and Offshore Lending Office and Notices:
The Fuji Bank, Limited
Two World Trade Center, 79th Floor
New York, NY 10048
Attention: Xxxxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
101
with a copy to:
The Fuji Bank, Limited
Two World Trade Center, 79th Floor
New York, NY 10048
Attention: Xxxxx Xxxxxxxx
Vice President and Manager
THE SUMITOMO BANK, LIMITED
Domestic and Offshore Lending Office and Notices:
The Sumitomo Bank, Limited
000 X. Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
The Sumitomo Bank, Limited
0000 Xxx Xxxxxx, xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
The Sumitomo Bank, Limited
0000 Xxx Xxxxxx, xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
Assistant Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
BANK OF MONTREAL
Domestic and Offshore Lending Office and Notices:
Bank of Montreal
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
102
with a copy to:
Bank of Montreal
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
FIRST HAWAIIAN BANK
Domestic and Offshore Lending Office and Notices:
First Hawaiian Bank
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxx Deekins
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
First Hawaiian Bank
0000 Xxxxxxxxx Xxxxx, #000
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
PNC BANK, NATIONAL ASSOCIATION
Domestic and Offshore Lending Office and Notices:
PNC Bank, National Association
Communications Banking Division
00xx Xxxxx, Xxxx Xxxx X0-X000-00-0
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxx Xxxxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
103
with a copy to:
PNC Bank, National Association
Communications Banking Division
00xx Xxxxx, Xxxx Xxxx X0-X000-00-0
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
UNION BANK OF CALIFORNIA, N.A.
Domestic and Offshore Lending Office and Notices:
Union Bank of California, N.A.
000 Xxxxx Xxxxxxxx Xxxxxx, X00-000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Union Bank of California, N.A.
000 Xxxxx Xxxxxxxx Xxxxxx, X00-000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxxx
Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
104
EXHIBIT A
FORM OF NOTICE OF BORROWING
TO: Bank of America National Trust and Savings Association, as
Administrative Agent
Pursuant to Section 2.3 of that 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
Banks named therein (the "Banks"), Bank of America National Trust and Savings
Association, as Administrative Agent (the "Administrative Agent"), NationsBank
of Texas, N.A. as Syndication Agent, and BankBoston, N.A., The Bank of Nova
Scotia, CIBC Inc. and Fleet Bank, N.A., as Co-Agents, this represents the
Company's request to borrow on from the Banks, according to their respective Pro
Rata Share, $ ___________ as [Base Rate] [Offshore Rate] Loans. [The initial
Interest period for such Offshore Rate is requested to be a -month period]. The
proceeds of such Loans are to be deposited in the Company's account at the
Administrative Agent.
The undersigned Responsible Officer hereby certifies that:
(a) the representations and warranties of the Company contained in the
Credit Agreement are true and correct in all material respects on and as of the
date hereof to the same extent as though made on and as of the date hereof
(except to the extent such representations and warranties relate to an earlier
date, in which case they were true and correct as of such date); and
(b) no Default or Event of Default has occurred and is continuing under
the Credit Agreement or will result from the proposed borrowing.
DATED:
------------------
CINEMARK USA, INC.
By
-----------------------------------
Name
---------------------------------
Title
--------------------------------
105
EXHIBIT B
FORM OF NOTICE OF CONVERSION/CONTINUATION
TO: Bank of America National Trust and Savings Association, as
Administrative Agent
1. Conversion Selection. Pursuant to Section 2.4 of that 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., a Texas corporation (the "Company"), the Banks named therein (the
"Banks"), Bank of America National Trust and Savings Association, as
Administrative Agent (the "Administrative Agent"), NationsBank of Texas, N.A. as
Syndication Agent, and BankBoston, N.A., The Bank of Nova Scotia, CIBC Inc. and
Fleet Bank, N.A., as Co-Agents, this represents the Company's request to convert
$________________of existing [Base Rate] [Offshore Rate] Loans on
_______________, ______, to [Offshore Rate] [Base Rate] Loans, as follows:
Interest Period
(Offshore
Dollar Amount Rate Loans)
------------- ----------
$_____ _____ ________months
2. Continuation Selection. (Offshore Rate Loans). Pursuant to Section
2.4 of the Agreement, please continue $_______of existing Offshore Rate Loans,
the final day of the current Interest Period of which is __________, 19____, as
follows:
Requested
Dollar Amount Interest Period
------------- ---------------
$___________ ______ months
CINEMARK USA, INC.
