EXHIBIT 10.16
EXHIBIT A
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AMENDED AND RESTATED
GUARANTEE AND COLLATERAL AGREEMENT
made by
CINEMARK, INC.,
CNMK HOLDING, INC.,
CINEMARK USA, INC.,
and certain of its Subsidiaries
in favor of
XXXXXX COMMERCIAL PAPER INC.,
as Administrative Agent
Dated as of April 2, 2004
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TABLE OF CONTENTS
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SECTION 1. DEFINED TERMS............................................................... 2
1.1 Definitions................................................................. 2
1.2 Other Definitional Provisions............................................... 7
SECTION 2. GUARANTEE................................................................... 7
2.1 Guarantee................................................................... 7
2.2 Right of Contribution....................................................... 8
2.3 No Subrogation.............................................................. 8
2.4 Amendments, etc. with respect to the Borrower Obligations................... 9
2.5 Guarantee Absolute and Unconditional........................................ 9
2.6 Reinstatement............................................................... 11
2.7 Payments.................................................................... 11
SECTION 3. GRANT OF SECURITY INTEREST.................................................. 11
3.1 Security Interest........................................................... 11
3.2 Confirmation of Existing Security Interest.................................. 12
SECTION 4. REPRESENTATIONS AND WARRANTIES.............................................. 12
4.1 Representations in Credit Agreement......................................... 12
4.2 Title; No Other Liens....................................................... 13
4.3 Perfected First Priority Liens.............................................. 13
4.4 Jurisdiction of Organization; Chief Executive Office........................ 13
4.5 Inventory and Equipment..................................................... 13
4.6 Farm Products............................................................... 13
4.7 Investment Property......................................................... 13
4.8 Receivables................................................................. 14
4.9 Intellectual Property....................................................... 14
SECTION 5. COVENANTS................................................................... 15
5.1 Covenants in Credit Agreement............................................... 15
5.2 Delivery of Instruments and Chattel Paper................................... 15
5.3 Maintenance of Insurance.................................................... 15
5.4 Payment of Obligations...................................................... 15
5.5 Maintenance of Perfected Security Interest; Further Documentation........... 16
5.6 Changes in Locations, Name, etc............................................. 16
5.7 Notices..................................................................... 16
5.8 Investment Property......................................................... 17
5.9 Receivables................................................................. 18
5.10 Intellectual Property....................................................... 18
SECTION 6. REMEDIAL PROVISIONS......................................................... 20
6.1 Certain Matters Relating to Receivables..................................... 20
6.2 Communications with Obligors; Grantors Remain Liable........................ 21
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6.3 Pledged Stock............................................................... 21
6.4 Proceeds to be Turned Over To Administrative Agent.......................... 22
6.5 Application of Proceeds..................................................... 22
6.6 Code and Other Remedies..................................................... 23
6.7 Registration Rights......................................................... 24
6.8 Deficiency.................................................................. 24
SECTION 7. THE ADMINISTRATIVE AGENT.................................................... 24
7.1 Administrative Agent's Appointment as Attorney-in-Fact, etc................. 24
7.2 Duty of Administrative Agent................................................ 26
7.3 Execution of Financing Statements........................................... 26
7.4 Authority of Administrative Agent........................................... 27
SECTION 8. MISCELLANEOUS............................................................... 27
8.1 Amendments in Writing....................................................... 27
8.2 Notices..................................................................... 27
8.3 No Waiver by Course of Conduct; Cumulative Remedies......................... 27
8.4 Enforcement Expenses; Indemnification....................................... 27
8.5 Successors and Assigns...................................................... 28
8.6 Set-Off..................................................................... 28
8.7 Counterparts................................................................ 29
8.8 Severability................................................................ 29
8.9 Section Headings............................................................ 29
8.10 Integration................................................................. 29
8.11 GOVERNING LAW............................................................... 29
8.12 Submission To Jurisdiction; Waivers......................................... 29
8.13 Acknowledgments............................................................. 30
8.14 Additional Grantors......................................................... 30
8.15 Releases.................................................................... 30
8.16 WAIVER OF JURY TRIAL........................................................ 31
8.17 Additional Waiver........................................................... 31
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Schedules
Schedule 1 Description of Pledged Securities
Schedule 2 Filings and Other Actions Required to Perfect Security Interest
Schedule 3 Jurisdiction of Organization, Identification Number and Location of
Chief Executive Office
Schedule 4 Locations of Inventory and Equipment
Schedule 5 Receivables
Schedule 6 Intellectual Property
Annexes
Annex I Assumption Agreement
Annex II Acknowledgment and Consent
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AMENDED AND RESTATED GUARANTEE AND COLLATERAL AGREEMENT, dated
as of April 2, 2004, made by each of the signatories hereto (together with any
other entity that may become a party hereto as provided herein, the "Grantors"),
in favor of XXXXXX COMMERCIAL PAPER INC., as Administrative Agent (in such
capacity, the "Administrative Agent") for the benefit of the Secured Parties (as
defined below), including the banks, other financial institutions and other
entities (the "Lenders") from time to time parties to the Amended and Restated
Credit Agreement, dated as of April 2, 2004 (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"), among CINEMARK,
INC., a Delaware corporation (the "Parent"), CNMK HOLDING, INC., a Delaware
corporation ("Holdings"), CINEMARK USA, INC., a Texas corporation (the
"Borrower"), the Lenders, XXXXXX BROTHERS INC. and XXXXXXX XXXXX CREDIT PARTNERS
L.P., as joint lead arrangers and joint bookrunners (in such capacity, the
"Arrangers"), XXXXXXX SACHS CREDIT PARTNERS L.P., as syndication agent (in such
capacity, the "Syndication Agent"), DEUTSCHE BANK SECURITIES INC., THE BANK OF
NEW YORK, GENERAL ELECTRIC CAPITAL CORPORATION and CIBC INC., as
co-documentation agents (in such capacity, the "Co-Documentation Agents"), and
the Administrative Agent.
W I T N E S S E T H:
WHEREAS, the Parent, Holdings and the Borrower are party to
the Credit Agreement, dated as of February 14, 2003 (as amended, supplemented or
otherwise modified prior to the date hereof, the "Existing Credit Agreement"),
together with the lenders party from time to time thereto and Xxxxxx Commercial
Paper Inc., as administrative agent;
WHEREAS, the Parent, Holdings and the Borrower are party to
the Guarantee and Collateral Agreement, dated as of February 14, 2003 (as
amended, supplemented or otherwise modified prior to the date hereof, the
"Existing Collateral Agreement"), together with the other grantors parties
thereto and Xxxxxx Commercial Paper Inc., as administrative agent;
WHEREAS, pursuant to the Credit Agreement, the Lenders have
agreed to amend and restate the Existing Credit Agreement and severally make
further extensions of credit to the Borrower upon the terms and subject to the
conditions set forth therein;
WHEREAS, the Borrower is a member of an affiliated group of
companies that includes the Parent, Holdings and each other Grantor;
WHEREAS, the proceeds of the extensions of credit under the
Credit Agreement will be (and were, under the Existing Credit Agreement) used in
part to enable the Borrower to make valuable transfers to the Parent, Holdings
and one or more of the other Grantors in connection with the operation of their
respective businesses;
WHEREAS, certain of the Qualified Counterparties may enter
into Specified Hedge Agreements with the Borrower or any Class I Restricted
Subsidiary;
WHEREAS, the Borrower, the Parent, Holdings and the other
Grantors are engaged in related businesses, and the Parent, Holdings and each
Grantor will derive substantial
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direct and indirect benefit from the entering into of the Credit Agreement and
the making of the extensions of credit under the Credit Agreement and from the
Specified Hedge Agreements;
WHEREAS, it is a condition precedent to the obligation of the
Lenders to enter into the Credit Agreement and to make their respective further
extensions of credit to the Borrower under the Credit Agreement that the Parent,
Holdings and the Grantors shall have executed and delivered this Agreement to
the Administrative Agent for the ratable benefit of the Secured Parties;
WHEREAS, the Borrower and the other Grantors are engaged in
related businesses, and each Grantor will derive substantial direct and indirect
benefit from the making of the extensions of credit under the Credit Agreement
and the making of this Agreement; and
WHEREAS, this Agreement is necessary and convenient to the
conduct, promotion and attainment of the business of the Borrower and each other
Grantor;
NOW, THEREFORE, in consideration of the premises and to induce
the Administrative Agent and the Lenders to enter into the Credit Agreement and
to induce the Lenders to make their respective extensions of credit to the
Borrower thereunder, each Grantor hereby agrees with the Administrative Agent,
for the ratable benefit of the Secured Parties, to amend and restate the
Existing Collateral Agreement as follows:
SECTION 1. DEFINED TERMS
1.1 Definitions. (a) Unless otherwise defined herein,
terms defined in the Credit Agreement and used herein shall have the meanings
given to them in the Credit Agreement and the following terms are used herein as
defined in the New York UCC: Accounts, Certificated Security, Chattel Paper,
Commercial Tort Claims, Documents, Equipment, Farm Products, General
Intangibles, Goods, Instruments, Inventory, Letter-of-Credit Rights and
Supporting Obligations.
(b) The following terms shall have the following
meanings:
"Agreement": this Amended and Restated Guarantee and
Collateral Agreement, as the same may be amended, supplemented or
otherwise modified from time to time.
"Borrower Credit Agreement Obligations": the collective
reference to the unpaid principal of and interest on the Loans and
Reimbursement Obligations and all other obligations and liabilities of
the Borrower (including, without limitation, interest accruing at the
then applicable rate provided in the Credit Agreement after the
maturity of the Loans and Reimbursement Obligations and interest
accruing at the then applicable rate provided in the Credit Agreement
after the filing of any petition in bankruptcy, or the commencement of
any insolvency, reorganization or like proceeding, relating to the
Borrower, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding) to the Administrative Agent or
any Lender, whether direct or indirect, absolute or contingent, due or
to become due, or now existing or hereafter incurred, which may arise
under, out of, or in connection with, the Credit Agreement, this
Agreement, or the other Loan Documents, or any Letter of Credit, or any
other document
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made, delivered or given in connection therewith, in each case whether
on account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses or otherwise (including, without
limitation, all fees and disbursements of counsel to the Administrative
Agent or to the Secured Parties that are required to be paid by the
Borrower pursuant to the terms of any of the foregoing agreements).
"Borrower Hedge Agreement Obligations": the collective
reference to all obligations and liabilities of the Borrower
(including, without limitation, interest accruing at the then
applicable rate provided in any Specified Hedge Agreement after the
filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to the
Borrower, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding) to any Qualified Counterparty,
whether direct or indirect, absolute or contingent, due or to become
due, or now existing or hereafter incurred, which may arise under, out
of, or in connection with, any Specified Hedge Agreement or any other
document made, delivered or given in connection therewith, in each case
whether on account of principal, interest, reimbursement obligations,
fees, indemnities, costs, expenses or otherwise (including, without
limitation, all fees and disbursements of counsel to the relevant
Qualified Counterparty that are required to be paid by the Borrower
pursuant to the terms of any Specified Hedge Agreement).
