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EXHIBIT 10.11(a)
CREDIT AGREEMENT
Dated as of November 16, 1998
among
Cinemark Mexico (USA), Inc.,
as Borrower
Bank of America National Trust
and Savings Association,
as Administrative Agent
and
The Financial Institutions Party Hereto
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TABLE OF CONTENTS
SECTION PAGE
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SECTION 1. DEFINITIONS.........................................................................................1
1.01 DEFINED TERMS.........................................................................................1
1.02 OTHER INTERPRETIVE PROVISIONS........................................................................18
SECTION 2. THE CREDITS........................................................................................19
2.01 AMOUNTS AND TERMS OF COMMITMENTS.....................................................................19
2.02 LOAN ACCOUNTS AND NOTES..............................................................................19
2.03 PROCEDURE FOR BORROWING..............................................................................19
2.04 CONVERSION AND CONTINUATION ELECTIONS................................................................20
2.05 LIMITATION ON INTEREST PERIODS.......................................................................21
2.06 TERMINATION OR REDUCTION OF AGGREGATE COMMITMENT.....................................................21
2.07 OPTIONAL PREPAYMENTS.................................................................................22
2.08 MATURITY DATE........................................................................................22
2.09 INTEREST.............................................................................................22
2.10 FEES.................................................................................................24
2.11 COMPUTATION OF FEES AND INTEREST.....................................................................24
2.12 PAYMENTS BY BORROWER.................................................................................25
2.13 PAYMENTS BY THE BANKS TO THE ADMINISTRATIVE AGENT....................................................25
2.14 SHARING OF PAYMENTS, ETC.............................................................................26
2.15 CINEMARK USA GUARANTY................................................................................27
SECTION 3. TAXES, YIELD PROTECTION AND ILLEGALITY.............................................................27
3.01 TAXES................................................................................................27
3.02 ILLEGALITY...........................................................................................29
3.03 INCREASED COSTS AND REDUCTION OF RETURN..............................................................29
3.04 FUNDING LOSSES.......................................................................................30
3.05 INABILITY TO DETERMINE RATES.........................................................................30
3.06 SURVIVAL.............................................................................................31
SECTION 4. CONDITIONS PRECEDENT...............................................................................31
4.01 CONDITIONS OF INITIAL LOANS..........................................................................31
4.02 CONDITIONS TO ALL BORROWINGS.........................................................................33
SECTION 5. REPRESENTATIONS AND WARRANTIES.....................................................................33
5.01 CORPORATE EXISTENCE AND POWER........................................................................33
5.02 CORPORATE AUTHORIZATION; NO CONTRAVENTION............................................................33
5.03 GOVERNMENTAL AUTHORIZATION...........................................................................34
5.04 BINDING EFFECT.......................................................................................34
5.05 LITIGATION...........................................................................................34
5.06 NO DEFAULT...........................................................................................34
5.07 ERISA................................................................................................34
5.08 USE OF PROCEEDS......................................................................................34
5.09 TITLE TO PROPERTIES..................................................................................34
5.10 TAXES................................................................................................35
5.11 FINANCIAL CONDITION..................................................................................35
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SECTION PAGE
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5.12 ENVIRONMENTAL MATTERS................................................................................35
5.13 SUBSIDIARIES.........................................................................................36
5.14 REGULATED ENTITIES...................................................................................36
5.15 NO BURDENSOME RESTRICTIONS...........................................................................36
5.16 SOLVENCY.............................................................................................36
5.17 LABOR RELATIONS......................................................................................36
5.18 COPYRIGHTS, PATENTS, TRADEMARKS AND LICENSES, ETC....................................................36
5.19 INSURANCE............................................................................................37
5.20 SWAP OBLIGATIONS.....................................................................................37
5.21 YEAR 2000 COMPLIANCE.................................................................................37
5.22 FULL DISCLOSURE......................................................................................37
SECTION 6. AFFIRMATIVE COVENANTS..............................................................................37
6.01 FINANCIAL STATEMENTS.................................................................................37
6.02 CERTIFICATES; OTHER INFORMATION......................................................................38
6.03 NOTICES..............................................................................................39
6.04 PRESERVATION OF CORPORATE EXISTENCE, ETC.............................................................40
6.05 MAINTENANCE OF PROPERTY..............................................................................41
6.06 INSURANCE............................................................................................41
6.07 PAYMENT OF OBLIGATIONS...............................................................................41
6.08 COMPLIANCE WITH LAWS.................................................................................41
6.09 INSPECTION OF PROPERTY AND BOOKS AND RECORDS.........................................................41
6.10 ENVIRONMENTAL LAWS...................................................................................41
6.11 USE OF PROCEEDS......................................................................................42
6.12 RECAPITALIZATION; CINEMARK HOLDINGS BECOMING A GUARANTOR.............................................42
6.13 YEAR 2000 COMPLIANCE.................................................................................42
6.14 FURTHER ASSURANCES...................................................................................42
SECTION 7. NEGATIVE COVENANTS.................................................................................42
7.01 LIMITATION ON LIENS..................................................................................43
7.02 DISPOSITION OF ASSETS................................................................................44
7.03 CONSOLIDATIONS AND MERGERS...........................................................................44
7.04 LIMITATION ON INVESTMENTS............................................................................44
7.05 LIMITATION ON INDEBTEDNESS...........................................................................45
7.06 TRANSACTIONS WITH AFFILIATES.........................................................................46
7.07 USE OF PROCEEDS......................................................................................46
7.08 NO ERISA PLANS.......................................................................................46
7.09 LEASE OBLIGATIONS....................................................................................46
7.10 RESTRICTED PAYMENTS..................................................................................46
7.11 LIMITATION ON MANAGEMENT FEES........................................................................47
7.12 BORROWER LEVERAGE RATIO..............................................................................47
7.13 FIXED CHARGE COVERAGE RATIO..........................................................................47
7.14 CHANGE IN BUSINESS...................................................................................47
7.15 ACCOUNTING CHANGES...................................................................................47
7.16 LIMITATIONS ON NEGATIVE PLEDGES......................................................................47
SECTION 8. EVENTS OF DEFAULT..................................................................................47
8.01 EVENT OF DEFAULT.....................................................................................47
8.02 REMEDIES.............................................................................................49
8.03 RIGHTS NOT EXCLUSIVE.................................................................................50
SECTION 9. THE ADMINISTRATIVE AGENT...........................................................................50
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9.01 APPOINTMENT AND AUTHORIZATION........................................................................50
9.02 DELEGATION OF DUTIES.................................................................................50
9.03 LIABILITY OF ADMINISTRATIVE AGENT....................................................................50
9.04 RELIANCE BY ADMINISTRATIVE AGENT.....................................................................51
9.05 NOTICE OF DEFAULT....................................................................................51
9.06 CREDIT DECISION......................................................................................52
9.07 INDEMNIFICATION......................................................................................52
9.08 ADMINISTRATIVE AGENT IN INDIVIDUAL CAPACITY..........................................................53
9.09 SUCCESSOR ADMINISTRATIVE AGENT.......................................................................53
SECTION 10. MISCELLANEOUS.....................................................................................54
10.01 AMENDMENTS AND WAIVERS. .............................................................................54
10.02 NOTICES. ............................................................................................54
10.03 NO WAIVER; CUMULATIVE REMEDIES. .....................................................................54
10.04 COSTS AND EXPENSES. .................................................................................54
10.05 GENERAL INDEMNITY. ..................................................................................55
10.06 MARSHALLING; PAYMENTS SET ASIDE. ....................................................................56
10.07 SUCCESSORS AND ASSIGNS. .............................................................................56
10.08 ASSIGNMENTS, PARTICIPATIONS, ETC. ...................................................................56
10.09 SET-OFF. ............................................................................................58
10.10 NOTIFICATION OF ADDRESSES, LENDING OFFICES, ETC. ....................................................58
10.11 COUNTERPARTS. .......................................................................................58
10.12 SEVERABILITY. .......................................................................................58
10.13 NO THIRD PARTIES BENEFITED. .........................................................................58
10.14 TIME. ...............................................................................................58
10.15 GOVERNING LAW AND JURISDICTION. .....................................................................58
10.16 WAIVER OF JURY TRIAL. ...............................................................................59
10.17 NOTICE OF CLAIMS; CLAIMS BAR. .......................................................................59
10.18 ENTIRE AGREEMENT. ...................................................................................60
10.19 INTERPRETATION. .....................................................................................60
10.20 TERMINATION OF CINEMARK INTERNATIONAL CREDIT AGREEMENT. .............................................60
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EXHIBITS
Form of:
A Notice of Borrowing
B Notice of Conversion/Continuation
C Cinemark USA Guaranty
D Notice of Assignment and Acceptance
E Promissory Note
F Intercompany Subordination Agreement
SCHEDULES
1.01 Proforma Cash Flow for Annualized Theatres
2.01 Commitments
5.13 Subsidiaries
7.01 Existing Liens
7.05 Existing Indebtedness
10.02 Lending Offices
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT is entered into as of November 16, 1998 among
CINEMARK MEXICO (USA), INC., a Delaware corporation (the "Borrower"), the
several financial institutions from time to time party to this Agreement
(collectively, the "Banks" and individually, a "Bank"), and Bank of America
National Trust and Savings Association, as agent for the Banks (the
"Administrative Agent").
RECITAL
The Banks desire to provide a revolving credit facility to Borrower
upon the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained herein, the parties agree as follows:
SECTION 1. DEFINITIONS
1. DEFINED TERMS.
In addition to the terms defined elsewhere in this Agreement, the
following terms have the following meanings:
"Administrative Agent" means Bank of America, when acting in its
capacity as the Administrative Agent under any of the Loan Documents, or any
successor Administrative Agent.
"Affiliate" means, as to any Person, any other Person which, directly
or indirectly, is in control of, is controlled by, or is under common control
with, such Person. A Person shall be deemed to control another Person if the
controlling Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of the other Person, whether
through the ownership of voting securities, by contract or otherwise. Without
limitation, any director, executive officer or beneficial owner of 10% or more
of the voting interest of a Person shall for the purposes of this Agreement, be
deemed to control the other Person. In no event shall any Bank be deemed an
"Affiliate" of Borrower or of any Subsidiary of Borrower.
"Agent-Related Persons" means Bank of America and any successor
Administrative Agent arising under Section 9.09, together with their respective
Affiliates, and the officers, directors, employees, agents and attorneys-in-fact
of such Persons and Affiliates.
"Aggregate Commitment" means the combined Commitments of the Banks in
the amount of $30,000,000, as such amount may be reduced from time to time
pursuant to this Agreement.
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Cinemark Mexico (USA) Credit Agreement
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"Agreement" means this Credit Agreement, as amended, modified,
supplemented or waived from time to time in accordance with the terms hereof.
"Annualized Cash Flow" means, for any period, for any Person, the sum
of (a) the Cash Flow of such Person for such period plus (b) the Proforma Cash
Flow for Annualized Theatres operated by such Person less (c) the Cash Flow from
Annualized Theatres operated by such Person; provided, however, that if during
the period for which Annualized Cash Flow is being determined, such Person shall
have acquired any assets identified to the Administrative Agent other than
assets acquired as a result of Capital Expenditures made in the ordinary course
of business (including without limitation acquisition by merger or
consolidation) or made any Dispositions of assets, the Cash Flow of such Person
shall be calculated on a pro forma basis as if such acquisition or Disposition
had occurred at the beginning of such period; provided, further, that if the
Cash Flow of Foreign Restricted Subsidiaries exceeds 30% of the Annualized Cash
Flow of Borrower and its Restricted Subsidiaries on a consolidated basis, such
excess over 30% shall be excluded from the determination of Annualized Cash
Flow; provided, further, that when a Subsidiary is designated as a Restricted
Subsidiary in accordance with the definition thereof, Annualized Cash Flow shall
thereafter be calculated as if such designation had been made at the beginning
of the applicable measurement period.
"Annualized Theatres" means, for any period, newly constructed theatres
identified to the Administrative Agent that have had more than one complete
Fiscal Quarter of operation, but less than four complete Fiscal Quarters of
operation (each, an "Annualized Theatre").
"Applicable Amount" means the basis points per annum specified below
applicable to interest rates and the Commitment fee opposite the applicable
Borrower Leverage Ratio and, with respect to Offshore Rate Loans, below the
applicable Cinemark USA Senior Leverage Ratio, as set forth in the certificate
received by the Administrative Agent pursuant to Section 4.01(i) or the most
recent certificate received by the Administrative Agent pursuant to Section
6.02(a):
Borrower Offshore Rate Loans Base Rate Commitment
Leverage Ratio Loans Fee
--------------------------------------------------------------------------------------------------------
Cinemark USA Senior
Leverage Ratio:
--------------------------------------------------------------------------------------------------------
< 1.75 2.50 < x < x>2.50
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1.75
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3.50 <= x < 3.75 175.00 187.50 200.00 50.00 37.50
3.00 <= x < 3.50 150.00 162.50 175.00 25.00 35.00
2.50 <= x < 3.00 125.00 137.50 150.00 0.00 32.50
2.00 <= x < 2.50 112.50 125.00 137.50 0.00 30.00
x < 2.00 100.00 112.50 125.00 0.00 ▇▇.▇▇
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▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (▇▇▇) Credit Agreement
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The Applicable Amount shall be in effect from the date the most recent
certificate delivered pursuant to Section 4.01(i) or 6.02(a) is received by the
Administrative Agent to but excluding the date the next such certificate is
received; provided, however, that if Borrower fails to timely deliver the next
such certificate, the Applicable Amount from date such certificate was due to
but excluding the date such certificate is received by the Administrative Agent
(the "Delinquent Period") shall be the higher of (a) the Applicable Amount
already in effect and (b) the Applicable Amount as set forth in such certificate
when received, retroactively applied to the Delinquent Period.
"Assignee" has the meaning specified in Section 10.08(a).
"Bank" has the meanings specified in the introductory clause hereto,
and any successors to, and permitted assigns of, any such Bank. Unless the
context otherwise clearly requires, "Bank" includes any such institution, or any
Affiliate of such institution, in its capacity as a counterparty under any Swap
Contract.
"Bank Affiliate" means a Person that is a Subsidiary of a Bank or of a
Person of which a Bank is a Subsidiary.
"Bank of America" means Bank of America National Trust and Savings
Association, a national banking association, and any successors thereto under
this Agreement.
"Bankruptcy Code" means the Federal Bankruptcy Reform Act of 1978 (12
U.S.C. Section 101, et seq.).
"Base Rate" means the higher of: (a) the rate of interest publicly
announced from time to time by Bank of America as its "reference rate." It is a
rate set by Bank of America based upon various factors including Bank of
America's costs and desired return, general economic conditions and other
factors, and is used as a reference point for pricing some loans, which may be
priced at, above, or below such announced rate; and (b) one-half percent per
annum above the Federal Funds Rate. Any change in the reference rate announced
by Bank of America shall take effect at the opening of business on the day
specified in the public announcement of such change.
"Base Rate Loan" means a Loan that bears interest based on the Base
Rate.
"Borrower" has the meaning set forth in the introductory paragraph
hereto.
"Borrower Leverage Ratio" means, as of any date of determination, the
ratio of (a) all interest bearing indebtedness of Borrower and its Restricted
Subsidiaries on a consolidated basis (excluding Intercompany Subordinated
Indebtedness) to (b) the Annualized Cash Flow of Borrower and its Restricted
Subsidiaries on a consolidated basis.
"Borrower Party" means any Person, other than the Administrative Agent
and the Banks, which now or hereafter is a party to any of the Loan Documents.
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Cinemark Mexico (USA) Credit Agreement
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"Borrowing" means a borrowing hereunder consisting of Loans made to
Borrower on the same day by the Banks pursuant to Section 2.
"Borrowing Date" means the date a Borrowing is made.
"Business Day" means any day other than a Saturday, Sunday or other day
on which commercial banks in New York City or San Francisco are authorized or
required by law to close and, if the applicable Business Day relates to any
Offshore Rate Loan, means such a day on which dealings are carried on in the
applicable offshore dollar interbank market.
"Capital Lease" has the meaning specified in the definition of Capital
Lease Obligations.
"Capital Lease Obligations" means all monetary obligations of Borrower
or any of its Restricted Subsidiaries under any leasing or similar arrangement
which, in accordance with GAAP, is classified as a capital lease ("Capital
Lease").
"Capital Stock" of any Person means (a) any and all shares, interest,
participations or other equivalents (however designated) of such Persons'
capital stock and any warrants, options and similar rights to acquire such
capital stock, (b) in the case of a partnership, partnership interests (whether
general or limited) and (c) any other interest or participation that confers on
a Person the right to receive a share of the profits and losses of, or
distributions or assets of, the issuing Person.
"Cash Equivalents" means any Investment in the following kinds of
instruments:
(a) readily marketable obligations issued or unconditionally guaranteed
as to principal and interest by the United States of America or by any agency or
authority controlled or supervised by and acting as an instrumentality of the
United States of America if, on the date of purchase or other acquisition of any
such instrument by Borrower, the remaining term to maturity or interest rate
adjustment is not more than two years;
(b) (i) demand and time deposits and certificates of deposit or
acceptances with a maturity of 180 days or less of (i) any financial institution
organized in the United States that is a member of the Federal Reserve System
having combined capital and surplus and undivided profits of not less than
$100,000,000, (ii) overseas branches of commercial banks incorporated under the
laws of the United States of America, any state thereof, the District of
Columbia, Canada or any province or territory thereof having combined capital
and surplus and undivided profits in excess of $100,000,000, or (iii) any
commercial bank organized under the laws of any other country that is a member
of the Organization for Economic Cooperation and Development ("OECD") and has
total assets in excess of $100,000,000, or (ii) deposits available for
withdrawal or distribution with any commercial bank not meeting the
qualifications specified in clause (b)(i) above but which is organized under the
laws of (a) any country that is a member of the OECD and has total assets in
excess of $100,000,000 or (b) any other country in which the Company or any
Restricted Subsidiary maintains an office or is engaged in business, provided
that, in either case (A) all such deposits are required to be made in such
accounts in the ordinary
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Cinemark Mexico (USA) Credit Agreement
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course of business, (B) such deposits do not at any one time exceed $1,000,000
in the aggregate and (C) no funds so deposited remain on deposits in such bank
for more than 30 days;
(c) commercial paper issued by any corporation, if such commercial
paper has, at the time of Borrower's Investment therein or contractual
commitment providing for such Investment, credit ratings of at least A-1 by
Standard & Poor's Rating Group ("S&P") and P-1 by ▇▇▇▇▇'▇ Investor Service, Inc.
("Moody's");
(d) money market mutual or similar funds having assets in excess of
$100,000,000;
(e) readily marketable debt obligations issued by any corporation, if
at the time of the Borrower's or its Restricted Subsidiaries' Investment therein
or contractual commitment providing for such Investment (1) the remaining term
to maturity is not more than two years and (2) such debt obligations are rated
in one of the two highest rating categories of both S&P and Moody's; and
(f) demand or time deposit accounts used in the ordinary course of
business with commercial banks the balances in which are at all times fully
insured as to principal and interest by the Federal Deposit Insurance
Corporation or any successor thereto or any Canadian equivalent thereof.
In the event that either S&P or Moody's ceases to publish ratings of
the type provided herein, a replacement rating agency shall be selected by
Borrower or its Restricted Subsidiaries with the consent of the Majority Banks,
and in each case the rating of such replacement rating agency most nearly
equivalent to the corresponding S&P or ▇▇▇▇▇'▇ rating, as the case may be, shall
be used for purposes hereof.
"Cash Flow" means, for any period, for any Person, or, as applicable,
with respect to certain properties or assets of any Person, determined in
accordance with GAAP, the sum of (a) net income (or net loss) plus (b) all
amounts treated as expenses for depreciation and Interest Expense (including
amortization of debt issue costs) and the amortization of intangibles of any
kind to the extent included in the determination of such net income (or loss),
plus (c) all accrued taxes on or measured by income to the extent included in
the determination of such net income (or loss) plus (d) increases in deferred
lease expense, plus (e) other non cash items reducing net income, plus (f)
management fees payable to Cinemark USA and its Subsidiaries less (g) decreases
in deferred lease expense, plus (h) costs of Swap Contracts associated with
foreign currency ▇▇▇▇▇▇; provided, however that net income (or loss) shall be
computed for these purposes without giving effect to gains or losses on
dispositions, exchange, gains or losses relating to foreign currency
fluctuations, or extraordinary losses or extraordinary gains; provided, further,
that Cash Flow of any Restricted Subsidiary which is not a Wholly-Owned
Subsidiary shall be included in the calculation of Cash Flow only in an amount
equal to percentage of Borrower's ownership thereof; i.e. if such a Restricted
Subsidiary is 90% owned, only 90% of such Restricted Subsidiary's Cash Flow
shall be included.
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Cinemark Mexico (USA) Credit Agreement
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"Cash Income Taxes" means, with respect to any fiscal period, taxes on
or measured by the income of Borrower that are paid or currently payable in cash
by Borrower during that fiscal period.
"Cash Interest Expense" means, for any period, Interest Expense paid or
due to be paid during such period in cash.
"CERCLA" has the meaning specified in the definition of "Environmental
Laws."
"Change in Control Event" means Cinemark USA failing to own at least
90% of the outstanding Capital Stock of Borrower.