By
-----------------------------------
Name
---------------------------------
Title
--------------------------------
106
EXHIBIT C-1
SECOND AMENDED AND RESTATED
XXXXXXXX FAMILY PLEDGE AGREEMENT
THIS SECOND AMENDED AND RESTATED XXXXXXXX FAMILY PLEDGE AGREEMENT (this
"Agreement"), dated as of February 12, 1998, is executed by CINEMARK, USA, INC.,
a Texas corporation (the "Company") and the undersigned pledgors (each a
"Pledgor" and collectively, the "Pledgors") 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"),
and amends and restates the Pledge Agreement dated as of February 14, 1996
executed by the Pledgors in favor of the Administrative Agent, as amended and
restated by that certain First Amended and Restated Xxxxxxxx Family Pledge
Agreement dated as of December 12, 1996, as amended.
RECITALS
A. Concurrently herewith, 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 of Texas, N.A. as Syndication Agent,
and BankBoston, N.A., The Bank of Nova Scotia, CIBC Inc. and Fleet
Bank, N.A., as Co-Agents, are entering into a Second Amended and
Restated Credit Agreement dated as of even date herewith (as amended,
supplemented, restated or otherwise modified from time to time, the
"Credit Agreement"), subject to and upon the condition among others,
that the Pledgors execute this Agreement in favor of the Secured
Parties. The Credit Agreement amends and restates the Existing Credit
Facility.
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 making of the Credit Extensions by
the Banks under the Credit Agreement that the Pledgors shall have
granted the security interest contemplated by this Agreement and the
Secured Parties are relying on the undertakings of the Pledgors and the
Company 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.
B-1
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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, each 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 such 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 opposite such Pledgor's name, as set forth
on Schedule 1 (collectively, the "Pledged Shares");
(ii) all additional shares of stock of the Company from time
to time acquired by such 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, each
Pledgor may receive free and clear of any security interest
under this Agreement any cash dividends paid in respect of the
Pledged Shares.
(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 any 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.
(c) Notwithstanding anything contained in this Agreement to the
contrary, and except for the obligation of each Pledgor to deliver the
Collateral owned by such Pledgor to the Secured
108
Parties pursuant to the provisions hereof, in no event shall any Pledgor have
any personal liability with respect to the Obligations or any obligations, debt
or other liabilities that may arise under this Agreement and Secured Parties
recourse against such Pledgor shall be limited solely to the Collateral owned by
such Pledgor.
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 Company and each 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 Company and each Pledgor
severally represents and warrants as to himself or itself as follows:
(a) The chief place of business and chief executive office of such
Pledgor and the office where such Pledgor keeps its records concerning the
Collateral (hereinafter, "Records") is located at the address for notices for
such Pledgor as provided in Section 19(g).
(b) The Pledged Shares owned by such Pledgor have been duly authorized
and validly issued and are fully paid and nonassessable.
(c) To the knowledge of Pledgor the Pledged Shares constitute at least
the percentage of the issued and outstanding shares of stock or equity interests
of the Company as of the Closing Date as disclosed on Schedule 1 attached
hereto. There are no existing options, warrants, shareholder agreements, calls
or commitments of any character whatsoever relating to any of the Pledged Shares
owned by such 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 such Pledgor is on
file in any recording office, except as may have been filed pursuant to this
Agreement.
(e) Such Pledgor is lawfully possessed of ownership of the Collateral
owned by such 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 such 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 Company and any such Pledgor which is a corporation is duly
organized and existing under the laws of the state of its incorporation, and is
properly licensed and in good
109
standing in, and where necessary to maintain its rights and privileges has
complied with the fictitious name statute of, every jurisdiction in which it is
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 Company or such Pledgor to perform its obligations hereunder or
under any instrument or agreement required hereunder.