"Borrower Obligations": the collective reference to (i) the
Borrower Credit Agreement Obligations, (ii) the Borrower Hedge
Agreement Obligations, but only to the extent that, and only so long
as, the Borrower Credit Agreement Obligations are secured and
guaranteed pursuant hereto, and (iii) all other obligations and
liabilities of the Borrower, whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, out of, or in connection with, this
Agreement (including, without limitation, all fees and disbursements of
counsel to the Administrative Agent or to the Secured Parties that are
required to be paid by the Borrower pursuant to the terms of this
Agreement).
"Collateral": as defined in Section 3.
"Collateral Account": any collateral account established by
the Administrative Agent as provided in Section 6.1 or 6.4.
"Copyrights": (i) all copyrights arising under the laws of the
United States or any political subdivision thereof, whether registered
or unregistered and whether published or unpublished (including,
without limitation, those listed in Schedule 6), all registrations and
recordings thereof, and all applications in connection therewith,
including, without limitation, all registrations, recordings and
applications in the United States Copyright Office, and (ii) the right
to obtain all renewals thereof.
"Copyright Licenses": any written agreement naming any Grantor
as licensor or licensee (including, without limitation, those listed in
Schedule 6), granting any right under any Copyright, including, without
limitation, the grant of rights to manufacture, distribute, exploit and
sell materials derived from any Copyright.
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"Deposit Account": as defined in the Uniform Commercial Code
of any applicable jurisdiction and, in any event, including, without
limitation, any demand, time, savings, passbook or like account
maintained with a depositary institution.
"Excluded Assets": (i) Capital Stock of Unrestricted
Subsidiaries which are Foreign Subsidiaries, (ii) any contract, General
Intangible, Copyright License, Patent License or Trademark License
("Intangible Assets"), in each case to the extent the grant by the
relevant Grantor of a security interest pursuant to this Agreement in
such Grantor's right, title and interest in such Intangible Asset (A)
is prohibited by any contract, agreement, instrument or indenture
governing such Intangible Asset, (B) would give any other party to such
contract, agreement, instrument or indenture the right to terminate its
obligations thereunder, (C) is permitted only with the consent of
another party, if such consent has not been obtained or (D) is
prohibited by any contract creating a Lien permitted by Section 7.3 of
the Credit Agreement; provided, that any Receivable or any money or
other amounts due or to become due under any such contract, agreement,
instrument or indenture shall not be Excluded Assets, (iii) any asset
other than an Intangible Asset to the extent the grant by the relevant
Grantor of a security interest pursuant to this Agreement in such
Grantor's right, title and interest in such asset is prohibited by any
contract creating a Lien on such asset permitted by Section 7.3 of the
Credit Agreement, and (iv) subject to Section 5.8(e), the Capital Stock
of Fandango, Inc., Laredo Theatre, Ltd. and Greeley, Ltd. held by any
Grantor to the extent and so long as such Capital Stock is subject to
the restrictions on pledge (such as rights of first refusal or similar
rights) set forth in the relevant stockholders agreement or partnership
agreement.
"Foreign Subsidiary": any Subsidiary organized under the laws
of any jurisdiction outside the United States of America.
"Guarantor Hedge Agreement Obligations": the collective
reference to all obligations and liabilities of a Guarantor (including,
without limitation, interest accruing at the then applicable rate
provided in any Specified Hedge Agreement after the filing of any
petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to such Guarantor, whether
or not a claim for post-filing or post-petition interest is allowed in
such proceeding) to any Qualified Counterparty, whether direct or
indirect, absolute or contingent, due or to become due, or now existing
or hereafter incurred, which may arise under, out of, or in connection
with, any Specified Hedge Agreement or any other document made,
delivered or given in connection therewith, in each case whether on
account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses or otherwise (including, without
limitation, all fees and disbursements of counsel to the relevant
Qualified Counterparty that are required to be paid by such Guarantor
pursuant to the terms of any Specified Hedge Agreement).
"Guarantor Obligations": with respect to any Guarantor, the
collective reference to (i) any Guarantor Hedge Agreement Obligations
of such Guarantor, but only to the extent that, and only so long as,
the other Obligations of such Guarantor are secured and guaranteed
pursuant hereto, and (ii) all obligations and liabilities of such
Guarantor which may arise under or in connection with this Agreement
(including, without limitation, Section 2) or any other Loan Document
to which such Guarantor is a party, in
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each case whether on account of guarantee obligations, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise
(including, without limitation, all fees and disbursements of counsel
to the Administrative Agent or to the Secured Parties that are required
to be paid by such Guarantor pursuant to the terms of this Agreement or
any other Loan Document).
"Guarantors": the collective reference to each Grantor other
than the Borrower.
"Intellectual Property": the collective reference to all
rights, priorities and privileges relating to intellectual property
arising under United States laws, including, without limitation, the
Copyrights, the Copyright Licenses, the Patents, the Patent Licenses,
the Trademarks and the Trademark Licenses, and all rights to xxx at law
or in equity for any infringement or other impairment thereof,
including the right to receive all proceeds and damages therefrom.
"Intercompany Note": any promissory note evidencing loans made
by any Grantor to Parent or any of its Subsidiaries.
"Investment Property": the collective reference to (i) all
"investment property" as such term is defined in Section 9-102(a)(49)
of the New York UCC (other than (A) any Foreign Subsidiary Voting Stock
excluded from the definition of "Pledged Stock" and (B) Excluded
Assets) and (ii) whether or not constituting "investment property" as
so defined, all Pledged Notes and all Pledged Stock.
"Issuers": the collective reference to each issuer of any
Investment Property.
"New York UCC": the Uniform Commercial Code as from time to
time in effect in the State of New York.
"Obligations": (i) in the case of the Borrower, the Borrower
Obligations, and (ii) in the case of each Guarantor, its Guarantor
Obligations.
"Patents": (i) all letters patent of the United States or any
political subdivision thereof, all reissues and extensions thereof and
all goodwill associated therewith, including, without limitation, any
of the foregoing referred to in Schedule 6, (ii) all applications for
letters patent of the United States and all divisions, continuations
and continuations-in-part thereof, including, without limitation, any
of the foregoing referred to in Schedule 6, and (iii) all rights to
obtain any reissues or extensions of the foregoing.
"Patent License": all agreements, whether written or oral,
providing for the grant by or to any Grantor of any right to
manufacture, use or sell any invention covered in whole or in part by a
Patent, including, without limitation, any of the foregoing referred to
in Schedule 6.
"Pledged Notes": all promissory notes listed on Schedule 1,
all Intercompany Notes at any time issued to any Grantor and all other
promissory notes issued to or held by any Grantor (other than (i)
promissory notes issued in connection with extensions of
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trade credit by any Grantor in the ordinary course of business and (ii)
promissory notes the aggregate face amount of which are not in excess
of $100,000).
"Pledged Securities": the collective reference to the Pledged
Notes and the Pledged Stock.
"Pledged Stock": the shares of Capital Stock listed on
Schedule 1, together with any other shares, stock certificates, options
or rights of any nature whatsoever in respect of the Capital Stock of
any Person that may be issued or granted to, or held by, any Grantor
while this Agreement is in effect; provided that in no event shall more
than 65% of the total outstanding Foreign Subsidiary Voting Stock of
any Foreign Subsidiary be required to be pledged hereunder.
"Proceeds": all "proceeds" as such term is defined in Section
9-102(a)(64) of the New York UCC on the date hereof and, in any event,
including, without limitation, all dividends or other income from the
Investment Property, collections thereon or distributions or payments
with respect thereto.
"Receivable": any right to payment for goods sold or leased or
for services rendered, whether or not such right is evidenced by an
Instrument or Chattel Paper and whether or not it has been earned by
performance (including, without limitation, any Account).
"Secured Parties": the collective reference to the
Administrative Agent, the Lenders (including any Issuing Lender in its
capacity as Issuing Lender) and any Qualified Counterparty.
"Securities Act": the Securities Act of 1933, as amended.
"Specified Hedge Agreement": any Hedge Agreement entered into
by (i) the Borrower or any of its Class I Restricted Subsidiaries and
(ii) any Person that, at the time such Hedge Agreement is entered into,
is a Qualified Counterparty.
"Trademarks": (i) all trademarks, trade names, corporate
names, company names, business names, fictitious business names, trade
styles, service marks, logos and other source or business identifiers,
and all goodwill associated therewith, now existing or hereafter
adopted or acquired, all registrations and recordings thereof, and all
applications in connection therewith, whether in the United States
Patent and Trademark Office or in any similar office or agency of the
United States, any State thereof or any political subdivision thereof,
or otherwise, and all common-law rights related thereto, including,
without limitation, any of the foregoing referred to in Schedule 6, and
(ii) the right to obtain all renewals thereof.
"Trademark License": any agreement, whether written or oral,
providing for the grant by or to any Grantor of any right to use any
Trademark, including, without limitation, any of the foregoing referred
to in Schedule 6.
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1.2 Other Definitional Provisions. (a) The words
"hereof," "herein", "hereto" and "hereunder" and words of similar import when
used in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement, and Section and Schedule references are
to this Agreement unless otherwise specified.
(b) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
(c) Where the context requires, terms relating to the
Collateral or any part thereof, when used in relation to a Grantor, shall refer
to such Grantor's Collateral or the relevant part thereof.
SECTION 2. GUARANTEE
2.1 Guarantee. (a) Each of the Guarantors confirms,
acknowledges and reaffirms its guarantee of the Borrower Obligations under the
Existing Collateral Agreement and confirms and acknowledges that such guarantee
remains in full force and effect and is not subject to any defense, setoff or
counterclaim, all of which are hereby waived.
(b) (i) The Guarantors hereby, jointly and severally,
unconditionally and irrevocably, guarantee to the Administrative Agent, for the
ratable benefit of the Secured Parties and their respective successors,
indorsees, transferees and assigns, the prompt and complete payment and
performance by the Borrower when due (whether at stated maturity, by
acceleration or otherwise) of the Borrower Obligations (other than, in the case
of each Guarantor, Borrower Obligations arising pursuant to clause (ii) of this
Section 2.1(b) in respect of Guarantor Hedge Agreement Obligations in respect of
which such Guarantor is a primary obligor).
(ii) The Borrower hereby unconditionally and irrevocably
guarantees to the Administrative Agent, for the ratable benefit of the Secured
Parties and their respective successors, endorsees, transferees and assigns, the
prompt and complete payment and performance by each Guarantor when due (whether
at stated maturity, by acceleration or otherwise) of the Guarantor Hedge
Agreement Obligations of such Guarantor.
(c) Anything herein or in any other Loan Document to the
contrary notwithstanding, the maximum liability of each Guarantor hereunder and
under the other Loan Documents shall in no event exceed the amount which can be
guaranteed by such Guarantor under applicable federal and state laws relating to
the insolvency of debtors (after giving effect to the right of contribution
established in Section 2.2).
(d) Each Guarantor agrees that the Borrower Obligations
may at any time and from time to time exceed the amount of the liability of such
Guarantor hereunder without impairing the guarantee of such Guarantor contained
in this Section 2 or affecting the rights and remedies of the Administrative
Agent or any Secured Party hereunder.
(e) The guarantee contained in this Section 2 shall
remain in full force and effect until all the Borrower Obligations and the
obligations of each Guarantor under the guarantee contained in this Section 2
shall have been satisfied by payment in full, no Letter of Credit shall be
outstanding and the Commitments shall be terminated, notwithstanding that from
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time to time during the term of the Credit Agreement the Borrower may be free
from any Borrower Obligations and any or all of the Guarantors may be free from
their respective Guarantor Obligations.