"Cinemark Holdings" means Cinemark Theatres Holdings, Inc., a Delaware
corporation which may be formed as contemplated by the Recapitalization.
"Cinemark International" means Cinemark International LLC, a Texas
limited liability company.
"Cinemark International Credit Agreement" means that certain Credit
Agreement dated as of February 18, 1997, among Cinemark International, the banks
named therein, and Bank of America National Trust and Savings Association, as
administrative agent thereunder, as amended, modified, supplemented or waived
from time to time.
"Cinemark USA" means Cinemark USA, Inc. a Texas corporation.
"Cinemark USA Credit Agreement" means that certain Second Amended and
Restated Reducing Revolving Credit Agreement dated as of February 12, 1998, as
amended, modified, supplemented or waived from time to time, among Cinemark USA,
the banks named therein, Bank of America National Trust and Savings Association,
as administrative agent thereunder, NationsBank, N.A. as syndication agent, and
BankBoston, N.A., The Bank of Nova Scotia, CIBC Inc. and Fleet Bank, N.A., as
co-agents; provided, however, that that any amendment, modification, supplement
or waiver constituting a Prohibited Action shall not be deemed to amend, modify,
supplement or waive the Cinemark USA Credit Agreement for purposes of this
Credit Agreement; provided, further, that if the Cinemark USA Credit Agreement
is terminated or cancelled or otherwise ceases to be in full force and effect
for any reason, then, for purposes of this Agreement only: all references in
this Agreement to the Cinemark USA Credit Agreement shall be deemed references
to such agreement as in effect immediately before such termination, cancellation
or lack of effectiveness subject to the prior proviso and the Cinemark USA
Credit Agreement shall be deemed to remain in effect; and any step-downs
scheduled in any financial covenants set forth therein shall continue take place
as so scheduled as if the Cinemark USA Credit Agreement remain in effect.
"Cinemark USA Guaranty" means (a) a Continuing Guaranty substantially
in the form of Exhibit C and (b) from after the Recapitalization Date, a
continuing guaranty executed and delivered by Cinemark Holdings as contemplated
by Section 6.12, as each is amended, supplemented, modified, renewed and
replaced from time to time.
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Cinemark Mexico (USA) Credit Agreement
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"Cinemark USA Senior Leverage Ratio" means the ratio of Senior
Indebtedness to Annualized Cash Flow (as such terms are defined in the Cinemark
USA Credit Agreement) as most recently calculated pursuant to the Cinemark USA
Credit Agreement and reported to the administrative agent thereunder pursuant to
Section 6.2(a) of the Cinemark USA Credit Agreement.
"Closing Date" means the date on which all conditions precedent set
forth in Section 4.01 are satisfied or waived by all Banks.
"Code" means the Internal Revenue Code of 1986, and regulations
promulgated thereunder.
"Commitment" means, with respect to each Bank, has the meaning
specified in Section 2.01.
"Contingent Obligation" means, as applied to any Person, any direct or
indirect liability of that Person with respect to any Indebtedness, lease,
dividend, letter of credit or other obligation (the "primary obligations") of
another Person (other than a Restricted Subsidiary) (the "primary obligor"),
including any obligation of that Person, whether or not contingent, (a) to
purchase, repurchase or otherwise acquire such primary obligations or any
property constituting direct or indirect security therefor, (b) to advance or
provide funds (i) for the payment or discharge of any such primary obligation,
or (ii) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency or any balance sheet item, level
of income or financial condition of the primary obligor, (c) to purchase
property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation, (d) otherwise to assure or hold harmless the
holder of any such primary obligation against loss in respect thereof, or (e) in
respect of any Swap Contract. The amount of any Contingent Obligation shall be
deemed equal to the stated or determinable amount of the primary obligation in
respect of which such Contingent Obligation is made or, in the case of
Contingent Obligations other than in respect of Swap Contracts, if not stated or
if indeterminable, the maximum reasonably anticipated liability in respect
thereof and, in the case of Contingent Obligations in respect of Swap Contracts,
shall be equal to the Swap Termination Value; provided, however, guarantees of
(A) payroll and operating accounts below $500,000 in the aggregate incurred in
the ordinary course of business by Restricted Subsidiaries, (B) costs and
expenses relating to shipments of furniture, fixtures and equipment to
Restricted Subsidiaries and (C) operating leases of Restricted Subsidiaries,
shall not be deemed to be Contingent Obligations.
"Contractual Obligations" means, as to any Person, any provision of any
security issued by such Person or of any agreement, undertaking, contract,
indenture, mortgage, deed of trust or other instrument, document or agreement to
which such Person is a party or by which it or any of its property is bound.
"Controlled Group" means Borrower and all Persons (whether or not
incorporated) under common control or treated as a single employer with Borrower
pursuant to Section 414(b), (c), (m) or (o) of the Code.
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Cinemark Mexico (USA) Credit Agreement
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"Conversion/Continuation Date" means any date on which Borrower elects
to convert a Base Rate Loan into an Offshore Rate Loan; continue an Offshore
Rate Loan as an Offshore Rate Loan; or convert an Offshore Rate Loan into a Base
Rate Loan.
"Default" means any event or circumstance which, with the giving of
notice, the lapse of time, or both, would (if not cured or otherwise remedied
during such time) constitute an Event of Default.
"Disposition" means (a) the sale, lease, conveyance or other
disposition of Property, (b) the sale or transfer by Borrower or any Restricted
Subsidiary of any equity securities of any Restricted Subsidiary other than to
Borrower or a Restricted Subsidiary, and (c) the designation of any Restricted
Subsidiary as an Unrestricted Subsidiary.
"Dollars", "dollars" and "$" each mean lawful money of the United
States.
"Eligible Assignee" means (a) a commercial bank organized under the
laws of the United States, or any state thereof, and having a combined capital
and surplus of at least $100,000,000; (b) a commercial bank organized under the
laws of any other country which is a member of the Organization for Economic
Cooperation and Development (the "OECD"), or a political subdivision of any such
country, and having a combined capital and surplus of at least $100,000,000,
provided that such bank is acting through a branch or agency located in the
United States; and (c) any Bank Affiliate.
"Environmental Claims" means all claims, however asserted, by any
Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law or for release or injury
to the environment or threat to public health, personal injury (including
sickness, disease or death), property damage, natural resources damage, or
otherwise alleging liability or responsibility for damages (punitive or
otherwise), cleanup, removal, remedial or response costs, restitution, civil or
criminal penalties, injunctive relief, or other type of relief, resulting from
or based upon (a) the presence, placement, discharge, emission or release
(including intentional and unintentional, negligent and non-negligent, sudden or
non-sudden, accidental or non-accidental placement, spills, leaks, discharges,
emissions or releases) of any Hazardous Material at, in, or from Property,
whether or not owned by Borrower or any Restricted Subsidiary, or (b) any other
circumstances forming the basis of any violation, or alleged violation, of any
Environmental Law.
"Environmental Laws" means all federal, state or local laws, statutes,
common law duties, rules, regulations, ordinances and codes, together with all
administrative orders, directed duties, requests, licenses, authorizations and
permits of, and agreements with, any Governmental Authorities, in each case
relating to environmental, health, safety and land use matters; including the
Comprehensive Environmental Response, Compensation and Liability Act of 1980
("CERCLA"), the Clean Air Act, the Federal Water Pollution Control Act of 1972,
the Solid Waste Disposal Act, the Federal Resource Conservation and Recovery
Act, the Toxic Substances Control Act, the Emergency Planning and Community
Right-to-Know Act.
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Cinemark Mexico (USA) Credit Agreement
14
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and regulations promulgated thereunder.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with Borrower within the meaning of Section
414(b), 414(c) or 414(m) of the Code.
"Event of Default" means any of the events or circumstances specified
in Section 8.01.
"Exchange Act" means the Securities and Exchange Act of 1934, as
amended from time to time, and regulations promulgated thereunder.
"Excluded Disposition" means any Disposition consisting of:
(a) a Disposition of inventory, or used, worn-out or surplus equipment,
all in the ordinary course of business;
(b) the Disposition of equipment to the extent that such equipment is
exchanged for credit against the purchase price of similar replacement
equipment, or the proceeds of such sale are reasonably promptly applied to the
purchase price of such replacement equipment;
(c) an exchange of theatre properties of similar aggregate value in the
ordinary course of business;
(d) a Disposition that is a Permitted Investment or a Restricted
Payment not prohibited by Section 7.10 (to the extent such Permitted Investment
may be deemed to constitute a Restricted Payment or a Disposition);
(e) the Disposition of all or substantially all of the assets of
Borrower (which is governed by Section 7.03); and
(f) Dispositions of Property or equity securities by a Restricted
Subsidiary to Borrower or a Wholly-Owned Restricted Subsidiary.
"Federal Funds Rate" means the weighted average of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published for such day of determination
(or if such day of determination is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day which is a Business Day, the average of the quotations
for such day on such transactions received by the Administrative Agent from
three Federal funds brokers of recognized standing selected by it.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System, or any successor thereto.
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Cinemark Mexico (USA) Credit Agreement
15
"Fiscal Quarter" means the fiscal quarter of Borrower ending on each
March 31, June 30, September 30 and December 31.
"Fiscal Year" means the fiscal year of Borrower ending on each December
31.
"Fixed Charge Coverage Ratio" means, as of the last day of any Fiscal
Quarter, for Borrower and its Restricted Subsidiaries on a consolidated basis,
the ratio of (a) the sum of (i) Annualized Cash Flow for the four Fiscal
Quarters ended on such date plus (ii) lease expense (excluding deferred lease
expense) for the following four Fiscal Quarters to (b) the sum of (i) scheduled
principal payments on Indebtedness (excluding principal payments on the Loans)
for the following four Fiscal Quarters plus (ii) Cash Interest Expense for the
following four Fiscal Quarters (based on the principal amount of Indebtedness
(including the Loans) outstanding as of such date and interest rates then in
effect) plus (iii) lease expense (excluding deferred lease expense) for the
following four Fiscal Quarters plus (iv) Maintenance Capital Expenditures for
the four Fiscal Quarters ending on such date plus (v) Cash Income Taxes
(including profit sharing taxes) paid or payable during the four Fiscal Quarters
ending on such date.
"Foreign Restricted Subsidiary" means any Restricted Subsidiary (a)
that is incorporated or otherwise organized under the laws of any foreign
country or subdivision thereof, or which is not qualified to do business, or is
not otherwise doing business, in the United States of America and (b) the
capital stock of which is at least 90% beneficially owned, directly or
indirectly, by Borrower."
"GAAP" means generally accepted accounting principles set forth from
time to time in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the accounting
profession), or in such other statements by such other entity as may be in
general use by significant segments of the U.S. accounting profession, which are
applicable to the circumstances as of the date of determination.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, or any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
"Hazardous Materials" means all those substances which are regulated
by, or which may form the basis of liability under, any Environmental Law,
including all substances identified under any Environmental Law as a pollutant,
contaminant, hazardous waste, hazardous constituent, special waste, hazardous
substance, hazardous material, or toxic substance, or petroleum or petroleum
derived substance or waste.
"Indebtedness" of any Person means, without duplication, (a) all
indebtedness for borrowed money; (b) all obligations issued, undertaken or
assumed as the deferred purchase price of property or services (other than trade
payables, coupons and gift certificates entered into
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Cinemark Mexico (USA) Credit Agreement
16
in the ordinary course of business pursuant to ordinary terms); (c) all
reimbursement obligations with respect to surety bonds, letters of credit,
bankers' acceptances and similar instruments (in each case, to the extent
material or non-contingent); (d) all obligations evidenced by notes, bonds,
debentures or similar instruments, including obligations so evidenced incurred
in connection with the acquisition of property, assets or businesses (but
excluding trade accounts payable or similar accrued liabilities arising in the
ordinary course of business); (e) all indebtedness created or arising under any
conditional sale or other title retention agreement, or incurred as financing,
in either case with respect to Property acquired by the Person (even though the
rights and remedies of the seller or bank under such agreement in the event of
default are limited to repossession or sale of such property); (f) all Capital
Lease Obligations; (g) all indebtedness referred to in clauses (a) through (f)
above secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien upon or in Property
(including accounts and contracts rights) owned by such Person, even though such
Person has not assumed or become liable for the payment of such Indebtedness
(provided, however, that the amount of any such Indebtedness which is
non-recourse to such Person shall be the lesser of the fair market value of the
Property subject to the Lien and the amount of the Indebtedness secured); and
(h) all Contingent Obligations in respect of indebtedness or obligations of
others of the kinds referred to in clauses (a) through (f) above.
"Insolvency Proceeding" means (a) any case, action or proceeding before
any court or other Governmental Authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution, winding-up
or relief of debtors, or (b) any general assignment for the benefit of
creditors, composition, marshalling of assets for creditors or other, similar
arrangement in respect of its creditors generally or any substantial portion of
its creditors; in each case (a) and (b) undertaken under U.S. Federal, State or
foreign law.
"Intercompany Subordinated Indebtedness" means any Indebtedness of
Borrower or its Restricted Subsidiaries owing to Cinemark USA and its Restricted
Subsidiaries.
"Intercompany Subordination Agreement" means the Intercompany
Subordination Agreement substantially in the form of Exhibit F, as amended,
supplemented, modified, renewed and replaced from time to time.
"Interest Expense" means, for any period, gross interest expense for
the period determined in accordance with GAAP (including all commissions,
discounts, fees and other charges in connection with standby letters of credit
and similar instruments and amortization of debt issue costs) for Borrower and
its Restricted Subsidiaries on a consolidated basis, plus (a) the portion of the
upfront costs and expenses for Swap Contracts of Borrower and its Restricted
Subsidiaries (to the extent not included in gross interest expense) fairly
allocated to such Swap Contracts as expenses for such period, and (b)
capitalized interest of Borrower and its Restricted Subsidiaries for the period.
"Interest Payment Date" means, with respect to any Offshore Rate Loan,
the last Business Day of each Interest Period applicable to such Loan; with
respect to any Base Rate Loan, the last Business Day of each calendar quarter;
and with respect to all Loans, the Maturity Date;
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Cinemark Mexico (USA) Credit Agreement
17
provided, however, that if any Interest Period for an Offshore Rate Loan exceeds
three months, interest shall also be paid on the date which falls three, six and
nine months, as applicable, after the beginning of such Interest Period.
"Interest Period" means, with respect to any Offshore Rate Loan, the
period commencing on the Borrowing Date or the Conversion/Continuation Date for
such Offshore Rate Loan and ending on the date 1, 2, 3, 6 or, if available to
all Banks in their sole discretion, 12 months thereafter, as selected by
Borrower in its Notice of Borrowing or Notice of Conversion/ Continuation;
provided that:
(a) if any Interest Period pertaining to an Offshore Rate Loan would
otherwise end on a day which is not a Business Day, that Interest Period shall
be extended to the next succeeding Business Day unless the result of such
extension would be to carry such Interest Period into another calendar month, in
which event such Interest Period shall end on the immediately preceding Business
Day;
(b) any Interest Period pertaining to an Offshore Rate Loan that begins
on the last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the calendar month at the end of
such Interest Period; and
(c) no Interest Period for any Loan shall extend beyond the Maturity
Date.
"Investment" means any direct or indirect advance, loan or other
extension of credit or capital contribution to (by means of any transfer of cash
or other property to others or any payment for property or services for the
account or use of others), or any purchase or acquisition of Capital Stock,
bonds, notes, debentures or other securities issued by, any other Person, other
than (a) loans or advances made to employees in the ordinary course of business
not in excess of $50,000 outstanding at any time to any employee and (b)
advances to customers in the ordinary course of business that are recorded as
accounts receivable on the balance sheet of any Person and any securities
received in settlement thereof.
"Lending Office" means, with respect to any Bank, the office or offices
of the Bank specified as its "Lending Office," "Domestic Lending Office" or
"Offshore Lending Office," as the case may be, under its name on Schedule 10.02
hereto, or such other office or offices of the Bank as it may from time to time
specify in writing to Borrower and the Administrative Agent.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, charge or deposit arrangement, encumbrance, lien (statutory or
other) or preference, priority or other security interest or preferential
arrangement of any kind or nature whatsoever (including those created by,
arising under or evidenced by any conditional sale or other title retention
agreement, the interest of a lessor under a Capital Lease Obligation, any
financing lease having substantially the same economic effect as any of the
foregoing, or the filing of any financing statement naming the owner of the
asset to which such lien relates as debtor, under the UCC or any comparable
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Cinemark Mexico (USA) Credit Agreement
18
law) and any contingent or other agreement to provide any of the foregoing, but
not including the interest of a lessor under an Operating Lease.
"Loan" means an extension of credit by a Bank to Borrower pursuant to
Section 2, and may be a Base Rate Loan or an Offshore Rate Loan. The conversion
or continuation of any Loan pursuant to Section 2.04 shall not be deemed to be a
new extension of credit, but instead shall be deemed to be the same Loan.
"Loan Documents" means this Agreement, any Notes, the Intercompany
Subordination Agreement, the Cinemark USA Guaranty, all exhibits hereto and
thereto, all documents delivered to the Administrative Agent or any Bank in
connection therewith and any Swap Contract between Borrower and any of the
Banks.
"Maintenance Capital Expenditures" means a capital expenditure for the
maintenance, repair, restoration, or refurbishment of any existing theatre,
excluding any capital expenditures which materially adds to or further improves
such existing theatre.
"Majority Banks" means at any time Banks then holding at least 51% of
the then aggregate unpaid principal amount of the Loans, or, if no such
principal amount is then outstanding, Banks then having at least 51% of the
Commitments; provided, however, that Majority Banks must include at least two
Banks.
"Margin Stock" means "margin stock" as such term is defined in
Regulation G, T, U or X of the Federal Reserve Board.
"Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, condition
(financial or otherwise) or prospects of Borrower or Borrower and its Restricted
Subsidiaries taken as a whole; (b) a material impairment of the ability of any
Borrower Party to perform under any Loan Document and avoid any Event of
Default; or (c) a material adverse effect upon the legality, validity, binding
effect or enforceability of any Loan Document.
"Maturity Date" means the earlier to occur of: (a) June 30, 2001; and
(b) the date on which the Aggregate Commitment shall terminate in accordance
with the provisions of this Agreement.
"Note" means a promissory note of Borrower payable to the order of a
Bank substantially in the form of Exhibit E evidencing the aggregate
Indebtedness of Borrower to such Bank resulting from Loans made by such Bank.
"Notice of Assignment and Acceptance" has the meaning specified in
Section 10.08(a).
"Notice of Borrowing" means a notice given by Borrower to the
Administrative Agent pursuant to Section 2.03, in substantially the form of
Exhibit A.
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Cinemark Mexico (USA) Credit Agreement
19
"Notice of Conversion/Continuation" means a notice given by Borrower to
the Administrative Agent pursuant to Section 2.04, in substantially the form of
Exhibit B.
"Notice of Lien" means any "notice of lien" or similar document
intended to be filed or recorded with any court, registry, recorder's office,
central filing office or other Governmental Authority for the purpose of
evidencing, creating, perfecting or preserving the priority of a Lien securing
obligations owing to a Governmental Authority.
"Obligations" means all Loans, and other Indebtedness, advances, debts,
liabilities, obligations, covenants and duties owing by any Borrower Party to
any of the Banks, the Administrative Agent, or any other Person required to be
indemnified, under any Loan Document, including without limitation, to any Bank
in its capacity as a counterparty under any Swap Contract, of any kind or
nature, present or future, whether or not evidenced by any note, guaranty or
other instrument, arising under this Agreement, under any other Loan Document,
whether or not for the payment of money, whether arising by reason of an
extension of credit, loan, guaranty, indemnification or in any other manner,
whether direct or indirect (including those acquired by assignment), absolute or
contingent, due or to become due, now existing or hereafter arising and however
acquired.
"Offshore Rate" means, for each Interest Period for any Offshore Rate
Loan, an interest rate per annum (rounded upward to the nearest 1/100 of one
percent) determined pursuant to the following formula:
Offshore Rate = LIBOR
1.00 - Eurodollar Reserve Percentage
Where,
"Eurodollar Reserve Percentage" means the maximum
reserve percentage (expressed as a decimal rounded upward to
the next 1/100 of one percent) in effect on the date LIBOR for
such Interest Period is determined (whether or not applicable
to any Bank) under regulations issued from time to time by the
Federal Reserve Board for determining the maximum reserve
requirement (including any emergency, supplemental or other
marginal reserve requirement) with respect to Eurocurrency
funding (currently referred to as "Eurocurrency Liabilities")
having a term equal to such Interest Period; and
"LIBOR" means the rate of interest per annum (rounded
upward to the nearest 1/32nd of 1%) notified to the
Administrative Agent by Bank of America as the rate of
interest at which dollar deposits in the approximate amount of
the amount of the Loan to be made or continued as, or
converted into, an Offshore Rate Loan by Bank of America and
having a maturity comparable to such Interest Period would be
offered to major banks in the London interbank market at their
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Cinemark Mexico (USA) Credit Agreement
20
request at or about 11:00 a.m. (London time) on the second
Business Day prior to the commencement of such Interest
Period.
The Offshore Rate shall be adjusted automatically as of the effective date of
any change in the Eurodollar Reserve Percentage.
"Offshore Rate Loan" means a Loan that bears interest based on the
Offshore Rate.