(h) If such Pledgor is a trust (a "Trust"), it is evidenced by those
certain trust agreement(s) described on Schedule 4 relating to such Trust, and a
true and correct copy of such trust agreement, and all amendments thereto, has
been delivered to the Administrative Agent. Such Trust is irrevocable. The
trustee of such trust is duly authorized under the terms of such trust agreement
to from time to time execute and deliver, reaffirm and/or renew, this Agreement.
This Agreement is being executed and delivered for a proper trust purpose.
(i) The execution, delivery and performance of this Agreement and any
instrument or agreement required hereunder are within the corporate or trust
power of the Company and such Pledgor, as the case may be, have been duly
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 Company
and such Pledgor.
(j) 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 Company or such 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.
(k) There is no law, rule or regulation, nor is there any judgment,
decree or order of any court or governmental authority binding on the Company or
such Pledgor, which would be contravened by the execution, delivery, performance
or enforcement by the Company or such Pledgor of this Agreement or any
instrument or agreement required hereunder.
(l) This Agreement is a legal, valid and binding agreement of the
Company and such Pledgor, enforceable against the Company and such 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.
(m) There is no action, suit or proceeding pending against, or to the
knowledge of the Company or such Pledgor, threatened against or affecting the
Company or such 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.
(n) The execution, delivery and performance by the Company and such
Pledgor of
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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 Company or such Pledgor is a
party.
111
4. FURTHER ASSURANCES; SUPPLEMENTS.
(a) The Company and each Pledgor agree 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 Company and each 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.
(b) The Company and each Pledgor hereby authorize 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
such Pledgor where permitted by law.
(c) The Company or each 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) Each 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) Each Pledgor shall, upon obtaining any additional shares of the
Company or any other securities constituting Collateral, and the Company shall,
when required to do so by Section 18 hereof, cause the owner of such shares of
the Company to, 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. Each 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.
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5. COVENANTS OF PLEDGORS AND COMPANY.
(a) Each 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 no Pledgor shall 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) Each 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 such
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. Each Pledgor will hold and preserve all Records and will,
upon 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) No Pledgor shall sell, assign (by operation of law or otherwise) or
otherwise dispose of any of the Collateral.
(d) No Pledgor shall 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 such Pledgor's rights to the
Collateral against the claims and demands of all Persons whatsoever.
(e) Each 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) Each Pledgor agrees that it will use its best efforts to cause the
Company not to issue any stock or other securities in addition to or in
substitution for the Pledged Shares except: (i) to a Pledgor, (ii) any stock
options issued to employees of the Company and any shares of capital stock of
the Company issuable upon the exercise of such options, and (iii) shares of
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common stock of the Company not exceeding 15% of the shares of common stock of
the Company outstanding on the date of issuance after giving effect to such
issuance.
(g) Each Pledgor which is a trust agrees to immediately notify the
Administrative Agent if: (a) its Trust is revoked or terminated; (b) its Trust
is amended, in which case such Pledgor agrees to also provide the Administrative
Agent with correct copies of the amendment(s); or (c) one or more trustee(s)
change, in which case such Pledgor also agrees to provide the Administrative
Agent with signature exemplars of any new trustee(s).
(h) The Company will not issue any Voting Stock except in compliance
with Section 18.
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 any Pledgor):
(i) each 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) each 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:
(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 each Pledgor, be received in trust for the benefit
of the Administrative Agent, be segregated from the other
property or funds of each 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 each Pledgor all such proxies
and other instruments as each Pledgor may reasonably request for the
purpose of enabling each Pledgor to exercise
114
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 each 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 each 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 any 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 each 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, each 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 Company and
each Pledgor hereby irrevocably appoints the Administrative Agent the Company's
and such 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 Company and such Pledgor and in the name of the Company and such 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, enforce Section 18, indorse and collect any drafts or
other instruments, documents and chattel paper in connection therewith, and to
file any claims or
115
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 th 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 assert against the Secured
Parties with respect to the Company's or Pledgors's obligations under this
Agreement any defense (legal or equitable), set-off, counterclaim, or claim
which Pledgors may now or at any time hereafter have against the Secured Parties