(f) No payment made by the Borrower, any of the
Guarantors, any other guarantor or any other Person or received or collected by
the Administrative Agent or any Secured Party from the Borrower, any of the
Guarantors, any other guarantor or any other Person by virtue of any action or
proceeding or any set-off or appropriation or application at any time or from
time to time in reduction of or in payment of the Borrower Obligations or the
Guarantor Hedge Agreement Obligations shall be deemed to modify, reduce, release
or otherwise affect the liability of any Guarantor hereunder which shall,
notwithstanding any such payment (other than any payment received or collected
from such Guarantor in respect of the Borrower Obligations or the Guarantor
Hedge Agreement Obligations, respectively), remain liable for the Borrower
Obligations and the Guarantor Hedge Agreement Obligations up to the maximum
liability of such Guarantor hereunder until the Borrower Obligations and the
Guarantor Hedge Agreement Obligations are paid in full, no Letter of Credit
shall be outstanding and the Commitments are terminated.
2.2 Right of Contribution. (a) Each Subsidiary Guarantor
hereby agrees that to the extent that a Subsidiary Guarantor shall have paid
more than its proportionate share of any payment made hereunder, such Subsidiary
Guarantor shall be entitled to seek and receive contribution from and against
any other Subsidiary Guarantor hereunder which has not paid its proportionate
share of such payment.
(b) The Borrower and each Guarantor agrees that to the
extent that the Borrower or any Guarantor shall have paid more than its
proportionate share of any payment made hereunder in respect of any Guarantor
Hedge Agreement Obligation of any other Guarantor, the Borrower or such
Guarantor, as the case may be, shall be entitled to seek and receive
contribution from and against the Borrower and any other Guarantor which has not
paid its proportionate share of such payment.
(c) The Borrower's and each Guarantor's right of
contribution under this Section 2.2 shall be subject to the terms and conditions
of Section 2.3. The provisions of this Section 2.2 shall in no respect limit the
obligations and liabilities of the Borrower or any Guarantor to the
Administrative Agent and the Secured Parties, and the Borrower and each
Guarantor shall remain liable to the Administrative Agent and the Secured
Parties for the full amount guaranteed by the Borrower or such Guarantor
hereunder.
2.3 No Subrogation. Notwithstanding any payment made by
any Guarantor hereunder or any set-off or application of funds of any Guarantor
by the Administrative Agent or any Secured Party, no Guarantor shall be entitled
to be subrogated to any of the rights of the Administrative Agent or any Secured
Party against the Borrower or any other Guarantor or any collateral security or
guarantee or right of offset held by the Administrative Agent or any Secured
Party for the payment of the Borrower Obligations, nor shall any Guarantor seek
or be entitled to seek any contribution or reimbursement from the Borrower or
any other Guarantor in respect of payments made by such Guarantor hereunder,
until all amounts owing to the Administrative Agent and the Secured Parties by
the Borrower on account of the Borrower Obligations are paid in full, no Letter
of Credit shall be outstanding and the Commitments are
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terminated. If any amount shall be paid to any Guarantor on account of such
subrogation rights at any time when all of the Borrower Obligations shall not
have been paid in full, such amount shall be held by such Guarantor in trust for
the Administrative Agent and the Secured Parties, segregated from other funds of
such Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned
over to the Administrative Agent in the exact form received by such Guarantor
(duly indorsed by such Guarantor to the Administrative Agent, if required), to
be applied against the Borrower Obligations or the Guarantor Hedge Agreement
Obligations, whether matured or unmatured, in such order as the Administrative
Agent may determine.
2.4 Amendments, etc. with respect to the Borrower
Obligations. Each Guarantor shall remain obligated hereunder notwithstanding
that, without any reservation of rights against any Guarantor and without notice
to or further assent by any Guarantor, any demand for payment of any of the
Borrower Obligations or the Guarantor Hedge Agreement Obligations made by the
Administrative Agent or any Secured Party may be rescinded by the Administrative
Agent or such Secured Party and any of the Borrower Obligations or the Guarantor
Hedge Agreement Obligations continued, and the Borrower Obligations or the
Guarantor Hedge Agreement Obligations, or the liability of any other Person upon
or for any part thereof, or any collateral security or guarantee therefor or
right of offset with respect thereto, may, from time to time, in whole or in
part, be renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by the Administrative Agent or any Secured Party, and
the Credit Agreement and the other Loan Documents and any other documents
executed and delivered in connection therewith may be amended, modified,
supplemented or terminated, in whole or in part, as the Administrative Agent (or
the Required Lenders or all Lenders, as the case may be) may deem advisable from
time to time, and any collateral security, guarantee or right of offset at any
time held by the Administrative Agent or any Secured Party for the payment of
the Borrower Obligations or the Guarantor Hedge Agreement Obligations may be
sold, exchanged, waived, surrendered or released. Neither the Administrative
Agent nor any Secured Party shall have any obligation to protect, secure,
perfect or insure any Lien at any time held by it as security for the Borrower
Obligations or the Guarantor Hedge Agreement Obligations or for the guarantee
contained in this Section 2 or any property subject thereto.
2.5 Guarantee Absolute and Unconditional. (a) Each
Guarantor waives any and all notice of the creation, renewal, extension or
accrual of any of the Borrower Obligations (other than any notice with respect
to any Guarantor Hedge Agreement Obligation with respect to which such Guarantor
is a primary obligor and to which it is entitled pursuant to the applicable
Specified Hedge Agreement) and notice of or proof of reliance by the
Administrative Agent or any Secured Party upon the guarantee contained in this
Section 2 or acceptance of the guarantee contained in this Section 2; the
Borrower Obligations, and any of them, shall conclusively be deemed to have been
created, contracted or incurred, or renewed, extended, amended or waived, in
reliance upon the guarantee contained in this Section 2; and all dealings
between the Borrower and any of the Guarantors, on the one hand, and the
Administrative Agent and the Secured Parties, on the other hand, likewise shall
be conclusively presumed to have been had or consummated in reliance upon the
guarantee contained in this Section 2. Each Guarantor waives notice of
acceleration, notice of intent to accelerate, diligence, presentment, protest,
demand for payment and notice of default or nonpayment to or upon the Borrower
or any of the Guarantors with respect to the Borrower Obligations (other than
any diligence, presentment, protest, demand
10
or notice with respect to any Guarantor Hedge Agreement Obligation with respect
to which such Guarantor is a primary obligor and to which it is entitled
pursuant to the applicable Specified Hedge Agreement). Each Guarantor
understands and agrees that the guarantee contained in this Section 2 shall be
construed as a continuing, absolute and unconditional guarantee of payment
without regard to (1) the validity or enforceability of the Credit Agreement or
any other Loan Document, any of the Borrower Obligations or any other collateral
security therefor or guarantee or right of offset with respect thereto at any
time or from time to time held by the Administrative Agent or any Secured Party,
(2) any defense, set-off or counterclaim (other than a defense of payment or
performance) which may at any time be available to or be asserted by the
Borrower or any other Person against the Administrative Agent or any Secured
Party, or (3) any other circumstance whatsoever (with or without notice to or
knowledge of the Borrower or such Guarantor) which constitutes, or might be
construed to constitute, an equitable or legal discharge of the Borrower for the
Borrower Obligations, or of such Guarantor under the guarantee contained in this
Section 2, in bankruptcy or in any other instance. When making any demand
hereunder or otherwise pursuing its rights and remedies hereunder against any
Guarantor, the Administrative Agent or any Secured Party may, but shall be under
no obligation to, make a similar demand on or otherwise pursue such rights and
remedies as it may have against the Borrower, any other Guarantor or any other
Person or against any collateral security or guarantee for the Borrower
Obligations or any right of offset with respect thereto, and any failure by the
Administrative Agent or any Secured Party to make any such demand, to pursue
such other rights or remedies or to collect any payments from the Borrower, any
other Guarantor or any other Person or to realize upon any such collateral
security or guarantee or to exercise any such right of offset, or any release of
the Borrower, any other Guarantor or any other Person or any such collateral
security, guarantee or right of offset, shall not relieve any Guarantor of any
obligation or liability hereunder, and shall not impair or affect the rights and
remedies, whether express, implied or available as a matter of law, of the
Administrative Agent or any Secured Party against any Guarantor. For the
purposes hereof "demand" shall include the commencement and continuance of any
legal proceedings.
(b) The Borrower waives any and all notice of the
creation, renewal, extension or accrual of any of the Guarantor Hedge Agreement
Obligations and notice of or proof of reliance by the Administrative Agent or
any Secured Party upon the guarantee by the Borrower contained in this Section 2
or acceptance of the guarantee by the Borrower contained in this Section 2; the
Guarantor Hedge Agreement Obligations, and any of them, shall conclusively be
deemed to have been created, contracted or incurred, or renewed, extended,
amended or waived, in reliance upon the guarantee by the Borrower contained in
this Section 2; and all dealings between the Borrower and any of the Guarantors,
on the one hand, and the Administrative Agent and the Secured Parties, on the
other hand, with respect to any Guarantor Hedge Agreement Obligation likewise
shall be conclusively presumed to have been had or consummated in reliance upon
the guarantee by the Borrower contained in this Section 2. The Borrower waives
notice of acceleration, notice of intent to accelerate, diligence, presentment,
protest, demand for payment and notice of default or nonpayment to or upon the
Borrower with respect to the Guarantor Hedge Agreement Obligations. The Borrower
understands and agrees that the guarantee by the Borrower contained in this
Section 2 shall be construed as a continuing, absolute and unconditional
guarantee of payment without regard to (a) the validity or enforceability of the
Guarantor Hedge Agreement Obligations or any other collateral security therefor
or guarantee or right of offset with respect thereto at any time or from time to
time held
11
by the Administrative Agent or any Secured Party, (b) any defense, set-off or
counterclaim (other than a defense of payment or performance) which may at any
time be available to or be asserted by any Person against the Administrative
Agent or any Secured Party, or (c) any other circumstance whatsoever (with or
without notice to or knowledge of the Borrower or any Guarantor) which
constitutes, or might be construed to constitute, an equitable or legal
discharge of the applicable Guarantor for the applicable Guarantor Hedge
Agreement Obligations, or of the Borrower under its guarantee contained in this
Section 2, in bankruptcy or in any other instance. When making any demand under
this Section 2 or otherwise pursuing its rights and remedies under this Section
2 against the Borrower, the Administrative Agent or any Secured Party may, but
shall be under no obligation to, make a similar demand on or otherwise pursue
such rights and remedies as it may have against any Guarantor or any other
Person or against any collateral security or guarantee for the Guarantor Hedge
Agreement Obligations or any right of offset with respect thereto, and any
failure by the Administrative Agent or any Secured Party to make any such
demand, to pursue such other rights or remedies or to collect any payments from
any Guarantor or any other Person or to realize upon any such collateral
security or guarantee or to exercise any such right of offset, or any release of
any Guarantor or any other Person or any such collateral security, guarantee or
right of offset, shall not relieve the Borrower of any obligation or liability
under this Section 2, and shall not impair or affect the rights and remedies,
whether express, implied or available as a matter of law, of the Administrative
Agent or any Secured Party against the Borrower under this Section 2. For the
purposes hereof "demand" shall include the commencement and continuance of any
legal proceedings.