"Operating Lease" means, as applied to any Person, any lease of
Property which is not a Capital Lease.
"Participant" has the meaning specified in Section 10.08(d).
"Permitted Investments" has the meaning specified in Section 7.04.
"Person" means an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture or Governmental Authority.
"Plan" means an employee benefit plan (as defined in Section 3(3) of
ERISA) which Borrower or any member of the Controlled Group sponsors or
maintains or to which Borrower or any member of the Controlled Group makes, is
making or is obligated to make contributions.
"Proforma Cash Flow for Annualized Theatres" means, for any period, the
sum of the proforma Cash Flow for each Annualized Theatre, calculated on an
Annualized Theatre by Annualized Theatre basis in accordance with the formula
set forth in Schedule 1.01.
"Prohibited Action" means any amendment to the Cinemark USA Credit
Agreement or any waiver of any provision thereof (or any event of default that
would otherwise occur) which has not received the prior written consent of
either all Banks hereunder (listed in paragraph (a) below) or the Majority Banks
hereunder (listed in paragraph (b) below):
(a) amendments or waivers under the Cinemark USA Credit Agreement
requiring the consent of all Banks hereunder:
(a) amendments or waivers permitting the total principal
amount of credit extended thereunder to exceed $350,000,000;
(b) amendments or waivers modifying the calculation of the
Cinemark USA Senior Leverage Ratio or the definition of any of the
terms affecting such calculation as in effect on the Closing Date; or
(c) amendments or waivers changing the stated date of the
termination of the "Aggregate Commitment" under and as defined in the
Cinemark USA Credit Agreement to a date earlier than the Maturity Date;
or
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Cinemark Mexico (USA) Credit Agreement
21
(b) amendments or waivers under the Cinemark USA Credit Agreement
requiring the consent of the Majority Banks hereunder:
(x) amendments or waivers permitting the incurrence of
Indebtedness by Cinemark USA which is prohibited by Section 7.5 of the
Cinemark USA Credit Agreement as in effect on the Closing Date;
provided, however, that for purposes of this Agreement any amendments
to the Cinemark USA Credit Agreement that delays or resets the
step-downs in the maximum permitted Total Indebtedness to Annualized
Cash Flow Ratio set forth in Section 7.12 of the Cinemark USA Credit
Agreement shall be deemed consented to by the Majority Banks hereunder
so long as such delay or reset does not increase the maximum permitted
ratio above 6.00 to 1; or
(y) amendments or waivers modifying Section 7.11 of the
Cinemark USA Credit Agreement (prohibiting prepayment of certain senior
subordinated notes), as in effect at the Closing Date;
provided, however, that if a Bank hereunder has consented to any of the
foregoing actions in its capacity as a bank under the Cinemark USA Credit
Agreement, it shall be deemed to have consented to such action in its capacity
as a Bank hereunder for purposes of this Agreement.
"Property" or "Properties" means any estate or interest in any kind of
property or asset, whether real, personal or mixed, and whether tangible or
intangible.
"Pro Rata Share" means, as to any Bank at any time of determination,
the percentage equivalent of such Bank's Commitment divided by the Aggregate
Commitment.
"Purchase Money Obligation" means any Indebtedness secured by a Lien on
assets related to the business of the Borrower its Restricted Subsidiaries, and
any additions and accessions thereto, which are purchased or constructed by the
Borrower or any Restricted Subsidiary of the Borrower at any time after the
Closing Date (excluding the assets of any Person at the time such Person becomes
a Restricted Subsidiary of the Borrower;) provided that (a) the security
agreement, conditional sales or other title retention contract pursuant to which
the Lien on such assets is created (together, for the purposes of this
definition, the "Security Agreement") shall be entered into within 180 calendar
days after the purchase or substantial completion of the construction of such
assets and shall at all times be confined solely to the assets so purchased or
acquired, any additions and accessions thereto and any proceeds therefrom, (b)
at no time shall the aggregate principal amount of the outstanding Indebtedness
secured thereby be increased, except in connection with the purchase of
additions and accessions thereto and except in respect of fees and other
obligations in respect of such Indebtedness, and (c) (i) the aggregate
outstanding principal amount of Indebtedness secured thereby (determined on a
per asset basis in the case of any additions and accessions) shall not at the
time such Security Agreement is entered into exceed 80% of the purchase price to
the Borrower or any Restricted Subsidiary of the Borrower of the assets subject
thereto or (ii) the Indebtedness secured thereby shall be with recourse solely
to the assets so purchased or acquired, any additions and accessions thereto and
any proceeds therefrom; provided further, that if the Borrower or any Restricted
Subsidiary of the
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Cinemark Mexico (USA) Credit Agreement
22
Borrower has entered into a legally binding commitment to execute a Security
Agreement with respect to a specified asset or assets and the Borrower or such
Restricted Subsidiary executes such Security Agreement within 30 calendar days
after the date (for the purposes of this definition, the "commitment date") on
which it entered into such commitment, the Security Agreement shall be deemed to
have been entered into on the commitment date.
"Recapitalization" means the incorporation of Cinemark Holdings and
causing Cinemark Holdings to own 100% of the Capital Stock of Cinemark USA on
the terms and conditions of the material documents executed and to be executed
in connection with the Recapitalization.
"Recapitalization Date" means the date on which the Recapitalization
shall have been fully consummated in accordance with the terms and conditions of
the Recapitalization Agreements.
"Requirement of Law" means, as to any Person, any law (statutory or
common), treaty, rule or regulation or determination of an arbitrator or of a
Governmental Authority, in each case applicable to or binding upon the Person or
any of its property or to which the Person or any of its property is subject.
"Responsible Officer" means the chief executive officer, chief
operating officer or any vice president of Borrower, or any other officer having
substantially the same authority and responsibility; or, with respect to
compliance with financial covenants, the chief financial officer or the
treasurer of Borrower, or any other officer having substantially the same
authority and responsibility.
"Restricted Payment" means (a) the declaration or making of any
dividend payment or other distribution of assets, Properties, cash, rights,
obligations or securities on account of any shares of any class of the Capital
Stock of Borrower or a Restricted Subsidiary, (b) the purchase, redemption or
other acquisition for value of any shares of the Capital Stock of Borrower or
any Subsidiary (other than Wholly-Owned Subsidiaries of Borrower that are
Restricted Subsidiaries) or any warrants, rights or options to acquire such
shares, now or hereafter outstanding, (c) any Investment other than a Permitted
Investment, and (d) the prepayment, repayment, redemption, defeasance or other
acquisition or retirement for value prior to any scheduled maturity, scheduled
repayment or scheduled sinking fund payment, of any Indebtedness of Borrower or
any of its Subsidiaries not otherwise permitted by this Agreement or any Loan
Document to be so paid.
"Restricted Subsidiary" means the Subsidiaries of Borrower listed on
Schedule 5.13 hereto, and any other Subsidiary of Borrower from time to time
designated as a Restricted Subsidiary and consented to by the Majority Banks
(collectively, the "Restricted Subsidiaries") such consent not to be
unreasonably withheld or delayed.
"Solvent" means, as to any Person at any time, that (a) the fair value
of the Property of such Person is greater than the amount of such Person's
liabilities (including disputed, contingent and unliquidated liabilities) as
such value is established and liabilities evaluated for purposes of Section
101(31) of the Bankruptcy Code and, in the alternative, for purposes of the
▇▇▇▇▇▇▇
- ▇▇ -
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (▇▇▇) Credit Agreement
23
Fraudulent Transfer Act; (b) the present fair saleable value of the Property of
such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured; (c) such Person is able to realize upon its Property and pay its debts
and other liabilities (including disputed, contingent and unliquidated
liabilities) as they mature in the normal course of business; (d) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and liabilities
mature; and (e) such Person is not engaged in business or a transaction, and is
not about to engage in business or a transaction, for which such Person's
property would constitute unreasonably small capital.
"Subsidiary" means, with respect to any Person, (a) a corporation a
majority of whose Capital Stock with voting power, under ordinary circumstances,
to elect directors is at the time, directly or indirectly, owned by such Person,
by one or more Subsidiaries of such Person or by such Person and one or more
Subsidiaries thereof, (b) any other Person (other than a corporation) in which
such Person, one or more Subsidiaries thereof or such Person and one or more
Subsidiaries thereof, directly or indirectly, at the date of determination
thereof has at least a majority ownership interest and the power to direct the
policies, management and affairs thereof, or (c) upon designation by Borrower,
and until designation by Borrower to the contrary, a Person, 50% or more of
whose Capital Stock with voting power under ordinary circumstances to elect
directors (or Persons having similar or corresponding powers and
responsibilities) is at the time, directly or indirectly, owned by such Person,
by one or more Subsidiaries of such Person or by such Person and one or more
Subsidiaries thereof (a "50% Entity"). Borrower shall evidence any designation
pursuant to clause (c) of the immediately preceding sentence to the
Administrative Agent by filing with the Administrative Agent within 45 days of
such designation a certificate signed by a Responsible Officer certifying that
such designation has been made.
"Swap Contract" means any agreement, whether or not in writing,
relating to any transaction that is a rate swap, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap or
option, bond, note or ▇▇▇▇ option, interest rate option, forward foreign
exchange transaction, cap, collar or floor transaction, currency swap,
cross-currency rate swap, swaption, currency option or any other, similar
transaction (including any option to enter into any of the foregoing) or any
combination of the foregoing, and, unless the context otherwise clearly
requires, any master agreement relating to or governing any or all of the
foregoing.
"Swap Termination Value" means, in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a) the amount(s) determined as the
▇▇▇▇-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include any Bank.)
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Cinemark Mexico (USA) Credit Agreement
24
"Taxes" has the meaning specified in Section 3.01(a).
"UCC" means the Uniform Commercial Code as in effect in any
jurisdiction.
"Unrestricted Subsidiary" means any Subsidiary of Borrower which is not
a Restricted Subsidiary.
"Wholly-Owned Subsidiary" of any Person means any Subsidiary of such
Person the entire voting share capital of which, other than directors'
qualifying shares if required by applicable law, is owned by such Person (either
directly or indirectly through Wholly-Owned Subsidiaries).
2. OTHER INTERPRETIVE PROVISIONS.
(a) Defined Terms.
Unless otherwise specified herein or therein, all terms defined in this
Agreement shall have the defined meanings when used in any certificate or other
document made or delivered pursuant hereto. The meaning of defined terms shall
be equally applicable to the singular and plural forms of the defined terms.
Terms (including uncapitalized terms) not otherwise defined herein and that are
defined in the UCC shall have the meanings therein described.
(b) Certain Common Terms.
The term "documents" includes any and all instruments, documents,
agreements, certificates, indentures, notices and other writings, however
evidenced. The term "including" is not limiting and means "including without
limitation.
(c) Performance; Time.
Whenever any performance obligation hereunder (other than a payment
obligation) shall be stated to be due or required to be satisfied on a day other
than a Business Day, such performance shall be made or satisfied on the next
succeeding Business Day. In the computation of periods of time from a specified
date to a later specified date, the word "from" means "from and including"; the
words "to" and "until" each mean "to but excluding", and the word "through"
means "to and including." If any provision of this Agreement refers to any
action taken or to be taken by any Person, or which such Person is prohibited
from taking, such provision shall be interpreted to encompass any and all means,
direct or indirect, of taking, or not taking, such action.
(d) Contracts.
Unless otherwise expressly provided herein, references to agreements
and other contractual instruments shall be deemed to include all subsequent
amendments and other modifications thereto, but only to the extent such
amendments and other modifications are not prohibited by the terms of any Loan
Document.
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(e) Laws.
References to any statute or regulation are to be construed as
including all statutory and regulatory provisions consolidating, amending,
replacing, supplementing or interpreting the statute or regulation.
(f) Captions.
The captions and headings of this Agreement are for convenience of
reference only and shall not affect the interpretation of this Agreement.
(g) Independence of Provisions.
The parties acknowledge that this Agreement and other Loan Documents
may use several different limitations, tests or measurements to regulate the
same or similar matters, and that such limitations, tests and measurements are
cumulative and must each be performed, except as expressly stated to the
contrary in this Agreement.
(h) Accounting Principles.
Unless the context otherwise clearly requires, all accounting terms not
expressly defined herein shall be construed, and all financial computations
required under this Agreement shall be made, in accordance with GAAP,
consistently applied.
SECTION 2. THE CREDITS
1. AMOUNTS AND TERMS OF COMMITMENTS.
Each Bank severally agrees, on the terms and conditions hereinafter set
forth, to make Loans from time to time on any Business Day during the period
from the Closing Date to the Maturity Date, in an aggregate amount not to exceed
at any time outstanding the amount set forth opposite such Bank's name in
Schedule 2.01 under the heading "Commitment" (such amount as the same may be
reduced pursuant to Section 2.06 or as a result of one or more assignments
pursuant to Section 10.08, such Bank's "Commitment"); provided, however, that,
after giving effect to any Borrowing of Loans, the aggregate principal amount of
all outstanding Loans shall not at any time exceed the Aggregate Commitment;
provided, further, that the aggregate principal amount of the Loans of any Bank
shall not at any time exceed such Bank's Commitment. Within the limits of each
Bank's Commitment, and subject to the other terms and conditions hereof,
Borrower may borrow under this Section 2.01, prepay pursuant to Section 2.07 and
reborrow pursuant to this Section 2.01.
2. LOAN ACCOUNTS AND NOTES.
(a) Subject to Section 2.02(b), the Loans made by each Bank and the fees
due hereunder shall be evidenced by one or more loan accounts or records
maintained by such Bank in the ordinary course of business. The loan accounts or
records maintained by the Administrative Agent and each Bank shall be conclusive
absent manifest error of the amount of the Loans made by the Banks to Borrower
and the interest and payments thereon and fees due hereunder. Any failure so to
record or any error in doing so shall not,
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Cinemark Mexico (USA) Credit Agreement
26
however, limit or otherwise affect the obligation of Borrower hereunder to pay
any amount owing with respect to the Loans or such fees.
(b) Upon the request of any Bank made through the Administrative Agent,
the Loans made by such Bank may be evidenced by one or more Notes, instead of
loan accounts. Each such Bank may endorse on the schedules annexed to its
Note(s), the date, amount and maturity of each Loan made by it and the amount of
each payment of principal made by Borrower with respect thereto. Each such Bank
is irrevocably authorized by Borrower to endorse its Note(s) and each Bank's
record shall be conclusive absent manifest error; provided, however, that the
failure of a Bank to make, or an error in making, a notation thereon with
respect to any Loan shall not limit or otherwise affect the obligations of
Borrower hereunder or under any such Note to such Bank.
3. PROCEDURE FOR BORROWING.
(a) Each Borrowing shall be made upon irrevocable written notice in the
form of a Notice of Borrowing, which notice must be received by the
Administrative Agent prior to 9:00 a.m. (California time) (i) three Business
Days prior to the requested Borrowing Date, in the case of Offshore Rate Loans;
and (ii) one Business Day prior to the requested Borrowing Date, in the case of
Base Rate Loans, specifying: (i) the amount of the Borrowing, which, in the case
of a borrowing of Offshore Rate Loans, shall be in an aggregate minimum
principal amount of $1,000,000 and any multiple of $250,000 in excess thereof,
and in the case of a borrowing of Base Rate Loans, shall be in an aggregate
minimum principal amount of $500,000 and any multiple of $200,000 in excess
thereof; (ii) the requested Borrowing Date, which shall be a Business Day; (iii)
whether the Borrowing is to be comprised of Offshore Rate Loans, Base Rate Loans
or any combination thereof; and (iv) the duration of the Interest Period
applicable to Offshore Rate Loans included in such notice. If the Notice of
Borrowing shall fail to specify the duration of the Interest Period for any
Borrowing comprised of Offshore Rate Loans, such Interest Period shall be one
month; provided, however, that with respect to the Borrowing to be made on the
Closing Date, the Notice of Borrowing shall be delivered to the Administrative
Agent not later than 9:00 a.m. (California time) one Business Day before the
Closing Date and such Borrowing will consist of Base Rate Loans only; provided,
further, that if so requested by the Administrative Agent, all Borrowings during
the first 60 days following the Closing Date shall have the same Interest Period
and shall be Base Rate or Offshore Rate Loans for Interest Periods no longer
than one month.
(b) Promptly after receipt of a Notice of Borrowing, the Administrative
Agent shall notify each Bank of the proposed Borrowing. Each Bank shall make
available to the Administrative Agent its Pro Rata Share of the amount (if any)
by which the principal amount of the proposed Borrowing exceeds the principal
amount of the Loans (if any) being repaid on the Borrowing Date, in immediately
available funds, by remitting such funds to: Bank of America National Trust and
Savings Association, ABA No. ▇▇▇-▇▇▇-▇▇▇, Attn: Agency Administrative Services
#5596 For credit to: ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇.
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▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (▇▇▇) Credit Agreement
27
12332-16503, Reference: Cinemark Mexico (USA), Inc., no later than 11:00 a.m.
(California time) on the Borrowing Date. Upon satisfaction of the conditions set
forth in Section 4.02, the Administrative Agent shall make available to Borrower
in like funds on such Borrowing Date the aggregate of the amounts (if any) so
made available by the Banks by causing an amount equal to such aggregate amount
(if any) received by the Administrative Agent to be credited to the account of
Borrower as specified by Borrower in writing. If the conditions set forth in
Section 4.02 are not satisfied, the Administrative Agent shall promptly return
such funds to the Banks making the same available.
(c) Unless the Majority Banks shall otherwise agree, during the existence
of an Event of Default, Borrower may not elect to have a Loan be made as an
Offshore Rate Loan.
4. CONVERSION AND CONTINUATION ELECTIONS.
(a) Borrower may (i) elect to convert on any Business Day, any Base Rate
Loans (or any part thereof in an amount not less than $1,000,000 or an integral
multiple of $250,000 in excess thereof) into Offshore Rate Loans; (ii) elect to
convert on the last day of the Interest Period therefor, any Offshore Rate Loans
(or any part thereof in an amount not less than $500,000 or an integral multiple
of $200,000 in excess thereof) into Base Rate Loans; or (iii) elect to continue,
on the last day of the Interest Period therefor, any Offshore Rate Loans (or any
part thereof in an amount not less than $1,000,000 or an integral multiple of
$250,000 in excess thereof); provided, that if the aggregate amount of Offshore
Rate Loans shall have been reduced, by payment, prepayment, or conversion of
part thereof to be less than $1,000,000, Offshore Rate Loans shall automatically
convert into Base Rate Loans.
(b) Each conversion or continuation shall be made upon irrevocable written
notice in the form of a Notice of Conversion/Continuation, which notice must be
received by the Administrative Agent prior to 9:00 a.m. (California time) (i)
three Business Days in advance of the Conversion/Continuation Date, if the Loans
are to be converted into or continued as Offshore Rate Loans; and (ii) one
Business Day prior to the Conversion/Continuation Date, if the Loans are to be
converted into Base Rate Loans, in each case specifying: (A) the proposed
Conversion/Continuation Date; (B) the aggregate amount of Loans to be converted
or continued; (C) the nature of the proposed conversion or continuation; and (D)
if applicable, the duration of the requested Interest Period.
(c) If upon the expiration of any Interest Period applicable to Offshore
Rate Loans, Borrower has failed to select a new Interest Period to be applicable
thereto, or if any Event of Default shall then exist, Borrower shall be deemed
to have elected to convert such Offshore Rate Loans into Base Rate Loans
effective as of the expiration date of such current Interest Period.
(d) Upon receipt of a Notice of Conversion/Continuation, the
Administrative Agent will promptly notify each Bank thereof, or, if no timely
notice is provided by Borrower, the
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28
Administrative Agent will promptly notify each Bank of the details of any
automatic conversion. All conversions and continuations shall be made pro rata
according to the respective outstanding principal amounts of the Loans with
respect to which the notice was given held by each Bank.
(e) Unless the Majority Banks shall otherwise agree, during the existence
of an Event of Default, Borrower may not elect to have a Loan converted into or
continued as an Offshore Rate Loan.
5. LIMITATION ON INTEREST PERIODS. Notwithstanding any other provision
contained in this Agreement, after giving effect to any Borrowing or conversion
or continuation of any Loans, there shall not be more than 10 different Interest
Periods for Loans in effect without the consent of the Administrative Agent and
the Majority Banks.
6. TERMINATION OR REDUCTION OF AGGREGATE COMMITMENT.
(a) Voluntary Termination or Reduction. Borrower may, upon not less than
one Business Day's prior written notice to the Administrative Agent, terminate
the Aggregate Commitment or permanently reduce the Aggregate Commitment by an
aggregate minimum amount of $1,000,000 or any multiple thereof; provided that no
such reduction or termination shall be permitted if, after giving effect thereto
and to any prepayments of the Loans made on the effective date thereof, the then
outstanding principal amount of the Loans would exceed the Aggregate Commitment
then in effect and, provided, further, that once reduced in accordance with this
Section 2.06, the Aggregate Commitment may not be increased.
(b) Automatic Reduction of Aggregate Commitment. Upon a Change of Control,
the Aggregate Commitment shall be automatically and concurrently reduced to
zero.
(c) General. All accrued commitment fees to, but not including the
effective date of the reduction or termination of the Aggregate Commitment,
shall be paid on the effective date of the reduction or termination. Any
reduction of the Aggregate Commitment shall be applied to each Bank's Commitment
in accordance with such Bank's Pro Rata Share.