2.6 Reinstatement. The guarantee contained in this
Section 2 shall continue to be effective, or be reinstated, as the case may be,
if at any time payment, or any part thereof, of any of the Borrower Obligations
or the Guarantor Hedge Agreement Obligations is rescinded or must otherwise be
restored or returned by the Administrative Agent or any Secured Party upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Borrower or any Guarantor, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for, the
Borrower or any Guarantor or any substantial part of its property, or otherwise,
all as though such payments had not been made.
2.7 Payments. Each Guarantor hereby guarantees that
payments hereunder will be paid to the Administrative Agent without set-off or
counterclaim (i) in the case of obligations in respect of Borrower Obligations
arising under the Credit Agreement or any other Loan Document, in Dollars at the
Payment Office specified in the Credit Agreement and (ii) in the case of
obligations in respect of any Borrower Hedge Agreement Obligations or any
Guarantor Hedge Agreement Obligations, in the currency and at the place
specified in the applicable Specified Hedge Agreement.
SECTION 3. GRANT OF SECURITY INTEREST
3.1 Security Interest. Each Grantor hereby grants to the
Administrative Agent, for the ratable benefit of the Secured Parties, a security
interest in, and lien on, all of the following property now owned or at any time
hereafter acquired by such Grantor or in which such Grantor now has or at any
time in the future may acquire any right, title or interest (collectively, the
"Collateral"), as collateral security for the prompt and complete payment and
performance when due (whether at the stated maturity, by acceleration or
otherwise) of such Grantor's Obligations:
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(a) all Accounts;
(b) all Chattel Paper;
(c) all Deposit Accounts;
(d) all Documents;
(e) all Equipment;
(f) all General Intangibles;
(g) all Instruments;
(h) all Intellectual Property;
(i) all Inventory;
(j) all Investment Property;
(k) all Letter-of-Credit Rights;
(l) all Goods and other property not otherwise described
above;
(m) all books and records pertaining to the Collateral;
and
(n) to the extent not otherwise included, all Proceeds
and products of any and all of the foregoing, all
Supporting Obligations in respect of any of the
foregoing and all collateral security and guarantees
given by any Person with respect to any of the
foregoing;
provided, that the Collateral shall not include the Excluded Assets.
3.2 Confirmation of Existing Security Interest. Each
Grantor confirms, reaffirms and acknowledges the security interest granted by it
under the Existing Collateral Agreement to secure such Grantor's Obligations and
confirms and acknowledges that such security interest remains in full force and
effect.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter
into the Credit Agreement and to induce the Lenders to make their respective
extensions of credit to the Borrower thereunder, each Grantor hereby represents
and warrants to the Administrative Agent and each Lender that:
4.1 Representations in Credit Agreement. In the case of
each Guarantor, the representations and warranties set forth in Section 4 of the
Credit Agreement as they relate to such Guarantor or to the Loan Documents to
which such Guarantor is a party, each of which is hereby incorporated herein by
reference, are true and correct, and the Administrative Agent and
13
each Lender shall be entitled to rely on each of them as if they were fully set
forth herein, provided that each reference in such representations and
warranties to the Borrower's knowledge shall, for the purposes of this Section
4.1, be deemed to be a reference to such Guarantor's knowledge.
4.2 Title; No Other Liens. Except for the security
interest granted to the Administrative Agent for the ratable benefit of the
Secured Parties pursuant to this Agreement (including the security interest
previously granted under the Existing Collateral Agreement) and the other Liens
permitted to exist on the Collateral by the Credit Agreement, such Grantor owns
each item of the Collateral free and clear of any and all Liens or claims of
others. No financing statement or other public notice with respect to all or any
part of the Collateral is on file or of record in any public office, except such
as have been filed in favor of the Administrative Agent, for the ratable benefit
of the Secured Parties, pursuant to this Agreement or in connection with Liens
permitted by the Credit Agreement.
4.3 Perfected First Priority Liens. The security
interests granted pursuant to this Agreement (a) upon completion of the filings
and other actions specified on Schedule 2 (which, in the case of all filings and
other documents referred to on said Schedule, have been delivered to the
Administrative Agent in completed and duly executed form) will constitute valid
perfected security interests in all of the Collateral in favor of the
Administrative Agent, for the ratable benefit of the Secured Parties, as
collateral security for such Grantor's Obligations, enforceable in accordance
with the terms hereof against all creditors of such Grantor and any Persons
purporting to purchase any Collateral from such Grantor and (b) are prior to all
other Liens on the Collateral in existence on the date hereof except for Liens
permitted by the Credit Agreement which have priority over the Liens on the
Collateral by operation of law or contract.
4.4 Jurisdiction of Organization; Chief Executive Office.
On the date hereof, such Grantor's jurisdiction of organization, identification
number from the jurisdiction of organization (if any), and the location of such
Grantor's chief executive office or sole place of business or principal
residence, as the case may be, are specified on Schedule 3. Such Grantor has
furnished to the Administrative Agent a certified charter, certificate of
incorporation or other organization document (or has certified to the
Administrative Agent that such documents have not been amended, supplemented or
modified in any manner since February 14, 2003) and long-form good standing
certificate as of a date which is recent to the date hereof.
4.5 Inventory and Equipment. On the date hereof, the
Inventory and the Equipment (other than mobile goods) are kept at the locations
listed on Schedule 4.
4.6 Farm Products. None of the Collateral constitutes, or
is the Proceeds of, Farm Products.
4.7 Investment Property. (a) The shares of Pledged Stock
pledged by such Grantor hereunder constitute all the issued and outstanding
shares of all classes of the Capital Stock of each Issuer owned by such Grantor
(other than any Capital Stock constituting Excluded Assets) or, in the case of
Foreign Subsidiary Voting Stock, if less, 65% of the outstanding Foreign
Subsidiary Voting Stock of each relevant Issuer.
14
(b) All the shares of the Pledged Stock have been duly
and validly issued and are fully paid and nonassessable.
(c) Each of the Pledged Notes constitutes the legal,
valid and binding obligation of the obligor with respect thereto, enforceable in
accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
(d) Such Grantor is the record and beneficial owner of,
and has good and marketable title to, the Investment Property pledged by it
hereunder, free of any and all Liens or options in favor of, or claims of, any
other Person, except for Liens permitted by the Credit Agreement.
4.8 Receivables. (a) Except as listed Schedule 5, no
amount payable to such Grantor under or in connection with any Receivable is
evidenced by any Instrument or Chattel Paper which has not been delivered to the
Administrative Agent to the extent required by Section 5.2.
(b) None of the obligors on any Receivable is a
Governmental Authority, except for Receivables constituting not more than 25% of
the face amount of all Receivables.
(c) The amounts represented by such Grantor to the
Secured Parties from time to time as owing to such Grantor in respect of the
Receivables will at such times be accurate.
4.9 Intellectual Property. (a) Schedule 6 lists all
material Intellectual Property owned by such Grantor in its own name on the date
hereof.
(b) On the date hereof, all Intellectual Property of such
Grantor described on Schedule 6 is valid, subsisting, unexpired and enforceable,
has not been abandoned and does not infringe the intellectual property rights of
any other Person in any material respect.
(c) Except as set forth in Schedule 6, on the date
hereof, none of the Intellectual Property is the subject of any licensing or
franchise agreement pursuant to which such Grantor is the licensor or
franchisor.
(d) No holding, decision or judgment has been rendered by
any Governmental Authority which would limit, cancel or question the validity
of, or such Grantor's rights in, any Intellectual Property in any respect that
could reasonably be expected to have a Material Adverse Effect.
(e) No action or proceeding is pending, or, to the
knowledge of such Grantor, overtly threatened, on the date hereof (i) seeking to
limit, cancel or question the validity of any material Intellectual Property or
such Grantor's ownership interest therein, or (ii) which, if adversely
determined, would have a Material Adverse Effect.
15
SECTION 5. COVENANTS
Each Grantor covenants and agrees with the Administrative
Agent and the Secured Parties that, from and after the date of this Agreement
until the Obligations shall have been paid in full, no Letter of Credit shall be
outstanding and the Commitments shall have terminated:
5.1 Covenants in Credit Agreement. In the case of each
Guarantor, such Guarantor shall take, or shall refrain from taking, as the case
may be, each action that is necessary to be taken or not taken, as the case may
be, so that no Default or Event of Default is caused by the failure to take such
action or to refrain from taking such action by such Guarantor or any of its
Subsidiaries.
5.2 Delivery of Instruments and Chattel Paper. If any
amount payable under or in connection with any of the Collateral shall be or
become evidenced by any Instrument, Certificated Security or Chattel Paper, such
Instrument, Certificated Security or Chattel Paper shall be immediately
delivered to the Administrative Agent, duly indorsed in a manner satisfactory to
the Administrative Agent, to be held as Collateral pursuant to this Agreement;
provided, that the Grantors shall not be obligated to deliver to the
Administrative Agent any Instruments or Chattel Paper held by any Grantor at any
time to the extent that the aggregate face amount of all such Instruments and
Chattel Paper held by all Grantors at such time does not exceed $100,000.
5.3 Maintenance of Insurance. (a) Such Grantor will
maintain, with financially sound and reputable companies, insurance policies (i)
insuring the Inventory and Equipment against loss by fire, explosion, theft and
such other casualties as may be reasonably satisfactory to the Administrative
Agent and (ii) insuring such Grantor, the Administrative Agent and the Secured
Parties against liability for personal injury and property damage relating to
such Inventory and Equipment, such policies to be in such form and amounts and
having such coverage as the Borrower deems adequate for its business.
(b) All such insurance shall (i) provide that no
cancellation, material reduction in amount or material change in coverage
thereof shall be effective until at least 30 days (10 days in the case of
failure to pay the premium) after receipt by the Administrative Agent of written
notice thereof and (ii) name the Administrative Agent as an additional insured
party or loss payee.
(c) The Borrower shall deliver to the Administrative
Agent a report of a reputable insurance broker with respect to such insurance
substantially concurrently with the delivery by the Borrower to the
Administrative Agent of its audited financial statements for each fiscal year
and such supplemental reports with respect thereto as the Administrative Agent
may from time to time reasonably request.
5.4 Payment of Obligations. Such Grantor will pay and
discharge or otherwise satisfy at or before maturity or before they become
delinquent, as the case may be, all taxes, assessments and governmental charges
or levies imposed upon the Collateral or in respect of income or profits
therefrom, as well as all claims of any kind (including, without limitation,
claims for labor, materials and supplies) against or with respect to the
Collateral, except that no
16
such charge need be paid if the amount or validity thereof is currently being
contested in good faith by appropriate proceedings, reserves in conformity with
GAAP with respect thereto have been provided on the books of such Grantor and
such proceedings could not reasonably be expected to result in the sale,
forfeiture or loss of any material portion of the Collateral or any interest
therein.
5.5 Maintenance of Perfected Security Interest; Further
Documentation. (a) Such Grantor shall maintain the security interest created by
this Agreement as a perfected security interest having at least the priority
described in Section 4.3 and shall defend such security interest against the
claims and demands of all Persons whomsoever except as permitted by Section 4.2.
(b) Such Grantor will furnish to the Administrative Agent
and the Lenders from time to time statements and schedules further identifying
and describing the assets and property of such Grantor and such other reports in
connection with the Collateral as the Administrative Agent may reasonably
request, all in reasonable detail.
(c) At any time and from time to time, upon the written
request of the Administrative Agent, and at the sole expense of such Grantor,
such Grantor will promptly and duly execute and deliver, and have recorded, such
further instruments and documents and take such further actions as the
Administrative Agent may reasonably request for the purpose of obtaining or
preserving the full benefits of this Agreement and of the rights and powers
herein granted, including, without limitation, (i) the filing of any financing
or continuation statements under the Uniform Commercial Code (or other similar
laws) in effect in any jurisdiction with respect to the security interests
created hereby and (ii) in the case of Investment Property, Deposit Accounts,
Letter-of-Credit Rights and any other relevant Collateral, taking any actions
necessary to enable the Administrative Agent to obtain "control" (within the
meaning of the applicable Uniform Commercial Code) with respect thereto.
5.6 Changes in Locations, Name, etc. Such Grantor will
not, except upon 15 days' prior written notice to the Administrative Agent and
delivery to the Administrative Agent of all additional executed financing
statements and other documents reasonably requested by the Administrative Agent
to maintain the validity, perfection and priority of the security interests
provided for herein:
(i) change its jurisdiction of organization from that
referred to in Section 4.3; or
(ii) change its name.
5.7 Notices. Such Grantor will advise the Administrative
Agent and the Lenders promptly, in reasonable detail, of:
(a) any Lien (other than security interests created
hereby or Liens permitted under the Credit Agreement) on any of the Collateral
which would adversely affect the ability of the Administrative Agent to exercise
any of its remedies hereunder; and
17
(b) the occurrence of any other event which could
reasonably be expected to have a material adverse effect on the aggregate value
of the Collateral or on the security interests created hereby.
5.8 Investment Property. (a) If such Grantor shall become
entitled to receive or shall receive any certificate (including, without
limitation, any certificate representing a dividend or a distribution in
connection with any reclassification, increase or reduction of capital or any
certificate issued in connection with any reorganization), option or rights in
respect of the Capital Stock of any Issuer, whether in addition to, in
substitution of, as a conversion of, or in exchange for, any shares of the
Pledged Stock, or otherwise in respect thereof, such Grantor shall accept the
same as the agent of the Administrative Agent and the Secured Parties, hold the
same in trust for the Administrative Agent and the Secured Parties and deliver
the same forthwith to the Administrative Agent in the exact form received, duly
indorsed by such Grantor to the Administrative Agent, if required, together with
an undated stock power covering such certificate duly executed in blank by such
Grantor, to be held by the Administrative Agent, subject to the terms hereof, as
additional collateral security for the Obligations. Any sums paid upon or in
respect of the Investment Property upon the liquidation or dissolution of any
Issuer shall be paid over to the Administrative Agent to be held by it hereunder
as additional collateral security for the Obligations, and in case any
distribution of capital shall be made on or in respect of the Investment
Property, or any property shall be distributed upon or with respect to the
Investment Property pursuant to the recapitalization or reclassification of the
capital of any Issuer or pursuant to the reorganization thereof, the property so
distributed shall, unless otherwise subject to a perfected security interest in
favor of the Administrative Agent, be delivered to the Administrative Agent to
be held by it hereunder as additional collateral security for the Obligations.
If any sums of money or property so paid or distributed in respect of the
Investment Property shall be received by such Grantor, such Grantor shall, until
such money or property is paid or delivered to the Administrative Agent, hold
such money or property in trust for the Secured Parties, segregated from other
funds of such Grantor, as additional collateral security for the Obligations.
Notwithstanding the foregoing, the Grantors shall not be required to pay over to
the Administrative Agent or deliver to the Administrative Agent as Collateral
any proceeds of any liquidation or dissolution of any Issuer, or any
distribution of capital or property in respect of any Investment Property, to
the extent that (i) such liquidation, dissolution or distribution, if treated as
a Disposition of the relevant Issuer, would be permitted by the Credit Agreement
and (ii) the proceeds thereof are applied as required or permitted by the Credit
Agreement.
(b) Without the prior written consent of the
Administrative Agent, such Grantor will not (i) vote to enable, or take any
other action to permit, any Issuer to issue any stock or other equity securities
of any nature or to issue any other securities convertible into or granting the
right to purchase or exchange for any stock or other equity securities of any
nature of any Issuer, unless such securities are delivered to the Administrative
Agent, concurrently with the issuance thereof, to be held by the Administrative
Agent as Collateral, (ii) sell, assign, transfer, exchange, or otherwise dispose
of, or grant any option with respect to, the Investment Property or Proceeds
thereof (except pursuant to a transaction permitted by the Credit Agreement),
(iii) create, incur or permit to exist any Lien or option in favor of, or any
claim of any Person with respect to, any of the Investment Property or Proceeds
thereof, or any interest therein, except for the Liens permitted by the Credit
Agreement or (iv) enter into any agreement or undertaking restricting the right
or ability of such Grantor or the Administrative Agent to sell,
18
assign or transfer any of the Pledged Securities or Proceeds thereof (except to
the extent permitted by Section 7.14 of the Credit Agreement).
(c) In the case of each Grantor which is an Issuer, such
Issuer agrees that (i) it will be bound by the terms of this Agreement relating
to the Pledged Securities issued by it and will comply with such terms insofar
as such terms are applicable to it, (ii) it will notify the Administrative Agent
promptly in writing of the occurrence of any of the events described in Section
5.8(a) with respect to the Pledged Securities issued by it and (iii) the terms
of Sections 6.3(c) and 6.7 shall apply to it, mutatis mutandis, with respect to
all actions that may be required of it pursuant to Section 6.3(c) and 6.7 with
respect to the Pledged Securities issued by it.
(d) Each Issuer that is a partnership or a limited
liability company (i) confirms that none of the terms of any equity interest
issued by it provides that such equity interest is a "security" within the
meaning of Sections 8-102 and 8-103 of the New York UCC (a "Security"), (ii)
agrees that it will take no action to cause or permit any such equity interest
to become a Security, (iii) agrees that it will not issue any certificate
representing any such equity interest and (iv) agrees that if, notwithstanding
the foregoing, any such equity interest shall be or become a Security, such
Issuer will (and the Grantor that holds such equity interest hereby instructs
such Issuer to) comply with instructions originated by the Administrative Agent
without further consent by such Grantor.
(e) Each Grantor holding Capital Stock of Laredo Theatre,
Ltd. or Greeley, Ltd. agrees to use commercially reasonable efforts to obtain
the required consent of the other partners of Laredo Theatre, Ltd. or Greeley,
Ltd., as the case may be, to the pledge of such Capital Stock under this
Agreement.
5.9 Receivables. (a) Other than in the ordinary course of
business, such Grantor will not (i) grant any extension of the time of payment
of any Receivable, (ii) compromise or settle any Receivable for less than the
full amount thereof, (iii) release, wholly or partially, any Person liable for
the payment of any Receivable, (iv) allow any credit or discount whatsoever on
any Receivable or (v) amend, supplement or modify any Receivable in any manner
that could adversely affect the value thereof.
(b) Such Grantor will deliver to the Administrative Agent
a copy of each material demand, notice or document received by it that questions
or calls into doubt the validity or enforceability of more than 10% of the
aggregate amount of the then outstanding Receivables.
5.10 Intellectual Property. (a) Such Grantor (either
itself or through licensees) will (i) unless a Responsible Officer determines
that is it is not in the best interest of such Grantor, continue to use each
material Trademark in order to maintain such Trademark in full force free from
any claim of abandonment for non-use, (ii) use such Trademark with the
appropriate notice of registration and all other notices and legends required by
applicable Requirements of Law, (iii) not adopt or use any xxxx which is
confusingly similar or a colorable imitation of such Trademark unless the
Administrative Agent, for the ratable benefit of the Secured Parties, shall
obtain a perfected security interest in such xxxx pursuant to this Agreement,
and (iv) unless a Responsible Officer determines that is it is not in the best
interest of
19
such Grantor, not (and not permit any licensee or sublicensee thereof to) do any
act or knowingly omit to do any act whereby such Trademark may become
invalidated or impaired in any way.
(b) Unless a Responsible Officer determines that is it is
not in the best interest of such Grantor, such Grantor (either itself or through
licensees) will not do any act, or omit to do any act, whereby any material
Patent may become forfeited, abandoned or dedicated to the public.
(c) Unless a Responsible Officer determines that is it is
not in the best interest of such Grantor, such Grantor (either itself or through
licensees) (i) will employ each material Copyright and (ii) will not (and will
not permit any licensee or sublicensee thereof to) do any act or knowingly omit
to do any act whereby any material portion of the Copyrights may become
invalidated or otherwise impaired. Unless a Responsible Officer determines that
is it is not in the best interest of such Grantor, such Grantor will not (either
itself or through licensees) do any act whereby any material portion of the
Copyrights may fall into the public domain.
(d) Such Grantor (either itself or through licensees)
will not do any act that knowingly uses any material Intellectual Property to
infringe the intellectual property rights of any other Person.
(e) Such Grantor will notify the Administrative Agent
immediately if it knows, or has reason to know, that any application or
registration relating to any material Intellectual Property may become
forfeited, abandoned or dedicated to the public, or of any adverse determination
or development (including, without limitation, the institution of, or any such
determination or development in, any proceeding in the United States Patent and
Trademark Office, the United States Copyright Office or any court or tribunal in
any country) regarding such Grantor's ownership of, or the validity of, any
material Intellectual Property or such Grantor's right to register the same or
to own and maintain the same.
(f) Whenever such Grantor, either by itself or through
any agent, employee, licensee or designee, shall file an application for the
registration of any Intellectual Property with the United States Patent and
Trademark Office, the United States Copyright Office or any similar office or
agency in any other country or any political subdivision thereof, such Grantor
shall report such filing to the Administrative Agent within 20 Business Days
after the last day of the fiscal quarter in which such filing occurs. Upon
request of the Administrative Agent, such Grantor shall execute and deliver, and
have recorded, any and all agreements, instruments, documents, and papers as the
Administrative Agent may reasonably request to evidence the Administrative
Agent's and the Secured Parties' security interest in any Copyright, Patent or
Trademark and the goodwill and General Intangibles of such Grantor relating
thereto or represented thereby.
(g) Such Grantor will take all reasonable and necessary
steps, including, without limitation, in any proceeding before the United States
Patent and Trademark Office, the United States Copyright Office or any similar
office or agency or any political subdivision thereof, to maintain and pursue
each application relating to any material Intellectual Property (and to obtain
the relevant registration) and to maintain each registration of the material
Intellectual Property, including, without limitation, filing of applications for
renewal, affidavits of use and affidavits of incontestability.
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(h) In the event that any material Intellectual Property
is infringed, misappropriated or diluted by a third party, such Grantor shall
(i) take such actions as such Grantor shall reasonably deem appropriate under
the circumstances to protect such Intellectual Property and (ii) if such
Intellectual Property is of material economic value, promptly notify the
Administrative Agent after it learns thereof and, if reasonable or appropriate
under the circumstances in the judgment of a Responsible Officer of such
Grantor, xxx for infringement, misappropriation or dilution, to seek injunctive
relief where appropriate and to recover any and all damages for such
infringement, misappropriation or dilution.