7. OPTIONAL PREPAYMENTS. Subject to Section 3.04, Borrower may, at any
time or from time to time, upon written notice, which notice must be received by
the Administrative Agent at least (a) three Business Days prior to any
prepayment of Offshore Rate Loans; and (b) on the Business Day of the prepayment
of any Base Rate Loans, ratably prepay Loans in whole or in part, in amounts of
(i) with respect to Offshore Rate Loans, $250,000 or any multiple thereof in
excess thereof, and (ii) with respect to Base Rate Loans, $200,000 or any
integral multiple of $200,000 in excess thereof. Such notice of prepayment shall
specify the date and amount
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29
of such prepayment and whether such prepayment is of Base Rate Loans or Offshore
Rate Loans, or any combination thereof. Such notice shall not thereafter be
revocable by Borrower, and the Administrative Agent will promptly notify each
Bank of such Bank's Pro Rata Share of such prepayment. If such notice is given
by Borrower, Borrower shall make such prepayment and the payment amount
specified in such notice shall be due and payable on the date specified therein,
together with accrued interest in the case of Offshore Rate Loans to each such
date on the amount prepaid and any amounts required pursuant to Section 3.04.
8. MATURITY DATE. All principal and accrued and unpaid interest on all
Loans shall be due on the Maturity Date.
9. INTEREST.
(a) Subject to Section 2.09(c) and (d), each Loan shall bear interest on
the outstanding principal amount thereof from the date when made until it
becomes due at a rate per annum equal to the Offshore Rate or the Base Rate, as
the case may be, plus the Applicable Amount.
(b) Interest on each Loan shall be paid in arrears on each Interest Payment
Date. Interest shall also be paid on the date of any prepayment of Offshore Rate
Loans pursuant to Section 2.07 for the portion of the Loans so prepaid and upon
payment (including prepayment) in full thereof and, during the existence of any
Event of Default, interest shall be paid on demand.
(c) Subject to Section 2.09(d), during the continuation of any Event of
Default or after acceleration pursuant to Section 8.02, Borrower shall pay
interest (after as well as before entry of judgment thereon to the extent
permitted by law) on the principal amount of all Obligations due and unpaid, at
a rate per annum which is determined by adding 2% per annum to the Applicable
Amount then in effect for such Loans and, in the case of Obligations not subject
to an Applicable Amount, at a rate per annum equal to the Base Rate plus the
Applicable Amount plus 2%; provided, however, that, on and after the expiration
of any Interest Period applicable to any Offshore Rate Loan outstanding on the
date of occurrence of such Event of Default or acceleration, the principal
amount of such Loan shall, during the continuation of such Event of Default or
after acceleration, bear interest at a rate per annum equal to the Base Rate
plus the Applicable Amount plus 2%.
(d) It is the intention of the parties hereto to comply with applicable
usury laws (now or hereafter enacted); accordingly, notwithstanding any
provision to the contrary in this Agreement, any Notes, the other Loan
Documents, or any other document relating hereto, in no event shall this
Agreement or any such other document require the payment or permit the
collection of interest in excess of the maximum amount permitted by such laws.
If for any circumstances whatsoever, fulfillment of any provision of any Loan
Document shall involve transcending the limit of validity prescribed by law for
the
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Cinemark Mexico (USA) Credit Agreement
30
collection or charging of interest, then, ipso facto, the obligation to be
fulfilled shall be reduced to the limit of such validity, and if for any such
circumstances a Bank shall ever receive anything of value as interest or deemed
interest by applicable law under this Agreement, any Notes, the other Loan
Documents, or any other document pertaining hereto or otherwise an amount that
would exceed the highest lawful rate, such amount that would be excessive
interest shall be applied to the reduction of the principal amount owing
hereunder and under any Notes or on account of any other indebtedness of
Borrower to the Administrative Agent and the Banks, and not to the payment of
interest, or if such excessive interest exceeds the unpaid balance of principal
of such indebtedness, such excess shall be refunded to Borrower. In determining
whether or not the interest paid or payable with respect to any indebtedness of
Borrower to the Administrative Agent and the Banks, under any specific
contingency, exceeds the highest lawful rate, Borrower and the Administrative
Agent and the Banks shall, to the maximum extent permitted by applicable law,
(a) characterize any non-principal payment as an expense, fee or premium rather
than as interest, (b) exclude voluntary prepayments and the effects thereof, (c)
amortize, prorate, allocate and spread the total amount of interest throughout
the term of such indebtedness so that the actual rate of interest on account of
such indebtedness does not exceed the maximum amount permitted by applicable
law, and/or (d) allocate interest between portions of such indebtedness to the
end that no such portion shall bear interest at a rate greater than that
permitted by applicable law.
For purpose of this Section 2.09(d), the term "applicable law" means
the internal laws of the State of New York, but, to the extent, contrary to the
express intent of the parties, New York law is found to be inapplicable to this
Agreement, then "applicable law" also means that law in effect from time to time
and applicable to this loan transaction which lawfully permits the charging and
collection of the highest permissible, lawful, non-usurious rate of interest on
such loan transaction and this Agreement, and, to the extent controlling, laws
of the United States of America. It is intended that, in the event that,
notwithstanding the parties' express choice of New York law to be applicable to
this Agreement, if the laws of the State of Texas are included in determining
applicable law, Chapters 302 and 303 of the Texas Finance Code shall be included
in any such determination, and that, for the purpose of applying Chapters 302
and 303 of the Texas Finance Code to this Agreement, the highest lawful rate
shall be the "weekly ceiling" (as defined in Section 303.2 of the Texas Finance
Code). Any Bank may, from time to time, as to current and future balances,
implement any other ceiling under Chapter 303 of the Texas Finance Code by
notice to Borrower, if and to the extent, permitted by Chapter 303 of the Texas
Finance Code. Borrower expressly agrees that, pursuant to Section 346.004 of the
Texas Finance Code, Chapter 346 of the Texas Finance Code shall not apply to
this Agreement or to any Loan and neither this Agreement nor any Loan shall be
governed by or subject to the provision of Chapter 346 of the Texas Finance Code
in any manner whatsoever.
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31
10. FEES.
(a) Arrangement Fee. Borrower shall pay to Bank of America and BankBoston,
N.A. an arrangement fee in an amount and at the time set forth in a letter
agreement among Borrower and such Banks.
(b) Commitment Fees. Borrower shall pay to the Administrative Agent for
the account of each Bank a commitment fee on the average daily unused portion of
such Bank's Commitment, computed on a quarterly basis in arrears on the last
Business Day of each calendar quarter based upon the actual daily utilization
for that quarter as calculated by the Administrative Agent, at a rate per annum
specified for "Commitment Fee" in the definition of Applicable Amount Such
commitment fee shall accrue from the Closing Date to the Maturity Date and shall
be due and payable quarterly in arrears on the last Business Day of each quarter
commencing December 31, 1998, with the final payment to be made on the Maturity
Date; provided that, in connection with the termination or reduction of the
Aggregate Commitment pursuant to Section 2.06, the accrued commitment fee
calculated for the period ending on such date shall also be paid on the date of
the termination or reduction on the amount by which the Aggregate Commitment is
reduced. The commitment fees provided in this Section shall accrue at all times
after the above-mentioned commencement date, including at any time during which
one or more conditions in Section 4.02 are not met.
(c) Agency Fee. Borrower shall pay to the Administrative Agent for the
Administrative Agent's own account an agency fee in the amount and at the times
as agreed upon in writing between Borrower and the Administrative Agent.
11. COMPUTATION OF FEES AND INTEREST.
(a) All computations of interest payable in respect of Base Rate Loans at
all times as the Base Rate is determined by Bank of America's "reference rate"
shall be made on the basis of a year of 365 or 366 days, as the case may be, and
actual days elapsed. All other computations of fees and interest under this
Agreement shall be made on the basis of a 360- day year and actual days elapsed,
which results in more interest being paid than if computed on the basis of a
365-day year. Interest and fees shall accrue during each period during which
interest or such fees are computed from the first day thereof to the last day
thereof.
(b) The Administrative Agent will, with reasonable promptness, notify
Borrower and the Banks of each determination of an Offshore Rate; provided that
any failure to do so shall not relieve Borrower of any liability hereunder or
provide the basis for any claim against the Administrative Agent. Any change in
the interest rate on a Loan resulting from a change in the Applicable Amount or
Eurodollar Reserve Percentage shall become effective as of the opening of
business on the day on which such change in the Applicable Amount or Eurodollar
Reserve Percentage becomes effective. The Administrative Agent
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32
will with reasonable promptness notify Borrower and the Banks of the effective
date and the amount of each such change, provided that any failure to do so
shall not relieve Borrower of any liability hereunder or provide the basis for
any claim against the Administrative Agent.
(c) Any change in the interest rate on a Loan resulting from a change in
the Applicable Amount or Eurodollar Reserve Percentage shall become effective as
of the opening of business on the day on which such change in the Applicable
Amount or Eurodollar Reserve Percentage becomes effective. Each determination of
an interest rate by the Administrative Agent pursuant hereto shall be conclusive
and binding on Borrower and the Banks in the absence of manifest error.
12. PAYMENTS BY BORROWER.
(a) All payments of principal, interest and fees hereunder shall be in
immediately available funds and delivered to the Administrative Agent for credit
to:
Bank of America National Trust
and Savings Association
Att: Agency Administrative Services #5596
ABA No. ▇▇▇-▇▇▇-▇▇▇
Bancontrol Account No. 12332-16503
Reference: Cinemark Mexico (USA), Inc.
not later than 11:00 A.M. (California time) on the date due; funds received by
the Administrative Agent after that time shall be deemed to have been paid by
Borrower on the next succeeding Business Day.
(b) Whenever any payment hereunder shall be stated to be due on a day
other than a Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of interest or fees, as the case may be; subject to the provisions
set forth in the definition of "Interest Period" herein.
(c) Unless the Administrative Agent shall have received notice from
Borrower prior to the date on which any payment is due to the Banks hereunder
that Borrower will not make such payment in full as and when required hereunder,
the Administrative Agent may assume that Borrower has made such payment in full
to the Administrative Agent on such date in immediately available funds and the
Administrative Agent may (but shall not be so required), in reliance upon such
assumption, cause to be distributed to each Bank on such due date an amount
equal to the amount then due such Bank. If and to the extent Borrower shall not
have made such payment in full to the Administrative Agent, each Bank shall
repay to the Administrative Agent on demand such amount distributed to such
Bank, together with interest thereon for each day from the date such amount is
distributed to
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33
such Bank until the date such Bank repays such amount to the Administrative
Agent, at the Federal Funds Rate as in effect for each such day.
13. PAYMENTS BY THE BANKS TO THE ADMINISTRATIVE AGENT.
(a) Unless the Administrative Agent shall have received notice from a Bank
on the Closing Date or, with respect to each Borrowing after the Closing Date,
by 9:30 a.m. (California time) (i) one Business Day prior to the date of any
proposed Borrowing of Offshore Rate Loans, or (ii) on the date of any proposed
Borrowing of Base Rate Loans that such Bank will not make available to the
Administrative Agent as and when required hereunder for the account of Borrower
the amount of that Bank's Pro Rata Share of the Borrowing, the Administrative
Agent may assume that each Bank has made such amount available to the
Administrative Agent in immediately available funds on the Borrowing date and
the Administrative Agent may (but shall not be so required), in reliance upon
such assumption, make available to Borrower on such date a corresponding amount.
If and to the extent any Bank shall not have made its full amount available to
the Administrative Agent in immediately available funds and the Administrative
Agent in such circumstances has made available to Borrower such amount, that
Bank shall on the next Business Day following the date of such Borrowing make
such amount available to the Administrative Agent, together with interest at the
Federal Funds Rate for and determined as of each day during such period. A
notice of the Administrative Agent submitted to any Bank with respect to amounts
owing under this Section 2.13(a) shall be conclusive, absent manifest error. If
such amount is so made available, such payment to the Administrative Agent shall
constitute such Bank's Loan on the date of Borrowing for all purposes of this
Agreement. If such amount is not made available to the Administrative Agent on
the next Business Day following the date of such Borrowing, the Administrative
Agent shall notify Borrower of such failure to fund and, upon demand by the
Administrative Agent, Borrower shall pay such amount to the Administrative Agent
for the Administrative Agent's account, together with interest thereon for each
day elapsed since the date of such Borrowing, at a rate per annum equal to the
interest rate applicable at the time to the Loans comprising such Borrowing.
(b) The failure of any Bank to make any Loan on any date of borrowing shall
not relieve any other Bank of any obligation hereunder to make a Loan on the
date of such Borrowing, but no Bank shall be responsible for the failure of any
other Bank to make the Loan to be made by such other Bank on the date of any
Borrowing.
14. SHARING OF PAYMENTS, ETC.
If, other than as expressly provided elsewhere herein, any Bank shall
obtain on account of the Loans made by it any payment (whether voluntary,
involuntary, through the exercise of any right of set-off, or otherwise) in
excess of its Pro Rata Share of payments on account of the Loans obtained by all
the Banks, such Bank shall forthwith (a) notify the Administrative Agent of such
fact, and (b) purchase from the other Banks such participations in the Loans
made by them as shall be necessary to cause such purchasing
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34
Bank to share the excess payment ratably with each of them; provided, however,
that if all or any portion of such excess payment is thereafter recovered from
the purchasing Bank, such purchase shall to that extent be rescinded and each
other Bank shall repay to the purchasing Bank the purchase price paid therefor,
together with an amount equal to such paying Bank's Pro Rata Share (according to
the proportion of (i) the amount of such paying Bank's required repayment to
(ii) the total amount so recovered from the purchasing Bank) of any interest or
other amount paid or payable by the purchasing Bank in respect of the total
amount so recovered. Borrower agrees that any Bank so purchasing a participation
from another Bank pursuant to this Section 2.14 may, to the fullest extent
permitted by law, exercise all its rights of payment (including the right of
set-off, but subject to Section 10.09) with respect to such participation as
fully as if such Bank were the direct creditor of Borrower in the amount of such
participation. The Administrative Agent will keep records (which shall be
conclusive and binding in the absence of manifest error) of participations
purchased pursuant to this Section 2. 14 and will in each case notify the Banks
following any such purchases or repayments.
15. CINEMARK USA GUARANTY.
All Obligations shall be guarantied in accordance with the Cinemark USA
Guaranty.
SECTION 3. TAXES, YIELD PROTECTION AND ILLEGALITY
1. TAXES.
(a) Subject to Section 3.01(g), any and all payments by any Borrower Party
to each Bank or the Administrative Agent under this Agreement shall be made free
and clear of, and without deduction or withholding for, any and all present or
future taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding, in the case of each Bank and the
Administrative Agent, such taxes (including income taxes or franchise taxes) as
are imposed on or measured by each Bank's net income by the jurisdiction under
the laws of which such Bank or the Administrative Agent, as the case may be, is
organized or maintains a Lending Office or any political subdivision thereof
(all such non-excluded taxes, levies, imposts, deductions, charges, withholdings
and liabilities being hereinafter referred to as "Taxes").
(b) In addition, Borrower shall pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies which arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement or any
other Loan Documents (hereinafter referred to as "Other Taxes").
(c) Subject to Section 3.01(g), Borrower shall indemnify and hold harmless
each Bank and the Administrative Agent for the full amount of Taxes or Other
Taxes (including any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section 3.01) paid by such Bank or the Administrative Agent
and any liability (including
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Cinemark Mexico (USA) Credit Agreement
35
penalties, interest, additions to tax and expenses) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted, provided that, in the case of penalties, interest, additions
to tax and expenses, such Bank or the Administrative Agent has timely notified
Borrower after it has been notified of its liability for such amounts. Payment
under this indemnification shall be made within 30 days from the date the Bank
or the Administrative Agent makes written demand therefor.
(d) If any Borrower Party shall be required by law to deduct or withhold
any Taxes or Other Taxes from or in respect of any sum payable hereunder to any
Bank or the Administrative Agent, then, subject to Section 3.01(g): (i) the sum
payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 3.01) such Bank or the Administrative Agent, as the case may be,
receives an amount equal to the sum it would have received had no such
deductions been made; (ii) such Borrower Party shall make such deductions, and
(iii) Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law.
(e) Within 30 days after the date of any payment by any Borrower Party of
Taxes or Other Taxes, Borrower shall furnish to the Administrative Agent the
original or a certified copy of a receipt evidencing payment thereof, or other
evidence of payment reasonably satisfactory to the Administrative Agent.
(f) Each Bank which is a foreign person (i.e., a person other than a
United States person for United States Federal income tax purposes) agrees that:
(i) it shall, no later than the Closing Date (or, in the case of a Bank which
becomes a party hereto pursuant to Section 10.08 after the Closing Date, the
date upon which the Bank becomes a party hereto) deliver to the Administrative
Agent and Borrower through the Administrative Agent two accurate and complete
signed originals of Internal Revenue Service Form 4224 or any successor thereto
("Form 4224"), or two accurate and complete signed originals of Internal Revenue
Service Form 1001 or any successor thereto ("Form 1001"), as appropriate, in
each case indicating that the Bank is on the date of delivery thereof entitled
to receive payments of principal, interest and fees under this Agreement free
from withholding of United States Federal income tax; (ii) if at any time the
Bank makes any changes necessitating a new Form 4224 or Form 1001, it shall with
reasonable promptness deliver to the Administrative Agent and Borrower through
the Administrative Agent in replacement for, or in addition to, the forms
previously delivered by it hereunder, two accurate and complete signed originals
of Form 4224; or two accurate and complete signed originals of Form 1001, as
appropriate, in each case indicating that the Bank is on the date of delivery
thereof entitled to receive payments of principal, interest and fees under this
Agreement free from withholding of United States Federal income tax; (iii) it
shall, before or promptly after the occurrence of any event (including the
passing of time but excluding any event mentioned in (ii) above) requiring a
change in or renewal of the most recent Form 4224 or Form 1001 previously
delivered by such Bank, deliver to the Administrative Agent and Borrower through
the Administrative Agent two accurate and complete original signed
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Cinemark Mexico (USA) Credit Agreement
36
copies of Form 4224 or Form 1001 in replacement for the forms previously
delivered by the Bank; and (iv) it shall, promptly upon Borrower's or the
Administrative Agent's reasonable request to that effect, deliver to Borrower or
the Administrative Agent (as the case may be) such other forms or similar
documentation as may be required from time to time by any applicable law,
treaty, rule or regulation in order to establish such Bank's tax status for
withholding purposes.
(g) Borrower will not be required to pay any additional amounts in respect
of United States Federal income tax pursuant to Section 3.01(d) to any Bank for
the account of any Lending Office of such Bank or to indemnify any Bank pursuant
to Section 3.01(c): (i) if the obligation to pay such additional amounts would
not have arisen but for a failure by such Bank to comply with its obligations
under Section 3.01(f) in respect of such Lending Office; (ii) if such Bank shall
have delivered to Borrower a Form 4224 in respect of such Lending Office
pursuant to Section 3.01(f), and such Bank at any time shall not be entitled to
exemption from deduction or withholding of United States Federal income tax in
respect of payments by Borrower hereunder for the account of such Lending Office
for any reason other than a change in United States law or regulations or in the
official interpretation of such law or regulations by any governmental authority
charged with the interpretation or administration thereof (whether or not having
the force of law) after the date of delivery of such Form 4224; or (iii) if the
Bank shall have delivered to Borrower a Form 1001 in respect of such Lending
Office pursuant to Section 3.01(f), and such Bank at any time shall not be
entitled to exemption from deduction or withholding of United States Federal
income tax in respect of payments by Borrower hereunder for the account of such
Lending Office for any reason other than a change in United States law or
regulations or any applicable tax treaty or regulations or in the official
interpretation of any such law, treaty or regulations by any governmental
authority charged with the interpretation or administration thereof (whether or
not having the force of law) after the date of delivery of such Form 1001.
(h) If, at any time, Borrower requests any Bank to deliver any forms or
other documentation pursuant to Section 3.01(f)(iv), then Borrower shall, on
demand of such Bank through the Administrative Agent, reimburse such Bank for
any costs and expenses (including reasonable expenses of outside legal counsel
and the reasonable allocated costs of in-house counsel) reasonably incurred by
such Bank in the preparation or delivery of such forms or other documentation.
(i) If Borrower is required to pay additional amounts to any Bank or the
Administrative Agent pursuant to Section 3.01(d), then such Bank shall use its
reasonable best efforts (consistent with legal and regulatory restrictions) to
change the jurisdiction of its Lending Office so as to eliminate any such
additional payment by Borrower which may thereafter accrue if such change in the
judgment of such Bank is not otherwise disadvantageous to such Bank.
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Cinemark Mexico (USA) Credit Agreement
37
2. ILLEGALITY.
(a) If any Bank shall reasonably determine that the introduction of any
Requirement of Law, or any change in any Requirement of Law or in the
interpretation or administration thereof, has made it unlawful, or that any
central bank or other Governmental Authority has asserted that it is unlawful,
for any Bank or its Lending Office to make Offshore Rate Loans, then, on notice
thereof by the Bank to Borrower through the Administrative Agent, the obligation
of that Bank to make Offshore Rate Loans shall be suspended until the Bank shall
have notified the Administrative Agent and Borrower that the circumstances
giving rise to such determination no longer exists.