SECTION 6. REMEDIAL PROVISIONS
6.1 Certain Matters Relating to Receivables. (a) The
Administrative Agent shall have the right, at any time after the occurrence and
during the continuance of an Event of Default, to make test verifications of the
Receivables in any manner and through any medium that it reasonably considers
advisable, and each Grantor shall furnish all such assistance and information as
the Administrative Agent may reasonably require in connection with such test
verifications. At any time and from time to time after the occurrence and during
the continuance of an Event of Default, upon the Administrative Agent's request
and at the expense of the relevant Grantor, such Grantor shall cause independent
public accountants or others satisfactory to the Administrative Agent to furnish
to the Administrative Agent reports showing reconciliations, aging and test
verifications of, and trial balances for, the Receivables.
(b) The Administrative Agent hereby authorizes each
Grantor to collect such Grantor's Receivables, subject to the Administrative
Agent's direction and control after the occurrence and during the continuance of
an Event of Default, and the Administrative Agent may curtail or terminate
during the continuance of such Event of Default said authority at any time after
the occurrence and during the continuance of an Event of Default. If required by
the Administrative Agent at any time after the occurrence and during the
continuance of an Event of Default, any payments of Receivables, when collected
by any Grantor, (i) shall be forthwith (and, in any event, within two Business
Days) deposited by such Grantor in the exact form received, duly indorsed by
such Grantor to the Administrative Agent if required, in a Collateral Account
maintained under the sole dominion and control of the Administrative Agent,
subject to withdrawal by the Administrative Agent for the account of the Secured
Parties only as provided in Section 6.5, and (ii) until so turned over, shall be
held by such Grantor in trust for the Administrative Agent and the Secured
Parties, segregated from other funds of such Grantor. Each such deposit of
Proceeds of Receivables shall be accompanied by a report identifying in
reasonable detail the nature and source of the payments included in the deposit.
(c) At the Administrative Agent's request, each Grantor
shall deliver to the Administrative Agent all original and other documents
evidencing, and relating to, the agreements and transactions which gave rise to
the Receivables, including, without limitation, all original orders, invoices
and shipping receipts.
(d) At any time after the occurrence and during the
continuance of an Event of Default, each Grantor will cooperate with the
Administrative Agent to establish a system of lockbox accounts, under the sole
dominion and control of the Administrative Agent, into which all Receivables
shall be paid and from which all collected funds will be transferred to a
Collateral Account.
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6.2 Communications with Obligors; Grantors Remain Liable.
(a) The Administrative Agent in its own name or in the name of others may at any
time after the occurrence and during the continuance of an Event of Default
communicate with obligors under the Receivables to verify with them to the
Administrative Agent's satisfaction the existence, amount and terms of any
Receivables.
(b) Upon the request of the Administrative Agent at any
time after the occurrence and during the continuance of an Event of Default,
each Grantor shall notify obligors on the Receivables that the Receivables have
been assigned to the Administrative Agent for the ratable benefit of the Secured
Parties and that payments in respect thereof shall be made directly to the
Administrative Agent.
(c) Anything herein to the contrary notwithstanding, each
Grantor shall remain liable under each of the Receivables (or any agreement
giving rise thereto) to observe and perform all the conditions and obligations
to be observed and performed by it thereunder, all in accordance with the terms
of any agreement giving rise thereto. Neither the Administrative Agent nor any
Secured Party shall have any obligation or liability under any Receivable (or
any agreement giving rise thereto) by reason of or arising out of this Agreement
or the receipt by the Administrative Agent or any Secured Party of any payment
relating thereto, nor shall the Administrative Agent or any Secured Party be
obligated in any manner to perform any of the obligations of any Grantor under
or pursuant to any Receivable (or any agreement giving rise thereto), to make
any payment, to make any inquiry as to the nature or the sufficiency of any
payment received by it or as to the sufficiency of any performance by any party
thereunder, to present or file any claim, to take any action to enforce any
performance or to collect the payment of any amounts which may have been
assigned to it or to which it may be entitled at any time or times.
6.3 Pledged Stock. (a) Unless an Event of Default shall
have occurred and be continuing and the Administrative Agent shall have given
notice to the relevant Grantor of the Administrative Agent's intent to exercise
its corresponding rights pursuant to Section 6.3(b), each Grantor shall be
permitted to receive all cash dividends paid in respect of the Pledged Stock and
all payments made in respect of the Pledged Notes, in each case paid in the
normal course of business of the relevant Issuer, to the extent permitted in the
Credit Agreement, and to exercise all voting and corporate rights with respect
to the Pledged Securities; provided, however, that no vote shall be cast or
corporate right exercised or other action taken which, in the Administrative
Agent's reasonable judgment as evidenced by written notice to such Grantor,
would impair the Collateral or which would be inconsistent with or result in any
violation of any provision of the Credit Agreement, this Agreement or any other
Loan Document.
(b) If an Event of Default shall occur and be continuing
and the Administrative Agent shall give notice of its intent to exercise such
rights to the relevant Grantor or Grantors, (i) the Administrative Agent shall
have the right to receive any and all cash dividends, payments or other Proceeds
paid in respect of the Pledged Securities and make application thereof to the
Obligations in the order set forth in Section 6.5, and (ii) any or all of the
Pledged Securities shall be registered in the name of the Administrative Agent
or its nominee, and the Administrative Agent or its nominee may thereafter
exercise (x) all voting, corporate and other rights pertaining to such Pledged
Securities at any meeting of shareholders of the relevant Issuer or Issuers or
otherwise and (y) any and all rights of conversion, exchange and
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subscription and any other rights, privileges or options pertaining to such
Pledged Securities as if it were the absolute owner thereof (including, without
limitation, the right to exchange at its discretion any and all of the Pledged
Securities upon the merger, consolidation, reorganization, recapitalization or
other fundamental change in the corporate structure of any Issuer, or upon the
exercise by any Grantor or the Administrative Agent of any right, privilege or
option pertaining to such Pledged Securities, and in connection therewith, the
right to deposit and deliver any and all of the Pledged Securities with any
committee, depositary, transfer agent, registrar or other designated agency upon
such terms and conditions as the Administrative Agent may determine), all
without liability except to account for property actually received by it, but
the Administrative Agent shall have no duty to any Grantor to exercise any such
right, privilege or option and shall not be responsible for any failure to do so
or delay in so doing.
(c) Each Grantor hereby authorizes and instructs each
Issuer of any Pledged Securities pledged by such Grantor hereunder to (i) comply
with any instruction received by it from the Administrative Agent in writing
that (x) states that an Event of Default has occurred and is continuing and (y)
is otherwise in accordance with the terms of this Agreement, without any other
or further instructions from such Grantor, and each Grantor agrees that each
Issuer shall be fully protected in so complying, and (ii) unless otherwise
expressly permitted hereby, pay any dividends or other payments with respect to
the Pledged Securities directly to the Administrative Agent.
6.4 Proceeds to be Turned Over To Administrative Agent.
In addition to the rights of the Administrative Agent and the Secured Parties
specified in Section 6.1 with respect to payments of Receivables, if an Event of
Default shall occur and be continuing, all Proceeds received by any Grantor
consisting of cash, checks and Instruments shall be held by such Grantor in
trust for the Administrative Agent and the Secured Parties, segregated from
other funds of such Grantor, and shall, forthwith upon receipt by such Grantor,
be turned over to the Administrative Agent in the exact form received by such
Grantor (duly indorsed by such Grantor to the Administrative Agent, if
required). All Proceeds received by the Administrative Agent hereunder shall be
held by the Administrative Agent in a Collateral Account maintained under its
sole dominion and control. All Proceeds while held by the Administrative Agent
in a Collateral Account (or by such Grantor in trust for the Administrative
Agent and the Secured Parties) shall continue to be held as collateral security
for all the Obligations and shall not constitute payment thereof until applied
as provided in Section 6.5.
6.5 Application of Proceeds. At such intervals as may be
agreed upon by the Borrower and the Administrative Agent, or, if an Event of
Default shall have occurred and be continuing, at any time at the Administrative
Agent's election, the Administrative Agent may apply all or any part of Proceeds
constituting Collateral, whether or not held in any Collateral Account, and any
proceeds of the guarantee set forth in Section 2, in payment of the Obligations
in the following order:
First, to pay incurred and unpaid fees and expenses of the
Administrative Agent under the Loan Documents;
Second, to the Administrative Agent, for application by it
towards payment of amounts then due and owing and remaining unpaid in
respect of the Obligations, pro rata
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among the Secured Parties according to the amounts of the Obligations
then due and owing and remaining unpaid to the Secured Parties;
Third, to the Administrative Agent, for application by it
towards prepayment of the Obligations, pro rata among the Secured
Parties according to the amounts of the Obligations then held by the
Secured Parties; and
Fourth, any balance of such Proceeds remaining after the
Obligations shall have been paid in full, no Letters of Credit shall be
outstanding and the Commitments shall have terminated, shall be paid
over to the Borrower or to whomsoever may be lawfully entitled to
receive the same.
Notwithstanding the foregoing, money or funds received from Collateral shall be
promptly applied to reduce the Obligations to the extent required by Section
9-207 of the New York UCC.
6.6 Code and Other Remedies. If an Event of Default shall
occur and be continuing, the Administrative Agent, on behalf of the Secured
Parties, may exercise, in addition to all other rights and remedies granted to
them in this Agreement and in any other instrument or agreement securing,
evidencing or relating to the Obligations, all rights and remedies of a secured
party under the New York UCC or any other applicable law. Without limiting the
generality of the foregoing, the Administrative Agent, without demand of
performance or other demand, presentment, protest, advertisement or notice of
any kind (except any notice required by law referred to below) to or upon any
Grantor or any other Person (all and each of which demands, defenses,
advertisements and notices are hereby waived), may in such circumstances
forthwith collect, receive, appropriate and realize upon the Collateral, or any
part thereof, and/or may forthwith sell, lease, assign, give option or options
to purchase, or otherwise dispose of and deliver the Collateral or any part
thereof (or contract to do any of the foregoing), in one or more parcels at
public or private sale or sales, at any exchange, broker's board or office of
the Administrative Agent or any Secured Party or elsewhere upon such terms and
conditions as it may deem advisable and at such prices as it may deem best, for
cash or on credit or for future delivery without assumption of any credit risk.
The Administrative Agent or any Secured Party shall have the right upon any such
public sale or sales, and, to the extent permitted by law, upon any such private
sale or sales, to purchase the whole or any part of the Collateral so sold, free
of any right or equity of redemption in any Grantor, which right or equity is
hereby waived and released. Each Grantor further agrees, at the Administrative
Agent's request, to assemble the Collateral and make it available to the
Administrative Agent at places which the Administrative Agent shall reasonably
select, whether at such Grantor's premises or elsewhere. The Administrative
Agent shall apply the net proceeds of any action taken by it pursuant to this
Section 6.6, after deducting all reasonable costs and expenses of every kind
incurred in connection therewith or incidental to the care or safekeeping of any
of the Collateral or in any way relating to the Collateral or the rights of the
Administrative Agent and the Secured Parties hereunder, including, without
limitation, reasonable attorneys' fees and disbursements, to the payment in
whole or in part of the Obligations, in such order as the Administrative Agent
may elect, and only after such application and after the payment by the
Administrative Agent of any other amount required by any provision of law,
including, without limitation, Section 9-615(a)(3) of the New York UCC, need the
Administrative Agent account for the surplus, if any, to any Grantor. To the
extent permitted by applicable law, each Grantor waives all claims, damages and
demands it may acquire against the Administrative Agent or any Secured Party
arising out of
24
the exercise by them of any rights hereunder. If any notice of a proposed sale
or other disposition of Collateral shall be required by law, such notice shall
be deemed reasonable and proper if given at least 10 days before such sale or
other disposition.