(b) If a Bank shall determine that it is unlawful to maintain any Offshore
Rate Loan, Borrower shall be deemed to have converted in full all Offshore Rate
Loans of that Bank then outstanding into Base Rate Loans either on the last day
of the Interest Period thereof if the Bank may lawfully continue to maintain
such Offshore Rate Loans to such day, or immediately, if the Bank may not
lawfully continue to maintain such Offshore Rate Loans. At the time of
conversion, Borrower shall pay all interest accrued thereon, together with any
amounts required to be paid in connection therewith pursuant to Section 3.04.
(c) If the obligation of any Bank to make or maintain Offshore Rate Loans
has been terminated, Borrower may elect, by giving notice to the Bank through
the Administrative Agent that all Loans which would otherwise be made by the
Bank as, or converted into, Offshore Rate Loans shall be instead Base Rate
Loans.
(d) Before giving any notice to the Administrative Agent pursuant to this
Section 3.02, the affected Bank shall designate a different Lending Office with
respect to its Offshore Rate Loans if such designation will avoid the need for
giving such notice or making such demand and will not, in the judgment of the
Bank, be illegal or otherwise disadvantageous to the Bank.
3. INCREASED COSTS AND REDUCTION OF RETURN.
(a) If any Bank shall reasonably determine that, due to either (i) the
introduction of or any change in or in the interpretation of any law or
regulation or (ii) the compliance with any guideline or request of general
applicability from any central bank or other Governmental Authority (whether or
not having the force of law), there shall be any increase in the cost to such
Bank of agreeing to make or making, funding or maintaining any Offshore Rate
Loans (except for changes in the rate of tax on the overall net income of such
Bank imposed by the jurisdiction in which such Bank's principal executive office
or Lending Office is located), then Borrower shall be liable for, and shall from
time to time, upon demand therefor by such Bank (with a copy of such demand to
the Administrative Agent), pay to such Bank, additional amounts as are
sufficient to compensate such Bank for such increased costs.
(b) If any Bank shall have reasonably determined that the introduction of
any applicable law, rule, regulation or guideline of general applicability
regarding capital adequacy, or any change therein or any change in the
interpretation or administration
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Cinemark Mexico (USA) Credit Agreement
38
thereof by any central bank or other Governmental Authority charged with the
interpretation or administration thereof, or compliance by the Bank (or its
Lending Office) or any corporation controlling the Bank, with any request,
guideline or directive of general applicability regarding capital adequacy
(whether or not having the force of law) of any such central bank or other
authority issued after the date hereof, affects or would affect the amount of
capital required or expected to be maintained by the Bank or any corporation
controlling the Bank and (taking into consideration such Bank's or such
corporation's policies with respect to capital adequacy and such Bank's desired
return on capital) determines that the amount of such Bank's capital is
increased as a consequence of its obligations hereunder, then, upon demand of
such Bank, Borrower shall immediately pay to the Bank, from time to time as
specified by the Bank, additional amounts sufficient to compensate the Bank for
such increase.
4. FUNDING LOSSES.
Borrower agrees to reimburse each Bank and to hold each Bank harmless
from any loss or expense which the Bank may sustain or incur (excluding the loss
of anticipated profits) from the liquidation or reemployment of funds obtained
by it to maintain its Offshore Rate Loans hereunder or from fees payable to
terminate the deposits from which such funds were obtained as a consequence of:
(a) the failure of Borrower to make any prepayment of principal of any Offshore
Rate Loan or to make any payment after any acceleration thereof; (b) the failure
of Borrower to borrow or continue an Offshore Rate Loan or convert a Base Rate
Loan to an Offshore Rate Loan after Borrower has given (or is deemed to have
given) a Notice of Borrowing or a Notice of Conversion/Continuation; (c) the
failure of Borrower to make any prepayment of an Offshore Rate Loan after
Borrower has given a notice in accordance with Section 2.07; or (d) the
prepayment of an Offshore Rate Loan on a day which is not the last day of the
Interest Period with respect thereto. Solely for purposes of calculating amounts
payable by Borrower to the Banks under this Section 3.04, each Offshore Rate
Loan made by a Bank (and each related reserve, special deposit or similar
requirement) shall be conclusively deemed to have been funded at the LIBOR (as
defined in the definition of "Offshore Rate") used in determining the Offshore
Rate for such Offshore Rate Loan by a matching deposit or other borrowing in the
interbank eurodollar market for a comparable amount and for a comparable period,
whether or not such Offshore Rate Loan is in fact so funded.
5. INABILITY TO DETERMINE RATES.
If the Administrative Agent shall have determined that for any reason
adequate and reasonable means do not exist for ascertaining the Offshore Rate
for any requested Interest Period with respect to a proposed Offshore Rate Loan
or if the Majority Banks advise the Administrative Agent that the Offshore Rate
applicable for any requested Interest Period with respect to a proposed Offshore
Rate Loan does not adequately and fairly reflect the cost to them of funding
such Loan, they shall notify the Administrative Agent who will forthwith give
notice of such determination to Borrower and each Bank. Thereafter, the
obligation of the Banks to make Offshore Rate Loans hereunder shall be suspended
until the Administrative Agent upon the instruction of the Majority Banks
revokes such notice
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Cinemark Mexico (USA) Credit Agreement
39
in writing. Upon receipt of such notice, Borrower may revoke any Notice of
Borrowing or a Notice of Conversion/Continuation then submitted by it. If
Borrower does not revoke such notice with respect to Loans, the Banks shall
make, convert or continue the Loans, as proposed by Borrower, in the amount
specified in the applicable notice submitted by Borrower, but such Loans shall
be made, converted or continued as Base Rate Loans instead of Offshore Rate
Loans.
6. SURVIVAL.
The agreements and obligations of Borrower in this Section 3 shall
survive the payment of all other Obligations. Any claim or demand by any Bank
for reimbursement or compensation under this Section 3 must be made in writing;
provided, however, that no such claim or demand may be made in respect of any
expense, cost, or economic loss incurred or suffered more than 12 months prior
to the date of such claim or demand.
SECTION 4. CONDITIONS PRECEDENT
1. CONDITIONS OF INITIAL LOANS.
The obligation of each Bank to make its initial Loan hereunder is
subject to the condition that the Administrative Agent shall have received on or
before the Closing Date all of the following, in form and substance satisfactory
to the Administrative Agent and each Bank and in sufficient copies for each
Bank:
(a) Credit Agreement and Notes. This Agreement duly executed and delivered
by Borrower, the Administrative Agent and each of the Banks and, if requested by
any Bank pursuant to Section 2.02(b), the Note(s) for such Bank executed by
Borrower.
(b) Resolutions; Incumbency.
(i) Copies of the resolutions of the Board of
Directors or the executive committee of Borrower and Cinemark
USA approving and authorizing the execution, delivery and
performance by Borrower and Cinemark USA, respectively, of the
Loan Documents to which it is a party and authorizing the
borrowing of the Loans by Borrower, certified as of the
Closing Date by the Secretary or an Assistant Secretary of
Borrower and Cinemark USA, respectively; and
(ii) certificate of the Secretary or Assistant
Secretary of Borrower and Cinemark USA, certifying the names
and true signatures of the officers of Borrower and Cinemark
USA, respectively, authorized to execute and deliver the Loan
Documents to which its is a party.
(c) Articles of Incorporation; By-laws and Good Standing. Each of the
following documents:
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40
(i) The articles or certificate of incorporation of
Borrower as in effect on the Closing Date, certified by the
Secretary of State of the State of incorporation of Borrower
as of a recent date and by the Secretary or Assistant
Secretary of Borrower as of the Closing Date and the bylaws of
Borrower as in effect on the Closing Date, certified by the
Secretary or Assistant Secretary of Borrower as of the Closing
Date; and
(ii) A good standing certificate for Borrower from the
Secretary of State of its state of incorporation and each
state where Borrower is qualified to do business as a foreign
corporation as of a recent date.
(d) Cinemark USA Guaranty.
The Cinemark USA Guaranty, duly executed and delivered by Cinemark USA.
(e) Intercompany Subordination Agreement.
The Intercompany Subordination Agreement, duly executed and delivered
by the parties thereto.
(f) Legal Opinions.
An opinion of the general counsel of Borrower addressed to the
Administrative Agent and the Banks.
(g) Payment of Fees.
Borrower shall have paid all accrued and unpaid fees, costs and
expenses to the extent then due and payable on the Closing Date, together with
reasonable attorney fees, costs and expenses (including the allocated cost of
Administrative Agent's inhouse counsel and staff) to the extent invoiced prior
to or on the Closing Date, together with such additional amounts of such fees,
costs and expenses as shall constitute Bank of America's and the Administrative
Agent's reasonable estimate of such reasonable fees, costs and expenses incurred
or to be incurred through the closing proceedings, provided that such estimate
shall not thereafter preclude final settling of accounts between Borrower and
the Administrative Agent; including any such costs, fees and expenses arising
under or referenced in Section 2.10. To the extent not invoiced by the Closing
Date, Borrower shall pay such fees, costs and expenses within 30 days of being
invoiced therefor.
(h) Payoff of Cinemark International Credit Agreement.
Evidence that all amounts owing under the Cinemark International Credit
Agreement are concurrently being paid in full.
(i) Certificate.
A certificate signed by a Responsible Officer, dated as of the Closing
Date (i) stating that: (A) the representations and warranties contained in
Section 5 are true and correct in all material respects on and as of such date,
as though made on and as of such date; (B) no Default or Event of Default exists
or would result from the initial Loan; and (C) there has occurred since December
31, 1997, no event or circumstance that could reasonably be
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Cinemark Mexico (USA) Credit Agreement
41
expected to result in a Material Adverse Effect; (ii) showing in detail the
calculations supporting such statement in respect of Sections 7.12 and 7.13 as
of September 30, 1998 and (iii) setting forth the Cinemark USA Senior Leverage
Ratio as of September 30, 1998 and the detailed calculations supporting such
ratios.
(j) Other Documents.
Such other approvals, opinions or documents as the Administrative Agent
or any Bank may request.
2. CONDITIONS TO ALL BORROWINGS. The obligation of each Bank to make any
Loan to be made by it hereunder (including its initial Loan) is subject to the
satisfaction of the following conditions precedent on the relevant Borrowing
Date:
(a) Notice of Borrowing. The Administrative Agent shall have received a
Notice of Borrowing;
(b) Continuation of Representations and Warranties. The representations
and warranties made by Borrower contained in Section 5 shall be true and correct
in all material respects on and as of such Borrowing Date, both before and after
giving effect to such Borrowing, with the same effect as if made on and as of
such Borrowing Date (except to the extent such representations and warranties
relate to an earlier date, in which case they were true and correct as of such
date); and
(c) No Existing Default. No Default or Event of Default shall exist or
shall result from such Borrowing.
Each Notice of Borrowing submitted by Borrower hereunder shall
constitute a representation and warranty by Borrower hereunder that, as of the
date of each such notice and as of each Borrowing Date, the conditions in
Section 4.02 are satisfied.
SECTION 5. REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to the Administrative Agent and each
Bank that:
1. CORPORATE EXISTENCE AND POWER.
Borrower and each of its Restricted Subsidiaries: (a) is a corporation
(with respect to Borrower) or a corporation or other limited liability entity
(with respect to Restricted Subsidiaries organized under the laws of a foreign
jurisdiction), in each case duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or formation;
(b) has the power and authority and all governmental licenses, authorizations,
consents and approvals to own its assets, carry on its business and execute,
deliver, and perform its obligations under, the Loan Documents; (c) is duly
qualified as a foreign corporation or other limited liability entity, licensed
and in good standing under the laws of each jurisdiction where its ownership,
lease or operation of property or the
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Cinemark Mexico (USA) Credit Agreement
42
conduct of its business requires such qualification; and (d) is in compliance
with all Requirements of Law; except, in each case referred to in clause (b),
(c) or clause (d), to the extent that the failure to do so could not reasonably
be expected to have a Material Adverse Effect.
2. CORPORATE AUTHORIZATION; NO CONTRAVENTION.
The execution, delivery and performance by Borrower, of this Agreement
and any other Loan Document to which Borrower is party, have been duly
authorized by all necessary corporate action, and do not and would not be
expected to: (a) contravene the terms of any of Borrower's articles of
incorporation, bylaws or other organization documents; (b) conflict with or
result in any breach or contravention of, or the creation of any Lien under, any
document evidencing any Contractual Obligation to which Borrower is a party or
any order, injunction, writ or decree of any Governmental Authority to which
Borrower or its Property is subject; or (c) violate any Requirement of Law.
3. GOVERNMENTAL AUTHORIZATION.
No approval, consent, exemption, authorization, or other action by, or
notice to, or filing with, any Governmental Authority is necessary or required
in connection with the execution, delivery or performance by, or enforcement
against, Borrower of the Agreement or any other Loan Document, except for
routine corporate filings to maintain the corporate good standing of Borrower
and its Restricted Subsidiaries unless failure to do so could not reasonably be
expected to have a Material Adverse Effect.
4. BINDING EFFECT.
This Agreement and each other Loan Document to which Borrower is a
party constitute the legal, valid and binding obligations of Borrower,
enforceable against such Borrower in accordance with their respective terms,
except as enforceability may be limited by applicable bankruptcy, insolvency, or
similar laws affecting the enforcement of creditors' rights generally or by
equitable principles relating to enforceability.
5. LITIGATION.
There are no actions, suits, proceedings, claims or disputes pending,
or to the knowledge of Borrower, threatened or contemplated, at law, in equity,
in arbitration or before any Governmental Authority, against Borrower, or its
Restricted Subsidiaries or any of their respective Properties which: (a) purport
to affect or pertain to this Agreement, or any other Loan Document, or any of
the transactions contemplated hereby or thereby or (b) if determined adversely
to Borrower, or its Restricted Subsidiaries, could reasonably be expected to
have a Material Adverse Effect. No injunction, writ, temporary restraining order
or any order of any nature has been issued by any court or other Governmental
Authority purporting to enjoin or restrain the execution, delivery and
performance of this Agreement or any other Loan Document, or directing that the
transactions provided for herein or therein not be consummated as herein or
therein provided.
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Cinemark Mexico (USA) Credit Agreement
43
6. NO DEFAULT.
No Default or Event of Default exists or would result from the
incurring of any Obligations by any Borrower Party. Neither Borrower nor any of
its Restricted Subsidiaries has received notice or has actual knowledge that it
is in default under or with respect to any Contractual Obligation in any respect
which, individually or together with all such defaults, could reasonably be
expected to have a Material Adverse Effect.
7. ERISA.
Neither Borrower nor any ERISA Affiliate maintains or sponsors any Plan
nor is obligated to make contributions under any Plan, and Borrower has no
liability under ERISA. Borrower is not a member of any Controlled Group.
8. USE OF PROCEEDS.
The proceeds of the Loans are intended to be and shall be used solely
for the purposes set forth in and permitted by Section 6.11, and are intended to
be and shall be used in compliance with Section 7.07.
9. TITLE TO PROPERTIES.
Borrower and each of its Restricted Subsidiaries has good record and
marketable (or indefeasible in the State of Texas) title in fee simple to, or
valid leasehold interests in, all real Property necessary or used in the
ordinary conduct of its business, except for such defects in title as could not,
individually or in the aggregate, have a Material Adverse Effect. As of the
Closing Date, the Property of Borrower and its Restricted Subsidiaries is
subject to no Liens, other than as permitted by Section 7.01.
10. TAXES.
Borrower and its Restricted Subsidiaries have filed all Federal and
other material tax returns and reports required to be filed, and have paid all
Federal and other material taxes, assessments, fees and other governmental
charges levied or imposed upon them or their Properties, income or assets that
are due pursuant to such returns or reports before any such taxes, assessments,
fees or other charges became delinquent or any penalty accrued with respect
thereto, except those which are being contested in good faith by appropriate
proceedings and for which adequate reserves have been provided in accordance
with GAAP and no Notice of Lien has been filed or recorded. To Borrower's
knowledge there is no proposed tax assessment against Borrower or any of its
Restricted Subsidiaries which could reasonably be expected to, if the assessment
were made, have a Material Adverse Effect.
11. FINANCIAL CONDITION.
(a) The consolidated financial statements of financial condition of
Borrower and its Restricted Subsidiaries dated December 31, 1997 and the related
consolidated statements of operations, shareholders' equity and cash flows for
the Fiscal Year ended on that date: (i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein; (ii) fairly present the financial condition of Borrower
and its Restricted Subsidiaries as of the date thereof and
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Cinemark Mexico (USA) Credit Agreement
44
results of operations for the period covered thereby; and (iii) show all
material indebtedness and other liabilities, direct or contingent of Borrower
and its consolidated Restricted Subsidiaries as of the date thereof, including
liabilities for taxes, material commitments and Contingent Obligations that are
required to be included on Borrower's consolidated financial statements in
accordance with GAAP.
(b) Since December 31, 1997, there has been no event which could
reasonably be expected to have a Material Adverse Effect.
12. ENVIRONMENTAL MATTERS.
(a) The on-going operations of Borrower and each of its Restricted
Subsidiaries comply in all respects with all Environmental Laws, except such
non-compliance which would not (if enforced in accordance with applicable law)
result in liability which could reasonably be expected to have a Material
Adverse Effect. Borrower and each of its Restricted Subsidiaries has obtained
all licenses, permits, authorizations and registrations required under any
Environmental Law ("Environmental Permits") and necessary for its ordinary
course operations, all such Environmental Permits are in good standing, and
Borrower and each of its Restricted Subsidiaries is in compliance with all
material terms and conditions of such Environmental Permits.
(b) To the knowledge of Borrower, none of Borrower, any of its Restricted
Subsidiaries or any of their respective present Property or operations is
subject to any outstanding material written order from or agreement with any
Governmental Authority nor subject to any judicial or docketed administrative
proceeding, respecting any Environmental Law, Environmental Claim or Hazardous
Material. There are no Hazardous Materials or other conditions or circumstances
existing with respect to any Property, or arising from operations prior to the
Closing Date, of Borrower or any of its Restricted Subsidiaries that would
reasonably be expected to give rise to Environmental Claims with a potential
liability of Borrower and its Restricted Subsidiaries that could reasonably be
expected to have a Material Adverse Effect for any such condition, circumstance
or Property. In addition, (i) neither Borrower's nor any of its Restricted
Subsidiaries' Properties have any underground storage tanks (x) that are not
properly registered or permitted under applicable Environmental Laws, or (y)
that are leaking or disposing of Hazardous Materials off-site in an amount that
would require remediation under Environmental Laws, and (ii) to Borrower's
actual knowledge Borrower and its Restricted Subsidiaries have notified all of
their employees of the existence, if any, of any health hazard arising from the
conditions of their employment and have met all notification requirements under
Title III of CERCLA and all other Environmental Laws.
13. SUBSIDIARIES.
Schedule 5.13 lists all Subsidiaries of Borrower as of the Closing Date
and correctly sets forth, with respect to each Subsidiary, its name, its legal
form, the number of its outstanding shares or other ownership interests and the
holders thereof, the jurisdiction of
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Cinemark Mexico (USA) Credit Agreement
45
its organization or formation, and whether or not such Subsidiary is a
Restricted Subsidiary or an Unrestricted Subsidiary.
14. REGULATED ENTITIES.
None of Borrower, any Person controlling Borrower, or any Subsidiary of
Borrower, is (a) an "Investment Company" within the meaning of the Investment
Company Act of 1940; or (b) subject to regulation under the Public Utility
Holding Company Act of 1935, the Federal Power Act, the Interstate Commerce Act,
any state public utilities code, or any other Federal or state statute or
regulation limiting its ability to incur Indebtedness.
15. NO BURDENSOME RESTRICTIONS.
Neither Borrower nor any of its Restricted Subsidiaries is a party to
or bound by any Contractual Obligation, or subject to any charter or corporate
restriction, or any Requirement of Law, which could reasonably be expected to
have a Material Adverse Effect.
16. SOLVENCY. Borrower is Solvent.
17. LABOR RELATIONS.
There are no strikes, lockouts or other labor disputes against Borrower
or any of its Restricted Subsidiaries, or, to Borrower's knowledge, threatened
against or affecting Borrower or any of its Restricted Subsidiaries, and no
significant unfair labor practice complaint is pending against Borrower or any
of its Restricted Subsidiaries or, to the knowledge of Borrower, threatened
against any of them before any Governmental Authority, in each case, which could
reasonably be expected to have a Material Adverse Effect.
18. COPYRIGHTS, PATENTS, TRADEMARKS AND LICENSES, ETC..
Borrower or its Restricted Subsidiaries own or are licensed or
otherwise have the right to use all of the patents, trademarks, service marks,
trade names, copyrights, franchises, authorizations and other rights that are
material to the operation of their respective businesses, without conflict with
the rights of any other Person. To the knowledge of Borrower, no slogan or other
advertising device, product, process, method, substance, part or other material
now employed, or now contemplated to be employed by Borrower or any of its
Restricted Subsidiaries infringes upon any rights held by any other Person; no
claim or litigation regarding any of the foregoing is pending or to the
knowledge of Borrower threatened, and no patent, invention, device, application,
principle or any statute, law, rule, regulation, standard or code is to the
knowledge of Borrower pending or proposed, which, in either case, could
reasonably be expected to have a Material Adverse Effect.