6.7 Registration Rights. (a) Each Grantor recognizes that
the Administrative Agent may be unable to effect a public sale of any or all the
Pledged Stock, by reason of certain prohibitions contained in the Securities Act
and applicable state securities laws or otherwise, and may be compelled to
resort to one or more private sales thereof to a restricted group of purchasers
which will be obliged to agree, among other things, to acquire such securities
for their own account for investment and not with a view to the distribution or
resale thereof. Each Grantor acknowledges and agrees that any such private sale
may result in prices and other terms less favorable than if such sale were a
public sale and, notwithstanding such circumstances, agrees that any such
private sale shall be deemed to have been made in a commercially reasonable
manner. The Administrative Agent shall be under no obligation to delay a sale of
any of the Pledged Stock for the period of time necessary to permit the Issuer
thereof to register such securities for public sale under the Securities Act, or
under applicable state securities laws, even if such Issuer would agree to do
so.
(b) Each Grantor agrees to use its commercially
reasonable efforts to do or cause to be done all such acts as may be necessary
to make such sale or sales of all or any portion of the Pledged Stock pursuant
to this Section 6.7 valid and binding and in compliance with any and all other
applicable Requirements of Law other than the filing of registration,
qualification or similar statements under the Securities Act or applicable state
securities laws. Each Grantor further agrees that a breach of any of the
covenants contained in this Section 6.7 will cause irreparable injury to the
Administrative Agent and the Secured Parties, that the Administrative Agent and
the Secured Parties have no adequate remedy at law in respect of such breach
and, as a consequence, that each and every covenant contained in this Section
6.7 shall be specifically enforceable against such Grantor, and such Grantor
hereby waives and agrees not to assert any defenses against an action for
specific performance of such covenants except for a defense that no Event of
Default has occurred under the Credit Agreement.
6.8 Deficiency. Each Grantor shall remain liable for any
deficiency if the proceeds of any sale or other disposition of the Collateral
are insufficient to pay its Obligations and the fees and disbursements of any
attorneys employed by the Administrative Agent or any Secured Party to collect
such deficiency.
SECTION 7. THE ADMINISTRATIVE AGENT
7.1 Administrative Agent's Appointment as
Attorney-in-Fact, etc. (a) Each Grantor hereby irrevocably constitutes and
appoints the Administrative Agent and any officer or agent thereof, with full
power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of such Grantor and in
the name of such Grantor or in its own name, for the purpose of carrying out the
terms of this Agreement, to take any and all appropriate action and to execute
any and all documents and instruments which may be necessary or desirable to
accomplish the purposes of this Agreement, and, without limiting the generality
of the foregoing, each Grantor hereby gives the Administrative Agent the power
and right, on behalf of such Grantor, without notice to or assent by such
Grantor, to do any or all of the following:
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(i) in the name of such Grantor or its own name, or
otherwise, take possession of and indorse and collect any checks,
drafts, notes, acceptances or other instruments for the payment of
moneys due under any Receivable or with respect to any other Collateral
and file any claim or take any other action or proceeding in any court
of law or equity or otherwise deemed appropriate by the Administrative
Agent for the purpose of collecting any and all such moneys due under
any Receivable or with respect to any other Collateral whenever
payable;
(ii) in the case of any Intellectual Property, execute and
deliver, and have recorded, any and all agreements, instruments,
documents and papers as the Administrative Agent may request to
evidence the Administrative Agent's and the Secured Parties' security
interest in such Intellectual Property and the goodwill and general
intangibles of such Grantor relating thereto or represented thereby;
(iii) pay or discharge taxes and Liens levied or placed on
or threatened against the Collateral, effect any repairs or any
insurance called for by the terms of this Agreement and pay all or any
part of the premiums therefor and the costs thereof;
(iv) execute, in connection with any sale provided for in
Section 6.6 or 6.7, any indorsements, assignments or other instruments
of conveyance or transfer with respect to the Collateral; and
(v) (1) direct any party liable for any payment under any
of the Collateral to make payment of any and all moneys due or to
become due thereunder directly to the Administrative Agent or as the
Administrative Agent shall direct; (2) ask or demand for, collect, and
receive payment of and receipt for, any and all moneys, claims and
other amounts due or to become due at any time in respect of or arising
out of any Collateral; (3) sign and indorse any invoices, freight or
express bills, bills of lading, storage or warehouse receipts, drafts
against debtors, assignments, verifications, notices and other
documents in connection with any of the Collateral; (4) commence and
prosecute any suits, actions or proceedings at law or in equity in any
court of competent jurisdiction to collect the Collateral or any
portion thereof and to enforce any other right in respect of any
Collateral; (5) defend any suit, action or proceeding brought against
such Grantor with respect to any Collateral; (6) settle, compromise or
adjust any such suit, action or proceeding and, in connection
therewith, give such discharges or releases as the Administrative Agent
may deem appropriate; (7) assign any Copyright, Patent or Trademark
(along with the goodwill of the business to which any such Copyright,
Patent or Trademark pertains), throughout the world for such term or
terms, on such conditions, and in such manner, as the Administrative
Agent shall in its sole discretion determine; and (8) generally, sell,
transfer, pledge and make any agreement with respect to or otherwise
deal with any of the Collateral as fully and completely as though the
Administrative Agent were the absolute owner thereof for all purposes,
and do, at the Administrative Agent's option and such Grantor's
expense, at any time, or from time to time, all acts and things which
the Administrative Agent deems necessary to protect, preserve or
realize upon the Collateral and the Administrative Agent's and the
Secured Parties' security interests therein and to effect the intent of
this Agreement, all as fully and effectively as such Grantor might do.
26
Anything in this Section 7.1(a) to the contrary
notwithstanding, the Administrative Agent agrees that it will not exercise any
rights under the power of attorney provided for in this Section 7.1(a) unless an
Event of Default shall have occurred and be continuing.
(b) If any Grantor fails to perform or comply with any of
its agreements contained herein, the Administrative Agent, at its option, but
without any obligation so to do, may perform or comply, or otherwise cause
performance or compliance, with such agreement.
(c) The expenses of the Administrative Agent incurred in
connection with actions undertaken as provided in this Section 7.1, together
with interest thereon at a rate per annum equal to the rate per annum at which
interest would then be payable on past due Revolving Credit Loans that are Base
Rate Loans under the Credit Agreement, from the date of payment by the
Administrative Agent to the date reimbursed by the relevant Grantor, shall be
payable by such Grantor to the Administrative Agent on demand.
(d) Each Grantor hereby ratifies all that said attorneys
shall lawfully do or cause to be done by virtue hereof. All powers,
authorizations and agencies contained in this Agreement are coupled with an
interest and are irrevocable until this Agreement is terminated and the security
interests created hereby are released.
7.2 Duty of Administrative Agent. The Administrative
Agent's sole duty with respect to the custody, safekeeping and physical
preservation of the Collateral in its possession, under Section 9-207 of the New
York UCC or otherwise, shall be to deal with it in the same manner as the
Administrative Agent deals with similar property for its own account. Neither
the Administrative Agent, any Secured Party nor any of their respective
officers, directors, employees or agents shall be liable for failure to demand,
collect or realize upon any of the Collateral or for any delay in doing so or
shall be under any obligation to sell or otherwise dispose of any Collateral
upon the request of any Grantor or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof. The powers
conferred on the Administrative Agent and the Secured Parties hereunder are
solely to protect the Administrative Agent's and the Secured Parties' interests
in the Collateral and shall not impose any duty upon the Administrative Agent or
any Secured Party to exercise any such powers. The Administrative Agent and the
Secured Parties shall be accountable only for amounts that they actually receive
as a result of the exercise of such powers, and neither they nor any of their
officers, directors, employees or agents shall be responsible to any Grantor for
any act or failure to act hereunder, except for their own gross negligence, bad
faith or willful misconduct.
7.3 Execution of Financing Statements. Pursuant to any
applicable law, each Grantor authorizes the Administrative Agent to file or
record financing statements and other filing or recording documents or
instruments with respect to the Collateral without the signature of such Grantor
in such form and in such offices as the Administrative Agent determines
appropriate to perfect the security interests of the Administrative Agent under
this Agreement. Each Grantor authorizes the Administrative Agent to use the
collateral description "all personal property other than the Excluded Assets (as
defined in the Amended and Restated Guarantee and Collateral Agreement, dated as
of April 2, 2004, made by the debtor and each of the other signatories thereto,
in favor of Xxxxxx Commercial Paper Inc., as Administrative Agent, as such may
be amended from time to time)" in any such financing statements filed on or
after the
27
Effective Date. Each Grantor hereby ratifies and authorizes the filing by the
Administrative Agent of any financing statement with respect to the Collateral
made prior to the date hereof.
7.4 Authority of Administrative Agent. Each Grantor
acknowledges that the rights and responsibilities of the Administrative Agent
under this Agreement with respect to any action taken by the Administrative
Agent or the exercise or non-exercise by the Administrative Agent of any option,
voting right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement shall, as between the Administrative
Agent and the Secured Parties, be governed by the Credit Agreement and by such
other agreements with respect thereto as may exist from time to time among them,
but, as between the Administrative Agent and the Grantors, the Administrative
Agent shall be conclusively presumed to be acting as agent for the Secured
Parties with full and valid authority so to act or refrain from acting, and no
Grantor shall be under any obligation, or entitlement, to make any inquiry
respecting such authority.
SECTION 8. MISCELLANEOUS
8.1 Amendments in Writing. None of the terms or
provisions of this Agreement may be waived, amended, supplemented or otherwise
modified except in accordance with Section 10.1 of the Credit Agreement.
8.2 Notices. All notices, requests and demands to or upon
the Administrative Agent or any Grantor hereunder shall be effected in the
manner provided for in Section 10.2 of the Credit Agreement; provided that any
such notice, request or demand to or upon any Guarantor shall be addressed to
such Guarantor care of the Borrower at the address specified in Section 10.2 of
the Credit Agreement.
8.3 No Waiver by Course of Conduct; Cumulative Remedies.
Neither the Administrative Agent nor any Secured Party shall by any act (except
by a written instrument pursuant to Section 8.1), delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any Default or Event of Default. No failure to exercise, nor any
delay in exercising, on the part of the Administrative Agent or any Secured
Party, any right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by the Administrative Agent or
any Secured Party of any right or remedy hereunder on any one occasion shall not
be construed as a bar to any right or remedy which the Administrative Agent or
such Secured Party would otherwise have on any future occasion. The rights and
remedies herein provided are cumulative, may be exercised singly or concurrently
and are not exclusive of any other rights or remedies provided by law.
8.4 Enforcement Expenses; Indemnification. (a) Subject to
Section 10.5 of the Credit Agreement, each Guarantor agrees to pay, or reimburse
each Secured Party and the Administrative Agent for, all its costs and expenses
incurred in collecting against such Guarantor under the guarantee contained in
Section 2 or otherwise enforcing or preserving any rights under this Agreement
and the other Loan Documents to which such Guarantor is a party, including,
without limitation, the fees and disbursements of counsel (including the
allocated fees and expenses of in-house counsel) to each Secured Party and of
counsel to the Administrative Agent.