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Cinemark Mexico (USA) Credit Agreement
46
19. INSURANCE.
The Properties of Borrower and its Restricted Subsidiaries are insured
with financially sound and reputable insurance companies or self-insured
(including insurance through a related captive insurance company), in such
amounts, with such deductibles and covering such risks as Borrower believes is
adequate in character and amount.
20. SWAP OBLIGATIONS.
Neither Borrower nor any of its Restricted Subsidiaries has incurred
any outstanding obligations under any Swap Contracts.
21. YEAR 2000 COMPLIANCE.
Borrower has (a) initiated a review and assessment of all areas within
its and each of its Restricted Subsidiaries' business and operations (including
those affected by suppliers and vendors) that could be adversely affected by the
"Year 2000 Problem" (that is, the risk that computer applications used by
Borrower or any of its Restricted Subsidiaries (or its suppliers and vendors)
may be unable to recognize and perform properly date-sensitive functions
involving certain dates prior to and any date after December 31, 1999), (ii)
developed a plan and timeline for addressing the Year 2000 Problem on a timely
basis, and (iii) to date, implemented that plan in accordance with that
timetable. Borrower reasonably believes that all computer applications
(including those of its suppliers and vendors) that are material to its or any
of its Restricted Subsidiaries' business and operations will on a timely basis
be able to perform properly date-sensitive functions for all dates before and
after January 1, 2000 (that is, be "Year 2000 compliant), except to the extent
that a failure to do so could not reasonably be expected to have a Material
Adverse Effect.
22. FULL DISCLOSURE.
None of the representations or warranties made by Borrower in the Loan
Documents as of the date such representations and warranties are made or deemed
made, and none of the statements contained in each report or certificate
(including any exhibits to such report or certificate) furnished by or on behalf
of Borrower or any of its Restricted Subsidiaries in connection with the Loan
Documents, contains any untrue statement of a material fact or omits any
material fact required to be stated therein or necessary to make the statements
made therein, in light of the circumstances under which they are made, not
misleading.
SECTION 6. AFFIRMATIVE COVENANTS
Borrower covenants and agrees that, so long as any Bank shall have any
Commitment hereunder, or any Loan or other Obligation (exclusive of future,
contingent or unliquidated amounts arising under indemnity agreements) shall
remain unpaid or unsatisfied, unless the Majority Banks waive compliance in
writing:
1. FINANCIAL STATEMENTS.
Borrower shall deliver to the Administrative Agent (who shall deliver
the same to the Banks) in form and detail satisfactory to the Administrative
Agent and the Majority Banks, with sufficient copies for each Bank:
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Cinemark Mexico (USA) Credit Agreement
47
(a) Cinemark USA and Borrower Year-End Financials.
As soon as available, but not later than 90 days after the end of each
Fiscal Year:
1 a copy of the audited consolidated balance sheet of Cinemark USA and
its consolidated Subsidiaries as of the end of such Fiscal Year and the related
consolidated statements of income, shareholders' equity and cash flows for such
Fiscal Year, setting forth in each case in comparative form the figures for the
previous Fiscal Year, and accompanied by the report of Deloitte & Touche L.L.P.
or another nationally-recognized independent public accounting firm which report
shall state that such consolidated financial statements present fairly the
financial position for the periods indicated in conformity with GAAP applied on
a basis consistent with prior Fiscal Years except to the extent set forth
therein. Such opinion shall not be qualified or limited because of a restricted
or limited examination by such accountant of any material portion of the
Cinemark USA's or any consolidated Subsidiary's records; and
(ii) a copy of the unaudited balance sheet of Borrower and its
consolidated Restricted Subsidiaries as of the end of such
Fiscal Year and the related consolidated statements of income,
shareholders' equity and cash flows for such Fiscal Year,
setting forth in each case in comparative form the figures for
the previous Fiscal Year. Such financial statements shall be
certified by an appropriate Responsible Officer as fairly
presenting, in accordance with GAAP, the financial position
and the results of operations of Borrower and its consolidated
Restricted Subsidiaries as of such date.
(a) Cinemark USA and Borrower Quarterly Financials. As soon as available,
but not later than 45 days after the end of each of the first three Fiscal
Quarters of each year:
1 a copy of the unaudited consolidated balance sheet of Cinemark USA
and its Subsidiaries as of the end of such Fiscal Quarter and the related
consolidated statements of income, shareholders' equity and cash flows for the
period commencing on the first day and ending on the last day of such quarter,
setting forth in each case in comparative form the figures for the previous
Fiscal Quarter of the previous Fiscal Year and certified by an appropriate
Responsible Officer as fairly presenting, in accordance with GAAP (subject to
normal year end adjustments), the financial position and the results of
operations of Cinemark USA and its Subsidiaries; and
(ii) a copy of the unaudited consolidated balance sheet of
Borrower and its Restricted Subsidiaries as of the end of such
Fiscal Quarter and the related consolidated statements of
income, shareholders' equity and cash flows for the period
commencing on the first day and ending on the last day of such
Fiscal Quarter, and setting forth in each case in comparative
form the figures for the previous Fiscal Quarter of the
previous Fiscal Year, and certified by an appropriate
Responsible Officer as fairly presenting, in accordance with
GAAP (subject to normal year end adjustments), the
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Cinemark Mexico (USA) Credit Agreement
48
financial position and the results of operations of Borrower
and its Restricted Subsidiaries.
1. CERTIFICATES; OTHER INFORMATION.
Borrower shall furnish to the Administrative Agent (who shall deliver
the same to the Banks), with sufficient copies for each Bank:
(a) concurrently with the delivery of the financial statements referred to
in Sections 6.01(a) and (b) above, a certificate of a Responsible Officer (i)
stating that, to such officer's knowledge, Borrower, during such period, has
observed and performed all of its covenants and other agreements, and satisfied
every condition contained in this Agreement to be observed, performed or
satisfied by it, and that such officer has obtained no knowledge of any Default
or Event of Default except as specified (by applicable Section reference) in
such certificate, (ii)showing in detail the calculations supporting such
statement in respect of Sections 7.12 and 7.13 as of the date of such financial
statements; and (ii) setting forth the Cinemark USA Senior Leverage Ratio as of
the date of such financial statements and the detailed calculations supporting
such ratios;
(b) as soon as available, but not later than 60 days after the beginning
of each Fiscal Year an annual operating budget for Borrower and its Restricted
Subsidiaries for such Fiscal Year in a format satisfactory to the Administrative
Agent and the Banks;
(c) promptly after the same are sent, copies of all financial statements
and reports which Borrower sends to its shareholders; and
(d) promptly, such additional business, financial, corporate affairs and
other information as the Administrative Agent, at the request of any Bank, may
from time to time reasonably request.
2. NOTICES.
Borrower shall promptly notify the Administrative Agent (who shall
notify the Banks):
(a) of the occurrence of any Default or Event of Default, and of the
occurrence or existence of any event or circumstance that could reasonably be
expected to become a Default or Event of Default;
(b) of (i) any breach or non-performance of, or any default under, any
Contractual Obligation of Cinemark USA or Borrower or any of its Restricted
Subsidiaries of which Borrower has knowledge which could reasonably be expected
to result in a Material Adverse Effect; (ii) any dispute, litigation,
investigation, proceeding or suspension which may exist at any time between
Cinemark USA or Borrower or any of its Restricted Subsidiaries and any
Governmental Authority which could reasonably be expected to result in a
Material Adverse Effect, and (iii) any dispute, litigation or proceeding in
which
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Cinemark Mexico (USA) Credit Agreement
49
the relief sought is an injunction or other stay of the performance of this
Agreement or any Loan Document;
(c) of the commencement of, or any material development in, any litigation
or proceeding affecting Cinemark USA or Borrower or any Restricted Subsidiary
(i) in which the amount of damages claimed is $1,000,000 (or its equivalent in
another currency or currencies) or more, (ii) in which injunctive or similar
relief is sought, which, with respect to clauses (i) and (ii) of this subsection
(c), if adversely determined, could reasonably be expected to have a Material
Adverse Effect, or (iii) in which the relief sought is an injunction or other
stay of the performance of this Agreement or any Loan Document;
(d) upon, but in no event later than 10 days after, becoming aware of (in
each case only to the extent that the amount involved exceeds $500,000) (i) any
and all enforcement, cleanup, removal or other governmental or regulatory
actions instituted, completed or threatened against Borrower or any of its
Restricted Subsidiaries or any of their respective Properties pursuant to any
applicable Environmental Laws, (ii) any other Environmental Claims, and (iii)
any environmental or similar condition on any real property adjoining or in the
vicinity of the property of Borrower or any Restricted Subsidiary that could
reasonably be anticipated to cause such property or any part thereof to be
subject to any restrictions on the ownership, occupancy, transferability or use
of such property under any Environmental Laws;
(e) any Material Adverse Effect subsequent to the date of the most recent
audited financial statements of Borrower delivered to the Banks pursuant to
Section 6.01(a);
(f) of any material change in accounting policies or financial reporting
practices by Cinemark USA or Borrower or any of its Restricted Subsidiaries;
(g) of any labor controversy resulting in or threatening to result in any
strike, work stoppage, boycott, shutdown or other labor disruption against or
involving Cinemark USA or Borrower or any of its Restricted Subsidiaries, which
could reasonably be expected to have a Material Adverse Effect; and
(h) upon the request from time to time of the Administrative Agent, the
Swap Termination Values, together with a description of the method by which such
values were determined, relating to any then-outstanding Swap Contracts to which
Borrower or any of its Restricted Subsidiaries is party.
Each notice pursuant to this Section shall be accompanied by a written
statement by a Responsible Officer of Borrower setting forth details of the
occurrence referred to therein, and stating what action the affected Person
proposes to take with respect thereto and at what time. Each notice under
Section 6.03(a) shall describe with particularity any and all clauses or
provisions of this Agreement or other Loan Document that have been breached or
violated.
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Cinemark Mexico (USA) Credit Agreement
50
3. PRESERVATION OF CORPORATE EXISTENCE, ETC.
Borrower shall, and shall cause each of its Restricted Subsidiaries to:
(a) preserve and maintain in full force and effect its corporate existence and
good standing under the laws of its state or jurisdiction of incorporation;
provided, that Borrower shall not be required to maintain the existence of any
Restricted Subsidiary if the Board of Directors of Borrower determines that the
existence of such Restricted Subsidiary is no longer necessary or desirable in
the conduct of Borrower's business; (b) preserve and maintain in full force and
effect all rights, privileges, qualifications, permits, licenses and franchises
necessary or desirable in the normal conduct of its business as presently
conducted; (c) use its reasonable efforts, in the ordinary course of business,
to preserve its business organization and preserve the goodwill and business of
the customers, suppliers and others having material business relations with it;
and (d) preserve or renew all of its registered trademarks, trade names and
service marks, the non-preservation of which could reasonably be expected to
have a Material Adverse Effect.
4. MAINTENANCE OF PROPERTY.
Borrower shall maintain, and shall cause each of its Restricted
Subsidiaries to maintain, and preserve all its Property which is used or useful
in its business in good working order and condition, ordinary wear and tear
excepted and make all necessary repairs thereto and renewals and replacements
thereof except where the failure to do so could not reasonably be expected to
have a Material Adverse Effect.
5. INSURANCE.
Borrower shall maintain, and shall cause each of its Restricted
Subsidiaries to maintain, with financially sound and reputable independent
insurers or self insurance (including insurance through a related captive
insurance company), insurance with respect to its Properties and business
against loss or damage of the kinds as Borrower believes is adequate in
character and amount; including workers' compensation insurance, public
liability and property and casualty insurance.
6. PAYMENT OF OBLIGATIONS.
Borrower shall, and shall cause its Restricted Subsidiaries to, pay and
discharge (a) all tax liabilities, assessments and governmental charges or
levies upon it or its properties or assets before any penalty accrues thereon,
unless the same are being contested in good faith by appropriate proceedings and
adequate reserves in accordance with GAAP are being maintained by Borrower or
such Restricted Subsidiary; and (b) all lawful claims which, if unpaid, would by
law become a Lien upon its Property prior to the time when any penalty or fine
shall be incurred with respect thereto, unless the same are being contested in
good faith by appropriate proceedings and adequate reserves in accordance with
GAAP are being maintained by Borrower or such Restricted Subsidiary.
7. COMPLIANCE WITH LAWS.
Borrower shall comply, and shall cause each of its Restricted
Subsidiaries to comply, with all Requirements of Law of any Governmental
Authority having jurisdiction
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Cinemark Mexico (USA) Credit Agreement
51
over it or its business (including the Federal Fair Labor Standards Act), except
such as may be contested in good faith or as to which a bona fide dispute may
exist, or where the failure to so comply could not reasonably be expected to
have a Material Adverse Effect.
8. INSPECTION OF PROPERTY AND BOOKS AND RECORDS.
Borrower shall maintain and shall cause each of its Restricted
Subsidiaries to maintain proper books of record and account, in which full, true
and correct entries in conformity with GAAP consistently applied shall be made
of all financial transactions and matters involving the assets and business of
Borrower and such Restricted Subsidiaries. Borrower shall permit, and shall
cause each of its Restricted Subsidiaries to permit, representatives and
independent contractors of the Administrative Agent or any Bank to visit and
inspect any of their respective Properties, to examine their respective
corporate, financial and operating records, and make copies thereof or abstracts
therefrom, and to discuss their respective affairs, finances and accounts with
their respective directors, officers, and independent public accountants of the
Borrower at such reasonable times during normal business hours and as often as
may be reasonably desired, upon reasonable advance notice to Borrower; provided,
however, when an Event of Default has occurred and is continuing the
Administrative Agent or any Bank may do any of the foregoing at the expense of
Borrower at any time during normal business hours and without advance notice.
9. ENVIRONMENTAL LAWS.
Borrower shall, and shall cause each of its Restricted Subsidiaries to,
conduct its operations and keep and maintain its Property in compliance with all
Environmental Laws, except where the failure could not reasonably be expected
to, individually or in the aggregate, result in liability in excess of
$2,500,000. Upon the written request of the Administrative Agent or any Bank,
Borrower shall submit and cause each of its Restricted Subsidiaries to submit,
to the Administrative Agent with sufficient copies for each Bank, at Borrower's
sole cost and expense, at reasonable intervals, a report providing an update of
the status of any environmental, health or safety compliance, hazard or
liability issue identified in any notice or report required pursuant to Section
6.03(d), that could, individually or in the aggregate, result in liability in
excess of $2,500,000.
10. USE OF PROCEEDS.
Borrower shall use the proceeds of the Loans (a) to make a dividend to
Cinemark International and/or Cinemark USA in order for Cinemark International
or Cinemark USA to pay off amounts owing under the Cinemark International Credit
Agreement, (b) for the acquisition, construction and furnishing of theatres in
Mexico or other activities incidental thereto and (c) for working capital and
other general corporate purposes.
11. RECAPITALIZATION; CINEMARK HOLDINGS BECOMING A GUARANTOR.
If and when Cinemark USA effects the Recapitalization, Borrower shall
cause Cinemark Holdings to become an additional guarantor of the obligations
hereunder by executing and delivering a counterpart or supplement to the
Cinemark USA Guaranty in
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Cinemark Mexico (USA) Credit Agreement
52
form and substance satisfactory to the Administrative Agent and the Majority
Banks, together with items of the type set forth in Sections 4.01(b), 4.01(c),
4.01(f) and 4.01(j) with respect to Cinemark Holdings and the Recapitalization,
each dated the Recapitalization Date. In addition, all conditions precedent set
forth in the Cinemark USA Credit Agreement shall be satisfied. Thereafter, all
references to Guarantor and the Cinemark USA Guaranty shall be deemed to mean
and included Cinemark Holdings and the guaranty it has executed and delivered.
12. YEAR 2000 COMPLIANCE.
Borrower will promptly notify the Administrative Agent in the event
Borrower discovers or determines that any computer application (including those
of its suppliers and vendors) that is material to its or any of its Restricted
Subsidiaries' business and operations will not be Year 2000 compliant on a
timely basis, except to the extent that such failure could not reasonably be
expected to have a Material Adverse Effect.
13. FURTHER ASSURANCES.
Borrower shall ensure that all written information and reports and
certificates (including any exhibits thereto) furnished to the Administrative
Agent or the Banks do not and will not contain any untrue statement of a
material fact and do not and will not omit to state any material fact or any
fact necessary to make the statements contained therein not misleading in light
of the circumstances in which made, and will promptly disclose to the
Administrative Agent and the Banks and correct any defect or error that may be
discovered therein or in any Loan Document or in the execution, acknowledgement
or recordation thereof.
SECTION 1. NEGATIVE COVENANTS
Borrower hereby covenants and agrees that, so long as any Bank shall
have any Commitment hereunder, or any Loan or other Obligation (exclusive of
future, contingent or unliquidated amounts arising under indemnity agreements)
shall remain unpaid or unsatisfied, unless the Majority Banks waive compliance
in writing:
1. LIMITATION ON LIENS.
Borrower shall not, and shall not suffer or permit any of its
Restricted Subsidiaries to, directly or indirectly, make, create, incur, assume
or suffer to exist any Lien upon or with respect to any part of its Property,
whether now owned or hereafter acquired, other than the following:
(a) Any Lien existing on the property of the Borrower or its Restricted
Subsidiaries on the Closing Date and set forth on Schedule 7.01;
(b) any Lien created under any Loan Document;
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Cinemark Mexico (USA) Credit Agreement
53
(c) Liens for taxes, fees, assessments or other governmental charges which
are not delinquent or remain payable without penalty, or to the extent that
non-payment thereof is permitted by Section 6.07;
(d) carriers', warehousemen's, mechanics', landlords', materialmen's,
repairmen's or other similar Liens arising in the ordinary course of business
which are not delinquent or remain payable without penalty or are being
contested in good faith by appropriate proceedings and adequate reserves in
accordance with GAAP are being maintained by Borrower or such Restricted
Subsidiary;
(e) Liens consisting of pledges or deposits required in the ordinary
course of business as presently conducted in connection with workers'
compensation, unemployment insurance and other social security legislation;
(f) Liens on the Property of Borrower or any of its Restricted
Subsidiaries securing (i) the performance of bids, trade contracts (other than
for borrowed money), leases, and statutory obligations, (ii) contingent
obligations on surety and appeal bonds, and (iii) other obligations of a like
nature; in each case, incurred in the ordinary course of business provided that
all Liens securing delinquent performance or obligations could not (even if
enforced) reasonably be expected to have a Material Adverse Effect;
(g) any attachment or judgment Lien, unless the judgment it secures shall
not have been discharged within 30 calendar days after the expiration of any
stay or final appeals;
(h) easements, rights-of-way, restrictions, minor defects or
irregularities in title, Liens on assets outside of the United States and other
similar encumbrances which, in the aggregate, could not reasonably be expected
to result in a Material Adverse Effect or materially interfere with the ordinary
conduct of the businesses of Borrower and its Restricted Subsidiaries;
(i) Liens arising solely by virtue of any statutory or common law
provision relating to banker's liens, rights of set-off or similar rights and
remedies as to deposit accounts or other funds maintained with a creditor
depository institution; provided that (i) such deposit account is not a
dedicated cash collateral account and is not subject to restrictions against
access by Borrower in excess of those set forth by regulations promulgated by
the Federal Reserve Board, and (ii) such deposit account is not intended by
Borrower or any of its Restricted Subsidiaries to provide collateral to the
depository institution;
(j) Liens securing Purchase Money Obligations not exceeding $250,000 in
the aggregate at any one time;
(k) Liens on stock of Borrower's Restricted Subsidiaries from time to time
required under the Cinemark USA Credit Agreement; and
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Cinemark Mexico (USA) Credit Agreement
54
(l) Any renewal of or substitution for any Lien permitted by any of the
preceding subsections, including without limitation, in connection with
refinancings of any Indebtedness secured by such Liens (including all accrued
interest and any prepayment premium, if any, thereon); provided that the
Indebtedness secured is not increased nor the Lien extended to any additional
assets (other than proceeds and accessions).
2. DISPOSITION OF ASSETS.
Neither Borrower nor any Restricted Subsidiary shall make any
Dispositions except for Excluded Dispositions; provided, however, that no
Disposition shall be for less than the fair market value of the Property or
equity securities being disposed of by Borrower or such Restricted Subsidiary.
3. CONSOLIDATIONS AND MERGERS.
Borrower shall not, and shall not suffer or permit any of its
Restricted Subsidiaries to, merge, consolidate with or into, or convey,
transfer, lease or otherwise dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to or in favor of any Person, except:
(a) any Restricted Subsidiary of Borrower may merge with (i) Cinemark USA
or Borrower provided that Cinemark USA or Borrower, as the case may be, shall be
the continuing or surviving corporation, (ii) with any one or more Restricted
Subsidiaries of Cinemark USA or Borrower, and (iii) with any joint ventures,
partnerships and other Persons so long as such joint ventures, partnerships and
other Persons will, as a result of making such Investment and all other
contemporaneous related transactions, become a Restricted Subsidiary of Cinemark
USA or Borrower; provided that when any Wholly-Owned Restricted Subsidiary is
merging into another Restricted Subsidiary, the Wholly-Owned Restricted
Subsidiary shall be the continuing or surviving Person; and
(b) any Restricted Subsidiary of Borrower may sell all or substantially
all of its assets (upon voluntary liquidation or otherwise), to Cinemark USA,
Borrower or any of their Restricted Subsidiaries; provided that when any
Wholly-Owned Restricted Subsidiary is selling all or substantially all of its
assets to another Restricted Subsidiary, the Restricted Subsidiary acquiring
such assets shall be a Wholly-Owned Restricted Subsidiary.
4. LIMITATION ON INVESTMENTS.
Borrower shall not, and shall not suffer or permit any of its
Restricted Subsidiaries to, purchase, make or acquire any Investment in any
Person, except for the following ("Permitted Investments"):
(a) Investments in Cash Equivalents;
(b) extensions of credit in the nature of accounts receivable or notes
receivable arising from the sale or lease of goods or services in the ordinary
course of business;
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Cinemark Mexico (USA) Credit Agreement
55
(c) extensions of credit by Borrower to any of its Restricted Subsidiaries
or by any of its Restricted Subsidiaries to other Restricted Subsidiaries of
Borrower;
(d) Investments made solely with assets, the payment or application of
which is not restricted by Section 7.10;
(e) Investments by Restricted Subsidiaries in Borrower;
(f) Investments in the form of consideration for Property or equity
securities sold or otherwise disposed of in accordance with Section 7.02;
(g) bank accounts maintained in any commercial bank;
(h) refundable construction advances made with respect to the construction
of properties of a nature or type that are used in a business similar or related
to the business of Borrower or its Restricted Subsidiaries in the ordinary
course of business;
(i) advances or extensions of credit on terms customary in the industry in
the form of accounts or other receivables incurred, or pre-paid film rentals,
and loans and advances made in settlement of such accounts receivable, all in
the ordinary course of business;
(j) Investments permitted as Restricted Payments under Section 7.10;
(k) Investments in (i) Restricted Subsidiaries or (ii) joint ventures,
partnerships and other Persons so long as such joint ventures, partnerships and
other Persons will, as a result of making such Investment and all other
contemporaneous related transactions, become a Restricted Subsidiary ; and
(l) Other Investments not exceeding $5,000,000 in the aggregate since the
Closing Date.
5. LIMITATION ON INDEBTEDNESS.
Borrower shall not, and shall not suffer or permit any of its
Restricted Subsidiaries to, create, incur, assume, suffer to exist, or otherwise
become or remain directly or indirectly liable with respect to, any
Indebtedness, except:
(a) Indebtedness existing on the Closing Date and set forth in Schedule
7.05,
(b) Indebtedness incurred pursuant to this Agreement;
(c) endorsements for collection or deposit in the ordinary course of
business as presently conducted;
(d) Intercompany Subordinated Indebtedness; and
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Cinemark Mexico (USA) Credit Agreement
56
(e) Contingent Obligations relating to Borrower and/or its Restricted
Subsidiaries under one or more guaranties of Cinemark USA's obligations under
the Cinemark USA Credit Agreement.
6. TRANSACTIONS WITH AFFILIATES.
Borrower shall not, and shall not suffer or permit any of its
Restricted Subsidiaries to, enter into any transaction with any Affiliate of
Borrower or of any such Restricted Subsidiary, except (a) as expressly permitted
by this Agreement, or (b) unless such transaction is on terms no less favorable
to Borrower or such Restricted Subsidiary than would be obtained in a comparable
arm's-length transaction with a Person not an Affiliate of Borrower or such
Restricted Subsidiary; provided, however, that transactions between or among
Borrower and its Restricted Subsidiaries which are not otherwise prohibited by
this Agreement, transactions permitted under Section 7.10 and any employment
agreement entered into by Borrower or its Restricted Subsidiaries in the
ordinary course of business, in each case shall not be deemed a transaction with
an Affiliate.
7. USE OF PROCEEDS.
Borrower shall not and shall not suffer or permit any of its
Subsidiaries to use any portion of the Loan, directly or indirectly, (a) to
purchase or carry Margin Stock, (b) to repay or otherwise refinance indebtedness
of Borrower or others incurred to purchase or carry Margin Stock, or (c) to
extend credit for the purpose of purchasing or carrying any Margin Stock.
8. NO ERISA PLANS.
Borrower shall not, and shall not suffer or permit any of its ERISA
Affiliates to, maintain or sponsor any Plan nor become obligated to make
contributions under any Plan. Neither Borrower nor any of its ERISA Affiliates
shall become a member of any Controlled Group.
9. LEASE OBLIGATIONS.
Borrower shall not, and shall not suffer or permit any Restricted
Subsidiary to, create or suffer to exist any obligations for the payment of rent
for any Property under lease or agreement to lease, except for:
(a) leases of Borrower and its Subsidiaries in existence on the Closing
Date and any renewal, extension or refinancing thereof;
(b) Operating Leases entered into or assumed by Borrower or any of its
Restricted Subsidiaries after the Closing Date in the ordinary course of
business;
(c) leases constituting Excluded Dispositions; and
(d) guaranties of Operating Leases of any Restricted Subsidiary.
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Cinemark Mexico (USA) Credit Agreement
57
10. RESTRICTED PAYMENTS.
Borrower shall not, and shall not suffer or permit any of its
Restricted Subsidiaries to, make any Restricted Payment, except:
(a) declare and make dividend payments or other distributions payable
solely in its Capital Stock or in options, warrants or rights to acquire its
Capital Stock;
(b) declare and make dividends payments or other distributions to (i)
Borrower, (ii) another Subsidiary of Borrower that is a Restricted Subsidiary,
or (iii) Cinemark USA;
(c) purchase, redeem or otherwise acquire shares of its Capital Stock or
warrants or options to acquire any such shares with the proceeds received from
the substantially concurrent issue of new shares of its Capital Stock; and
(d) prepay, repay, redeem, defease or otherwise acquire or retire for
value prior to any scheduled maturity, scheduled repayment or scheduled sinking
fund payment, repay, prepay, redeem, defease or otherwise acquire for value
Intercompany Subordinated Indebtedness; provided that immediately prior to and
after giving effect to such repayment, no Default or Event of Default exists or
would result therefrom.
11. LIMITATION ON MANAGEMENT FEES.
Borrower shall not, and shall not suffer or permit any of its
Restricted Subsidiaries to, create, incur, assume, suffer to exist, or otherwise
become or remain directly or indirectly liable with respect to, any management
fees, except that Borrower may pay and accrue management fees to Cinemark USA in
an aggregate amount not exceeding 5% of Borrower's and its Restricted
Subsidiaries' total revenues provided, that such management fees are
subordinated on terms and conditions substantially the same as Intercompany
Subordinated Indebtedness and no Default or Event of Default exists or would
result from such payment and such management fees may be paid only if no Default
or Event of Default exists or would result therefrom.
12. BORROWER LEVERAGE RATIO.
Borrower shall not permit the Borrower Leverage Ratio to exceed the
3.75 to 1 at any time.
13. FIXED CHARGE COVERAGE RATIO.
Borrower shall not permit the Fixed Charge Coverage Ratio to be less
than 1.60 to 1.00 at any time.
14. CHANGE IN BUSINESS.
Borrower shall not, and shall not permit any of its Restricted
Subsidiaries to, engage in any material line of business substantially different
from those lines of business carried on by it on the date hereof.
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58
15. ACCOUNTING CHANGES.
Borrower shall not, and shall not suffer or permit any of its
Restricted Subsidiaries to, make any significant change in accounting treatment
or reporting practices, except as required by GAAP, or change the Fiscal Year of
Borrower or of any of its consolidated Restricted Subsidiaries.
16. LIMITATIONS ON NEGATIVE PLEDGES.
Borrower shall not, and shall not suffer or permit any of its
Restricted Subsidiaries to, agree to any restriction or limitation on the
upstreaming of payments from any Restricted Subsidiary to Borrower other than
immaterial amounts in the ordinary course of business.
SECTION 2. EVENTS OF DEFAULT
1. EVENT OF DEFAULT. Any of the following shall constitute an "Event of
Default":
(a) Non-Payment.
Borrower fails to pay, when and as required to be paid herein, any
principal of any Loan, or shall fail to pay within two Business Days of the due
date hereof any interest, fees or other amount payable hereunder or pursuant to
any other Loan Document; or
(b) Representation or Warranty.
Any representation or warranty by any Borrower Party made or deemed
made herein, in any Loan Document, or which is contained in any certificate,
document or financial or other statement by any Borrower Party or its
Responsible Officers, furnished at any time under this Agreement, or in or under
any Loan Document, shall prove to have been incorrect in any material respect on
or as of the date made or deemed made; or
(c) Specific Defaults.
Borrower fails to perform or observe any term, covenant or agreement
contained in Section 7.02, 7.03, 7.10, 7.11, 7.12, 7.13 or 7.16; or
(d) Other Defaults.
(i) Borrower fails to perform or observe any other term or covenant
contained in Section 6.01, 6.02, 6.03, 6.09 or Section 7 (other than the
subsections thereof set forth in subsection (c) above) and such default shall
continue unremedied for a period of three days, or (ii) any Borrower Party fails
to perform or observe any other term or covenant contained in this Agreement or
any Loan Document, and such default under other terms or covenants shall
continue unremedied for a period of 20 days after the earlier of (A) the date
upon which a Responsible Officer of Borrower knew or should have known of such
failure or (B) the date upon which written notice thereof is given to Borrower
by the Administrative Agent or any Bank; or
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(e) Cross-Defaults.
(i) Any Borrower Party or any of their respective Restricted
Subsidiaries (A) fails to make any payment in respect of any Indebtedness having
an aggregate principal amount (including undrawn committed or available amounts
and including amounts owing to all creditors under any combined or syndicated
credit arrangement) of $1,000,000 or more when due (whether by scheduled
maturity, required prepayment, acceleration, demand, or otherwise) and such
failure continues after the applicable grace or notice period, if any, specified
in the document relating thereto on the date of such failure; or (B) fails to
perform or observe any other condition or covenant, or any other event shall
occur or condition exist, under any agreement or instrument relating to any such
Indebtedness having an aggregate principal amount of $1,000,000 or more, and
such failure continues after the applicable grace or notice period, if any,
specified in the document relating thereto on the date of such failure if the
effect of such failure, event or condition is to cause, or to permit the holder
or holders of such Indebtedness or beneficiary or beneficiaries of such
Indebtedness (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause such Indebtedness to be declared to be
due and payable prior to its stated maturity, or any Contingent Obligation in an
amount of $1,000,000 or more to become payable or cash collateral in respect
thereof to be demanded; or (ii) there occurs under any Swap Contract an Early
Termination Date (as defined in such Swap Contract) resulting from (A) any event
of default under such Swap Contract as to which Borrower or any Restricted
Subsidiary is the Defaulting Party (as defined in such Swap Contract) or (B) any
Termination Event (as so defined) as to which Borrower or any Subsidiary is an
Affected Party (as so defined), and, in either event, the Swap Termination Value
owed by Borrower or such Subsidiary as a result thereof is greater than
$1,000,000; or
(f) Insolvency; Voluntary Proceedings.
Any Borrower Party or any of their respective Restricted Subsidiaries
(i) ceases or fails to be Solvent, or generally fails to pay, or admits in
writing its inability to pay, its debts as they become due, subject to
applicable grace periods, if any, whether at stated maturity or otherwise; (ii)
commences any Insolvency Proceeding with respect to itself; or (iii) takes any
action to effectuate or authorize any of the foregoing; or
(g) Involuntary Proceedings.
(i) Any involuntary Insolvency Proceeding is commenced or filed any
Borrower Party or by any of their respective Restricted Subsidiaries, or any
writ, judgment, warrant of attachment, execution or similar process, is issued
or levied against a substantial part of Borrower's or any of its Restricted
Subsidiaries' Properties, and any such proceeding or petition shall not be
dismissed, or such writ, judgment, warrant of attachment, execution or similar
process shall not be released, vacated or fully bonded within 60 days after
commencement, filing or levy; (ii) Borrower or any of its Restricted
Subsidiaries admits the material allegations of a petition against it in any
Insolvency Proceeding, or an order for relief (or similar order under non-U.S.
law) is ordered in any Insolvency Proceeding; or (iii) Borrower or any of its
Restricted Subsidiaries acquiesces in the appointment of a receiver, trustee,
custodian, conservator, liquidator, mortgagee in possession (or agent
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60
therefor), or other similar Person for itself or a substantial portion of its
Property or business;
(h) Monetary Judgments.
One or more final (non-interlocutory) judgments, orders or decrees
shall be entered against any Borrower Party or any of their respective
Restricted Subsidiaries involving in the aggregate a liability (to the extent
not covered by insurance, including insurance through a related captive
insurance company, but excluding self-insurance) as to any single or related
series of transactions, incidents or conditions, of $500,000 or more, and the
same shall remain unsatisfied, unvacated and unstayed pending appeal for a
period of 30 days after the entry thereof; or
(i) Non-Monetary Judgments.
Any non-monetary judgment, order or decree shall be rendered against
any Borrower Party or any of their respective Restricted Subsidiaries which does
or could reasonably be expected to have a Material Adverse Effect, and there
shall be any period of 10 consecutive days during which a stay of enforcement of
such judgment or order, by reason of a pending appeal or otherwise, shall not be
in effect; or
(j) Loan Documents.
Any material provision of any Loan Document at any time after its
execution and delivery and for any reason other than the agreement of the Banks
or satisfaction in full of all the Obligations, ceases to be in full force and
effect or is declared by a court of competent jurisdiction to be null and void,
invalid or unenforceable in any respect which, in any such event in the
reasonable opinion of the Banks, is materially adverse to the interests of the
Administrative Agent or the Banks; or any Borrower Party denies that it has any
or further liability or obligation under any Loan Document, or purports to
revoke, terminate or rescind same; or any Event of Default (as such term is or
may hereafter be specifically defined in any other Loan Document) occurs under
any other Loan Document; or
(k) Adverse Change.
There shall occur a Material Adverse Effect; or
(l) Change in Control.
There shall occur a Change in Control Event.
(m) Event of Default Under Cinemark USA Credit Agreement.
An Event of Default shall occur and be continuing under the Cinemark
USA Credit Agreement.
2. REMEDIES.
If any Event of Default occurs and is continuing, the Administrative
Agent shall, at the request of, or may, with the consent of, the Majority Banks,
(a) declare the Commitment of each Bank to make Loans to be terminated,
whereupon such
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Commitments and obligations shall forthwith be terminated; (b) declare the
unpaid principal amount of all outstanding Loans, all interest accrued and
unpaid thereon, and all other amounts owing or payable hereunder or under any
other Loan Document to be immediately due and payable; without presentment,
demand, protest or other notice of any kind, all of which are hereby expressly
waived by Borrower; and (c) exercise on behalf of itself and the Banks all
rights and remedies available to it and the Banks under the Loan Documents or
applicable law; provided, however, that upon the occurrence of any event
specified in paragraph (f) or (g) of Section 8.01 above (in the case of clause
(i) of paragraph (g), upon the expiration of the 60-day period mentioned
therein), the obligation of each Bank to make Loans shall automatically
terminate and the unpaid principal amount of all outstanding Loans and all
interest and other amounts as aforesaid shall automatically become due and
payable without further act of the Administrative Agent or any Bank.
3. RIGHTS NOT EXCLUSIVE.
The rights provided for in this Agreement and the other Loan Documents
are cumulative and are not exclusive of any other rights, powers, privileges or
remedies provided by law or in equity, or under any other instrument, document
or agreement now existing or hereafter arising.
SECTION 3. THE ADMINISTRATIVE AGENT
1. APPOINTMENT AND AUTHORIZATION.
Each Bank hereby irrevocably appoints, designates and authorizes the
Administrative Agent to take such action on its behalf under the provisions of
this Agreement and each other Loan Document and to exercise such powers and
perform such duties as are expressly delegated to it by the terms of this
Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document, the
Administrative Agent shall not have any duties or responsibilities, except those
expressly set forth herein, nor shall the Administrative Agent have or be deemed
to have any fiduciary relationship with any Bank, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist against the
Administrative Agent. Without limiting the generality of the foregoing sentence,
the use of the term "agent" in this Agreement with reference to the
Administrative Agent is not intended to connote any fiduciary or other implied
(or express) obligations arising under agency doctrine of any applicable law.
Instead, such term is used merely as a matter of market custom, and is intended
to create or reflect only an administrative relationship between independent
contracting parties.
2. DELEGATION OF DUTIES.
The Administrative Agent may execute any of its duties under this
Agreement or any other Loan Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. ▇▇▇
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62
Administrative Agent shall not be responsible for the negligence or misconduct
of any agent or attorney-in-fact that it selects with reasonable care.
3. LIABILITY OF ADMINISTRATIVE AGENT.
None of the Agent-Related Persons shall (a) be liable for any action
taken or omitted to be taken by any of them under or in connection with this
Agreement or any other Loan Document (except for its own gross negligence or
willful misconduct), or (b) be responsible in any manner to any of the Banks for
any recital, statement, representation or warranty made by Borrower or any
Subsidiary or Affiliate of Borrower, or any officer thereof, contained in this
Agreement or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Administrative Agent under or in connection with, this Agreement or any other
Loan Document, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or for any failure of
Borrower or any other party to any Loan Document to perform its obligations
hereunder or thereunder. No Agent-Related Person shall be under any obligation
to any Bank to ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this Agreement or any
other Loan Document, or to inspect the Properties, books or records of Borrower
or any of Borrower's Subsidiaries or Affiliates.
4. RELIANCE BY ADMINISTRATIVE AGENT.
(a) The Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to Borrower),
independent accountants and other experts selected by the Administrative Agent.
The Administrative Agent shall be fully justified in failing or refusing to take
any action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Majority Banks as it deems appropriate
and, if it so requests, it shall first be indemnified to its satisfaction by the
Banks against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. The Administrative Agent
shall in all cases be fully protected in acting, or in refraining from acting,
under this Agreement or any other Loan Document in accordance with a request or
consent of the Majority Banks (or all the Banks if required by Section 10.01)
and such request and any action taken or failure to act pursuant thereto shall
be binding upon all of the Banks.
(b) For purposes of determining compliance with the conditions specified
in Sections 4.01 and 4.02, each Bank that has executed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with each
document or other matter either sent by the Administrative Agent to such Bank
for consent, approval, acceptance or satisfaction, or required thereunder to be
consented to or approved by or acceptable or
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satisfactory to the Bank, unless an officer of the Administrative Agent
responsible for the transactions contemplated by the Loan Documents shall have
received notice from the Bank prior to the initial Borrowing specifying its
objection thereto and either such objection shall not have been withdrawn by
notice to the Administrative Agent to that effect or the Bank shall not have
made available to the Administrative Agent the Bank's ratable portion of such
Borrowing.
5. NOTICE OF DEFAULT.
The Administrative Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default, except with respect
to defaults in the payment of principal, interest and fees required to be paid
to the Administrative Agent for the account of the Banks, unless the
Administrative Agent shall have received written notice from a Bank or Borrower
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default". In the event that the
Administrative Agent receives such a notice, the Administrative Agent shall give
notice thereof to the Banks. The Administrative Agent shall take such action
with respect to such Default or Event of Default as shall be requested by the
Majority Banks in accordance with Section 8; provided, however, that unless and
until the Administrative Agent shall have received any such request, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable or in the best interest of the Banks.
6. CREDIT DECISION.
Each Bank expressly acknowledges that none of the Agent-Related Persons
has made any representation or warranty to it and that no act by the
Administrative Agent hereinafter taken, including any review of the affairs of
any Borrower Party or their respective Subsidiaries shall be deemed to
constitute any representation or warranty by the Administrative Agent to any
Bank. Each Bank represents to the Administrative Agent that it has,
independently and without reliance upon the Administrative Agent and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of the Borrower
Parties and their respective Subsidiaries, and all applicable bank regulatory
laws relating to the transactions contemplated thereby, and made its own
decision to enter into this Agreement and extend credit to Borrower hereunder.
Each Bank also represents that it will, independently and without reliance upon
the Administrative Agent and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigations as it deems necessary
to inform itself as to the business, prospects, operations, property, financial
and other condition and creditworthiness of the Borrower Parties and their
respective Subsidiaries. Except for notices, reports and other documents
expressly herein required to be furnished to the Banks by the Administrative
Agent, the Administrative Agent shall not have any duty or responsibility to
provide any Bank with any credit or other information concerning the
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business, prospects, operations, property, financial and other condition or
creditworthiness of any Borrower Party or their respective Subsidiaries which
may come into the possession of any of the Agent-Related Persons.
7. INDEMNIFICATION.
Whether or not the transactions contemplated hereby shall be
consummated, the Banks shall indemnify upon demand the Agent-Related Persons (to
the extent not reimbursed by or on behalf of Borrower and without limiting the
obligation of Borrower to do so), ratably from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses and disbursements of any kind whatsoever which may at any time
(including at any time following the repayment of the Loans and the termination
or resignation of the related Administrative Agent) be imposed on, incurred by
or asserted against any such Person in any way relating to or arising out of
this Agreement or any document contemplated by or referred to herein or therein
or the transactions contemplated hereby or thereby or any action taken or
omitted by any such Person under or in connection with any of the foregoing;
provided, however, that no Bank shall be liable for the payment to the
Agent-Related Persons of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting solely from such Person's gross negligence or willful misconduct.