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(b) Each Guarantor agrees to pay, and to save the
Administrative Agent and the Secured Parties harmless from, any and all
liabilities with respect to, or resulting from any delay in paying, any and all
stamp, excise, sales or other taxes which may be payable or determined to be
payable with respect to any of the Collateral or in connection with any of the
transactions contemplated by this Agreement.
(c) Each Guarantor agrees to pay, and to save the
Administrative Agent and the Secured Parties harmless from, any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever with respect
to the execution, delivery, enforcement, performance and administration of this
Agreement to the extent the Borrower would be required to do so pursuant to
Section 10.5 of the Credit Agreement.
(d) The agreements in this Section shall survive
repayment of the Obligations and all other amounts payable under the Credit
Agreement and the other Loan Documents.
8.5 Successors and Assigns. This Agreement shall be
binding upon the successors and assigns of each Grantor and shall inure to the
benefit of the Administrative Agent and the Secured Parties and their successors
and assigns; provided that no Grantor may assign, transfer or delegate any of
its rights or obligations under this Agreement without the prior written consent
of the Administrative Agent.
8.6 Set-Off. Each Grantor hereby irrevocably authorizes
the Administrative Agent and each Secured Party at any time and from time to
time while an Event of Default shall have occurred and be continuing, without
notice to such Grantor or any other Grantor, any such notice being expressly
waived by each Grantor, to set-off as appropriate and apply any and all deposits
(general or special, time or demand, provisional or final, but excluding
deposits held by such Grantor in a fiduciary capacity for others), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by the Administrative Agent or such Secured
Party to or for the credit or the account of such Grantor, or any part thereof
in such amounts as the Administrative Agent or such Secured Party may elect,
against and on account of the obligations and liabilities of such Grantor to the
Administrative Agent or such Secured Party hereunder and claims of every nature
and description of the Administrative Agent or such Secured Party against such
Grantor, in any currency, whether arising hereunder, under the Credit Agreement,
any other Loan Document or otherwise, as the Administrative Agent or such
Secured Party may elect, whether or not the Administrative Agent or any Secured
Party has made any demand for payment and although such obligations, liabilities
and claims may be contingent or unmatured. The Administrative Agent and each
Secured Party shall notify such Grantor promptly of any such set-off and the
application made by the Administrative Agent or such Secured Party of the
proceeds thereof, provided that the failure to give such notice shall not affect
the validity of such set-off and application. The rights of the Administrative
Agent and each Secured Party under this Section are in addition to other rights
and remedies (including, without limitation, other rights of set-off) which the
Administrative Agent or such Secured Party may have.
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8.7 Counterparts. This Agreement may be executed by one
or more of the parties to this Agreement on any number of separate counterparts
(including by telecopy), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
8.8 Severability. Any provision of this Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
8.9 Section Headings. The Section headings used in this
Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
8.10 Integration. This Agreement and the other Loan
Documents represent the agreement of the Grantors, the Administrative Agent and
the Secured Parties with respect to the subject matter hereof and thereof, and
there are no promises, undertakings, representations or warranties by the
Administrative Agent or any Secured Party relative to subject matter hereof and
thereof not expressly set forth or referred to herein or in the other Loan
Documents.
8.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK.
8.12 Submission To Jurisdiction; Waivers. Each Grantor
hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal
action or proceeding relating to this Agreement and the other Loan
Documents to which it is a party, or for recognition and enforcement of
any judgment in respect thereof, to the non-exclusive general
jurisdiction of the Courts of the State of New York, the courts of the
United States of America for the Southern District of New York, and
appellate courts from any thereof;
(b) consents that any such action or proceeding may be
brought in such courts and waives any objection that it may now or
hereafter have to the venue of any such action or proceeding in any
such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to such Grantor at its address referred to in Section 8.2 or
at such other address of which the Administrative Agent shall have been
notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to xxx in any other jurisdiction; and
30
(e) waives, to the maximum extent not prohibited by law,
any right it may have to claim or recover in any legal action or
proceeding referred to in this Section any special, exemplary, punitive
or consequential damages.
8.13 Acknowledgments. Each Grantor hereby acknowledges
that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents
to which it is a party;
(b) neither the Administrative Agent nor any Secured
Party has any fiduciary relationship with or duty to any Grantor
arising out of or in connection with this Agreement or any of the other
Loan Documents, and the relationship between the Grantors, on the one
hand, and the Administrative Agent and Secured Parties, on the other
hand, in connection herewith or therewith is solely that of debtor and
creditor; and
(c) no joint venture is created hereby or by the other
Loan Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Secured Parties or among the Grantors and
the Secured Parties.
8.14 Additional Grantors. Each Subsidiary of the Borrower
that is required to become a party to this Agreement pursuant to Section 6.9 of
the Credit Agreement shall become a Grantor for all purposes of this Agreement
upon execution and delivery by such Subsidiary of an Assumption Agreement in the
form of Annex I hereto.
8.15 Releases. (a) At such time as the Loans, the
Reimbursement Obligations and the other Obligations (other than Borrower Hedge
Agreement Obligations and Guarantor Hedge Agreement Obligations) shall have been
paid in full, the Commitments have been terminated and no Letters of Credit
shall be outstanding, the Collateral shall be released from the Liens created
hereby, and this Agreement and all obligations (other than those expressly
stated to survive such termination) of the Administrative Agent and each Grantor
hereunder shall terminate, all without delivery of any instrument or performance
of any act by any party, and all rights to the Collateral shall revert to the
Grantors. At the request and sole expense of any Grantor following any such
termination, the Administrative Agent shall deliver to such Grantor any
Collateral held by the Administrative Agent hereunder, and execute and deliver
to such Grantor such documents as such Grantor shall reasonably request to
evidence such termination.
(b) If any of the Collateral shall be sold, transferred
or otherwise disposed of by any Grantor in a transaction permitted by the Credit
Agreement, then the Administrative Agent, at the request and sole expense of
such Grantor, shall execute and deliver to such Grantor all releases or other
documents reasonably necessary or desirable for the release of the Liens created
hereby on such Collateral. At the request and sole expense of the Borrower, a
Subsidiary Guarantor shall be released from its obligations hereunder in the
event that all the Capital Stock of such Subsidiary Guarantor shall be sold,
transferred or otherwise disposed of in a transaction permitted by the Credit
Agreement; provided that the Borrower shall have delivered to the Administrative
Agent, at least 10 Business Days prior to the date of the proposed release, a
written request for release identifying the relevant Subsidiary Guarantor and
the terms of the sale or other disposition in reasonable detail, including the
price thereof and any expenses in
31
connection therewith, together with a certification by the Borrower stating that
such transaction is in compliance with the Credit Agreement and the other Loan
Documents.
8.16 WAIVER OF JURY TRIAL. EACH GRANTOR AND, BY ACCEPTANCE
OF THE BENEFITS HEREOF, EACH AGENT AND EACH LENDER, HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
8.17 Additional Waiver. Each Guarantor waives all rights
and defenses that such Guarantor may have because the Borrower's debt is secured
by real property. This means, among other things: (i) the Administrative Agent
or the Lenders may collect from any Guarantor without first foreclosing on any
real or personal property collateral pledged by the Borrower, (ii) if the
Administrative Agent or the Lenders foreclose on any real property collateral
pledged by the Borrower, (A) the amount of the debt may be reduced only by the
price for which that collateral is sold at the foreclosure sale, even if the
collateral is worth more than the sale price; (B) the Administrative Agent or
the Lenders may collect from the Guarantors even if the Administrative Agent or
the Lenders, by foreclosing on the real property collateral, has destroyed any
right any Guarantor may have to collect from the Borrower. THIS IS AN
UNCONDITIONAL AND IRREVOCABLE WAIVER OF ANY RIGHTS AND DEFENSES ANY GUARANTOR
MAY HAVE BECAUSE THE BORROWER'S DEBT IS SECURED BY REAL PROPERTY. THESE RIGHTS
AND DEFENSES INCLUDE, BUT ARE NOT LIMITED TO, ANY RIGHTS AND DEFENSES BASED UPON
SECTIONS 580a, 580b, 580d, OR 726 OF THE CALIFORNIA CODE OF CIVIL PROCEDURE.
Each Guarantor waives all rights and defenses arising out of an election of
remedies by the Administrative Agent or the Lenders, even though that election
of remedies, such as a non-judicial foreclosure with respect to security for an
Obligation guaranteed by any Guarantor, has destroyed any Guarantor's rights of
subrogation and reimbursement against the principal by operation of Section 580d
of the California Code of Civil Procedure or otherwise.
IN WITNESS WHEREOF, each of the undersigned has caused this
Guarantee and Collateral Agreement to be duly executed and delivered as of the
date first above written.
CINEMARK, INC.
By: /s/ Xxxxxxx Xxxxxxxx
-----------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Secretary
CNMK HOLDING, INC.
By: /s/ Xxxxxx Xxxxxxxxxx
-----------------------------------
Name: Xxxxxx Xxxxxxxxxx
Title: Secretary
CINEMARK USA, INC.
By: /s/ Xxxxxx Xxxxxx
-----------------------------------
Name: Xxxxxx Xxxxxx
Title: Senior Vice President
CINEMARK INVESTMENTS CORPORATION
CINEMARK LEASING COMPANY
CINEMARK, L.L.C.
CINEMARK MEXICO (USA), INC.
GREELEY HOLDINGS, INC.
CINEMARK PARTNERS I, INC.
CINEMARK PROPERTIES, INC.
MISSOURI CITY CENTRAL 6, INC.
MULTIPLEX SERVICES, INC.
SUNNYMEAD CINEMA CORP.
TRANS TEXAS CINEMA, INC.
By: /s/ Xxxxxxx Xxxxxxxx
-----------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Vice President - General
Counsel
[SIGNATURE PAGE TO THE AMENDED AND RESTATED GUARANTEE & COLLATERAL AGREEMENT]
CNMK TEXAS PROPERTIES, LTD.
By: Sunnymead Cinema Corp., its
general partner
By: /s/ Xxxxxxx Xxxxxxxx
-----------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Vice President - General
Counsel
LAREDO THEATRE, LTD.
By: CNMK Texas Properties, Ltd., its
general partner
By: Sunnymead Cinema Corp., its
general partner
By: /s/ Xxxxxxx Xxxxxxxx
-----------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Vice President - General
Counsel
CNMK DELAWARE INVESTMENTS I, L.L.C.
CNMK DELAWARE INVESTMENTS II, L.L.C.
CNMK INVESTMENTS, INC.
MULTIPLEX PROPERTIES, INC.
By: /s/ Xxxxxx Xxxxxxxxxx
-----------------------------------
Name: Xxxxxx Xxxxxxxxxx
Title: Secretary
CNMK DELAWARE INVESTMENT
PROPERTIES, L.P.
By: CNMK Delaware Investments I, L.L.C.,
its general partner
By: /s/ Xxxxxx Xxxxxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxxxxx
Title: Secretary
[SIGNATURE PAGE TO THE AMENDED AND RESTATED GUARANTEE & COLLATERAL AGREEMENT]