Without limitation of the foregoing, each Bank shall reimburse the
Administrative Agent upon demand for its ratable share of any costs or
out-of-pocket expenses (including fees and expenses of counsel and the allocated
cost of in-house counsel) incurred by the Administrative Agent in connection
with the preparation, execution, delivery, administration, modification,
amendment or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities under,
this Agreement, any other Loan Document, or any document contemplated by or
referred to herein to the extent that the Administrative Agent is not reimbursed
for such expenses by or on behalf of Borrower. Without limiting the generality
of the foregoing, if the Internal Revenue Service or any other Governmental
Authority of the United States or other jurisdiction asserts a claim that the
Administrative Agent did not properly withhold tax from amounts paid to or for
the account of any Bank (because the appropriate form was not delivered, was not
properly executed, or because such Bank failed to notify the Administrative
Agent of a change in circumstances which rendered the exemption from, or
reduction of, withholding tax ineffective, or for any other reason) such Bank
shall indemnify the Administrative Agent fully for all amounts paid, directly or
indirectly, by the Administrative Agent as tax or otherwise, including penalties
and interest, and including any taxes imposed by any jurisdiction on the amounts
payable to the Administrative Agent under this Section, together with all costs
and expenses (including fees and expenses of counsel and the allocated cost of
in-house counsel). The obligation of the Banks in this Section shall survive the
payment of all Obligations hereunder.
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8. ADMINISTRATIVE AGENT IN INDIVIDUAL CAPACITY.
Bank of America and its Affiliates may make loans to, issue letters of
credit for the account of, accept deposits from, acquire equity interests in and
generally engage in any kind of banking, trust, financial advisory or other
business with any Borrower Party or their respective Subsidiaries and Affiliates
as though Bank of America were not the Administrative Agent hereunder and
without notice to or consent of the Banks. With respect to its Loans, Bank of
America shall have the same rights and powers under this Agreement as any other
Bank and may exercise the same as though it were not the Administrative Agent,
and the terms "Bank" and "Banks" shall include Bank of America in its individual
capacity.
9. SUCCESSOR ADMINISTRATIVE AGENT.
The Administrative Agent may, and at the request of the Majority Banks
shall, resign as Administrative Agent upon 30 days' notice to the Banks. If the
Administrative Agent shall resign as Administrative Agent under this Agreement,
the Majority Banks shall appoint from among the Banks a successor agent for the
Banks which successor agent shall be approved by Borrower. If no successor agent
is appointed prior to the effective date of the resignation of the
Administrative Agent, the Administrative Agent may appoint, after consulting
with the Banks and Borrower, a successor agent from among the Banks. Upon the
acceptance of its appointment as successor agent hereunder, such successor agent
shall succeed to all the rights, powers and duties of the retiring
Administrative Agent and the term "Administrative Agent" shall mean such
successor agent and the retiring Administrative Agent's appointment, powers and
duties as Administrative Agent shall be terminated. After any retiring
Administrative Agent's resignation hereunder as Administrative Agent, the
provisions of this Section 9 and Sections 10.04 and 10.05 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement. If no successor agent has accepted
appointment as Administrative Agent by the date which is 30 days following a
retiring Administrative Agent's notice of resignation, the retiring
Administrative Agent's resignation shall nevertheless thereupon become effective
and the Banks shall perform all of the duties of the Administrative Agent
hereunder until such time, if any, as the Majority Banks appoint a successor
agent as provided for above.
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SECTION 4. MISCELLANEOUS
1. Amendments and Waivers.
No amendment or waiver of any provision of this Agreement or any other
Loan Document, and no consent with respect to any departure by Borrower
therefrom, shall be effective unless the same shall be in writing and signed by
the Majority Banks, Borrower and acknowledged by the Administrative Agent, and
then such waiver shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no such waiver,
amendment, or consent shall, unless in writing and signed by all the Banks,
Borrower and acknowledged by the Administrative Agent, do any of the following:
(a) increase or extend the Commitment of any Bank (or reinstate any Commitment
terminated pursuant to Section 8.02(a)) or subject any Bank to any additional
obligations hereunder or under any Loan Document; (b) postpone or delay any date
fixed for any payment of principal, interest, fees or other amounts due to the
Banks (or any of them) hereunder or under any Loan Document (other than Swap
Contracts); (c) reduce the principal of, or the rate of interest specified
herein on any Loan, or of any fees or other amounts payable hereunder or under
any Loan Document (including amending any financial covenant or component
thereof to the extent used in determining interest, any fee or other amount);
(d) change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Loans which shall be required for the Banks or any of
them to take any action hereunder or under any Loan Document; (e) amend this
Section 10.01 or Section 2.15; (f) consent to any Prohibited Action or (g)
discharge any Borrower Party; provided further, that no amendment, waiver or
consent shall, unless in writing and signed by the Administrative Agent in
addition to the Majority Banks or all the Banks, as the case may be, affect the
rights or duties of the Administrative Agent under this Agreement or any other
Loan Document.
2. NOTICES.
All notices, requests and other communications provided for hereunder
shall be in writing (including telegraphic, telex, facsimile transmission or
cable communication) and mailed, telegraphed, telexed, transmitted or delivered,
if to Borrower to its address specified on Schedule 10.02 hereto; if to any
Bank, to its Domestic Lending Office specified on Schedule 10.02 hereto; and if
to the Administrative Agent, to its address specified on Schedule 10.02 hereto;
or, as to Borrower or the Administrative Agent, to such other address as shall
be designated by such party in a written notice to the other parties, and as to
each other party at such other address as shall be designated by such party in a
written notice to Borrower and the Administrative Agent. All such notices and
communications shall be effective when delivered for overnight delivery,
delivered to the telegraph company, transmitted by telecopier and confirmed by
telephone, transmitted by telex and confirmed by telex answerback or delivered
to the cable company, as applicable, or if delivered, upon delivery, except that
written notices pursuant to Section 2 shall not be effective until received by
the Administrative Agent.
3. NO WAIVER; CUMULATIVE REMEDIES.
No failure to exercise and no delay in exercising, on the part of the
Administrative Agent or any Bank, any right, remedy, power or privilege
hereunder, shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or
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privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege.
4. COSTS AND EXPENSES.
Borrower shall, whether or not the transactions contemplated hereby
shall be consummated:
(a) reimburse Bank of America (including in its capacity as Administrative
Agent) on demand for all reasonable costs and expenses incurred in connection
with the development, syndication, preparation, delivery, administration and
execution of, and any amendment, supplement, waiver or modification to, this
Agreement, any Loan Document and any other documents prepared in connection
herewith or therewith, and the consummation of the transactions contemplated
hereby and thereby, including the reasonable costs and expenses of counsel to
Bank of America (including in its capacity as Administrative Agent) (and the
allocated cost of internal counsel) with respect thereto;
(b) reimburse each Bank and the Administrative Agent on demand for all
reasonable costs and expenses incurred by them in connection with the
enforcement or preservation of any rights (including in connection with any
"workout" or restructuring regarding the Loans) under this Agreement, any Loan
Document, and any such other documents, including fees and out-of-pocket
expenses of counsel (and the allocated cost of internal counsel) to the
Administrative Agent and to each of the Banks; and
(c) reimburse the Administrative Agent on demand for all reasonable
appraisal, audit, search and filing fees, incurred or sustained by the
Administrative Agent in connection with the matters referred to under paragraphs
(a) and (b) above.
5. GENERAL INDEMNITY.
Borrower shall pay, indemnify, and hold each Bank, the Administrative
Agent and each of their respective officers, directors, employees, counsel,
agents and attorneys-in-fact (each, an "Indemnified Person") harmless from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, charges, expenses or disbursements (including
reasonable fees and out-of-pocket expenses of counsel and the allocated cost of
internal counsel) of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of this
Agreement and any other Loan Documents, or the transactions contemplated hereby
and thereby, and with respect to any investigation, litigation or proceeding
(including any Insolvency Proceeding or appellate proceeding) related to this
Agreement or the Loans, or the use of the proceeds thereof, whether or not any
Indemnified Person is a party thereto (all the foregoing, collectively, the
"Indemnified Liabilities"); provided, that Borrower shall have no obligation
hereunder to any Indemnified Person with respect to Indemnified Liabilities (i)
arising from the gross negligence or willful misconduct of such Indemnified
Person (ii) with respect to judicial proceedings commenced against such
Indemnified Person by any holder of the debt or equity securities of such
Indemnified Person based solely on the rights afforded such holder in its
capacity as such, and (iii) with respect to judicial proceedings
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commenced solely against such Indemnified Person by another Bank, Assignee or
Participant to the extent based on a cause of action against such Indemnified
Person and not Borrower or any Restricted Subsidiary. The obligations in this
Section 10.05 shall survive payment of all other Obligations. Borrower shall
have the right to undertake, conduct and control through counsel of its own
choosing (which counsel shall be acceptable to the Indemnified Persons acting
reasonably) and at the sole expense of Borrower, the conduct and settlement of
any Indemnified Liabilities, and the Indemnified Person shall cooperate with
Borrower in connection therewith; provided that Borrower shall permit the
Indemnified Person to participate in such conduct and settlement through counsel
chosen by the Indemnified Person, but the fees and expenses of such counsel
shall be borne by the Indemnified Person. Notwithstanding the foregoing, the
Indemnified Person shall have the right to employ its own counsel, and the
reasonable fees and expenses of such counsel shall be at Borrower's cost and
expense if the interests of Borrower and the Indemnified Person become adverse
in any such claim or course of action; provided, however, Borrower, in such
event, shall only be liable for the reasonable legal expenses of one counsel for
all of such Indemnified Persons. Borrower shall not be liable for any settlement
of any claim or action effected without its prior written consent, such consent
not to be unreasonably withheld. All amounts owing under this Section 10.05
shall be paid within 30 days after demand.
6. MARSHALLING; PAYMENTS SET ASIDE.
Neither the Administrative Agent nor the Banks shall be under any
obligation to ▇▇▇▇▇▇▇▇ any assets in favor of Borrower or any other Person or
against or in payment of any or all of the Obligations. To the extent that
Borrower makes a payment or payments to the Administrative Agent or the Banks,
or the Administrative Agent or the Banks enforce their Liens or exercise their
rights of set-off, and such payment or payments or the proceeds of such
enforcement or set-off or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid to
a trustee, receiver or any other party in connection with any Insolvency
Proceeding, or otherwise, then to the extent of such recovery the obligation or
part thereof originally intended to be satisfied shall be revived and continued
in full force and effect as if such payment had not been made or such
enforcement or set-off had not occurred.
7. SUCCESSORS AND ASSIGNS.
The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns,
except that Borrower may not assign or transfer any of its rights or obligations
under this Agreement without the prior written consent of the Administrative
Agent and each Bank.
8. ASSIGNMENTS, PARTICIPATIONS, ETC.
(a) Any Bank may, with the prior written consent of Borrower at all times
other than during the existence of an Event of Default, and the Administrative
Agent, which consents shall not be unreasonably withheld, at any time assign and
delegate to one or
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69
more Eligible Assignees (provided that no written consent of Borrower or the
Administrative Agent shall be required in connection with any assignment and
delegation by a Bank to a Bank Affiliate of such Bank) (each an "Assignee") all,
or any ratable part of all, of the Loans, the Commitments and the other rights
and obligations of such Bank hereunder, in a minimum amount of $5,000,000 and
multiples of $1,000,000 in excess thereof; provided, however, that (i) Borrower
and the Administrative Agent may continue to deal solely and directly with such
Bank in connection with the interest so assigned to an Assignee until (A)
written notice of such assignment, together with payment instructions, addresses
and related information with respect to the Assignee, shall have been given to
Borrower and the Administrative Agent by such Bank and the Assignee; (B) such
Bank and its Assignee shall have delivered to Borrower and the Administrative
Agent a Notice of Assignment and Acceptance in the form of Exhibit D ("Notice of
Assignment and Acceptance") together with any Note or Notes subject to such
assignment and (C) the assignor Bank or Assignee has paid to the Administrative
Agent a processing fee in the amount of $3,500.
(b) From and after the date that the Administrative Agent notifies the
assignor Bank that it has received an executed Notice of Assignment and
Acceptance and payment of the above-referenced processing fee, (i) the Assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Notice of
Assignment and Acceptance, shall have the rights and obligations of a Bank under
the Loan Documents, and (ii) the assignor Bank shall, to the extent that rights
and obligations hereunder and under the other Loan Documents have been assigned
by it pursuant to such Notice of Assignment and Acceptance, relinquish its
rights and be released from its obligations under the Loan Documents.
(c) Within five Business Days after its receipt of notice by the
Administrative Agent that it has received an executed Notice of Assignment and
Acceptance and payment of the processing fee, Borrower shall, upon the request
of the Assignee made through the Administrative Agent, execute and deliver to
the Administrative Agent, one or more new Notes evidencing such Assignee's
assigned Loans and Commitment and, if the assignor Bank had previously requested
one or more Notes and has retained a portion of its Loans and its Commitment,
replacement Notes in the principal amount of the Loans retained by the assignor
Bank (such Notes to be in exchange for, but not in payment of, the Notes held by
such Bank). Immediately upon each Assignee's making its processing fee payment
under the Notice of Assignment and Acceptance, this Agreement, shall be deemed
to be amended to the extent, but only to the extent, necessary to reflect the
addition of the Assignee and the resulting adjustment of the Commitments arising
therefrom. The Commitment allocated to each Assignee shall reduce such
Commitments of the assigning Bank pro tanto.
(d) Any Bank may at any time sell to one or more commercial banks or other
Persons not Affiliates of Borrower (a "Participant") participating interests in
any Loans, the Commitment of that Bank and the other interests of that Bank (the
"originating Bank")
- 64 -
Cinemark Mexico (USA) Credit Agreement
70
hereunder and under the other Loan Documents; provided, however, that (i) the
originating Bank's obligations under this Agreement shall remain unchanged, (ii)
the originating Bank shall remain solely responsible for the performance of such
obligations, (iii) Borrower and the Administrative Agent shall continue to deal
solely and directly with the originating Bank in connection with the originating
Bank's rights and obligations under this Agreement and the other Loan Documents,
and (iv) no Bank shall transfer or grant any participating interest under which
the Participant shall have rights to approve any amendment to, or any consent or
waiver with respect to, this Agreement or any other Loan Document, except to the
extent such amendment, consent or waiver would require unanimous consent of the
Banks as described in the first proviso to Section 10.01. In the case of any
such participation, the Participant shall be entitled to the benefit of Sections
3.01, 3.03 and 10.05 as though it were also a Bank hereunder, and if amounts
outstanding under this Agreement are due and unpaid, or shall have been declared
or shall have become due and payable upon the occurrence of an Event of Default,
each Participant shall be deemed to have the right of set-off in respect of its
participating interest in amounts owing under this Agreement to the same extent
as if the amount of its participating interest were owing directly to it as a
Bank under this Agreement.
(e) Notwithstanding any other provision contained in this Agreement or any
other Loan Document to the contrary, any Bank may assign all or any portion of
the Loans or Notes held by it to any Federal Reserve Bank or the United States
Treasury as collateral security pursuant to Regulation A of the Board of
Governors of the Federal Reserve System and any Operating Circular issued by
such Federal Reserve Bank, provided that any payment in respect of such assigned
Loans or Notes made by Borrower to or for the account of the assigning or
pledging Bank in accordance with the terms of this Agreement shall satisfy
Borrower's obligations hereunder in respect to such assigned Loans or Notes to
the extent of such payment. No such assignment shall release the assigning Bank
from its obligations hereunder.
9. SET-OFF.
In addition to any rights and remedies of the Banks provided by law, if
an Event of Default exists, each Bank is authorized at any time and from time to
time, without prior notice to Borrower, any such notice being waived by Borrower
to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held by, and other indebtedness at any time owing to, such Bank to or for the
credit or the account of Borrower against any and all Obligations owing to such
Bank, now or hereafter existing, irrespective of whether or not the
Administrative Agent or such Bank shall have made demand under this Agreement or
any Loan Document and although such Obligations may be contingent or unmatured.
Each Bank agrees promptly to notify Borrower and the Administrative Agent after
any such set-off and application made by such Bank; provided, however, that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of each Bank under this Section 10.09 are in addition to
the other rights and remedies (including other rights of set-off) which the Bank
may have.
- 65 -
Cinemark Mexico (USA) Credit Agreement
71
10. NOTIFICATION OF ADDRESSES, LENDING OFFICES, ETC.
Each Bank shall notify the Administrative Agent in writing of any
changes in the address to which notices to the Bank should be directed, of
addresses of its Lending Offices, of payment instructions in respect of all
payments to be made to it hereunder and of such other administrative information
as the Administrative Agent shall reasonably request.
11. COUNTERPARTS.
This Agreement may be executed by one or more of the parties to this
Agreement in any number of separate counterparts, each of which, when so
executed, shall be deemed an original, and all of said counterparts taken
together shall be deemed to constitute but one and the same instrument. A set of
the copies of this Agreement signed by all the parties shall be lodged with
Borrower and the Administrative Agent.
12. SEVERABILITY.
The illegality or unenforceability of any provision of this Agreement
or any instrument or agreement required hereunder shall not in any way affect or
impair the legality or enforceability of the remaining provisions of this
Agreement or any instrument or agreement required hereunder.
13. NO THIRD PARTIES BENEFITED.
This Agreement is made and entered into for the sole protection and
legal benefit of Borrower, the Banks and the Administrative Agent, and their
permitted successors and assigns, and no other Person shall be a direct or
indirect legal beneficiary of, or have any direct or indirect cause of action or
claim in connection with, this Agreement or any of the other Loan Documents.
Neither the Administrative Agent nor any Bank shall have any obligation to any
Person not a party to this Agreement or other Loan Documents.
14. TIME.
Time is of the essence as to each term or provision of this Agreement
and each of the other Loan Documents.
15. GOVERNING LAW AND JURISDICTION.
(a) THE LOAN DOCUMENTS SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK; PROVIDED THAT THE ADMINISTRATIVE AGENT
AND THE BANKS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT AND ANY
OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF
THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, EACH OF BORROWER, THE ADMINISTRATIVE AGENT AND THE
BANKS CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE
JURISDICTION OF THOSE COURTS. EACH OF
- 66 -
Cinemark Mexico (USA) Credit Agreement
72
BORROWER, THE ADMINISTRATIVE AGENT AND THE BANKS IRREVOCABLY WAIVES ANY
OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS
AGREEMENT OR ANY DOCUMENT RELATED HERETO. BORROWER, THE ADMINISTRATIVE AGENT AND
THE BANKS EACH WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER
PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY NEW YORK LAW.
16. WAIVER OF JURY TRIAL.
BORROWER, THE BANKS AND THE ADMINISTRATIVE AGENT EACH WAIVE THEIR
RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER
LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR
PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE.
BORROWER, THE BANKS AND THE ADMINISTRATIVE AGENT EACH AGREE THAT ANY SUCH CLAIM
OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT
LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO
A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION,
COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE
THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR
ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS.
17. NOTICE OF CLAIMS; CLAIMS BAR.
BORROWER HEREBY AGREES THAT IT SHALL GIVE PROMPT WRITTEN NOTICE OF ANY
CLAIM OR CAUSE OF ACTION IT BELIEVES IT HAS, OR MAY SEEK TO ASSERT OR ALLEGE
AGAINST THE ADMINISTRATIVE AGENT OR ANY BANK, WHETHER SUCH CLAIM IS BASED IN LAW
OR EQUITY, ARISING UNDER OR RELATED TO THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS, OR TO THE LOANS, OR ANY ACT OR OMISSION TO ACT BY THE ADMINISTRATIVE
AGENT OR ANY BANK WITH RESPECT HERETO OR THERETO, AND THAT IF IT SHALL FAIL TO
GIVE SUCH PROMPT NOTICE TO THE ADMINISTRATIVE AGENT WITH REGARD TO ANY SUCH
CLAIM OR CAUSE OF ACTION, IT SHALL BE DEEMED TO HAVE WAIVED, AND SHALL BE
FOREVER BARRED FROM BRINGING OR ASSERTING SUCH CLAIM OR CAUSE
- 67 -
Cinemark Mexico (USA) Credit Agreement
73
OF ACTION IN ANY SUIT, ACTION OR PROCEEDING IN ANY COURT OR BEFORE ANY
GOVERNMENTAL AGENCY.
18. ENTIRE AGREEMENT.
This Agreement, together with the other Loan Documents, embodies the
entire agreement and understanding among Borrower, the Banks and the
Administrative Agent, and supersedes all prior or contemporaneous Agreements and
understandings of such Persons, verbal or written, relating to the subject
matter hereof and thereof, except for the fees subject to any letter referred to
in Section 2.10.
19. INTERPRETATION.
This Agreement is the result of negotiations between and has been
reviewed by counsel to the Administrative Agent, Borrower and other parties, and
is the product of all parties hereto. Accordingly, this Agreement and the other
Loan Documents shall not be construed against the Banks or the Administrative
Agent merely because of the Administrative Agent's or Banks' involvement in the
preparation of such documents and agreements.
20. TERMINATION OF CINEMARK INTERNATIONAL CREDIT AGREEMENT.
Upon payment in full of all amounts owing under the Cinemark
International Credit Agreement, such agreement shall be deemed cancelled and
terminated with no further liability on the party of any party thereunder.
- 68 -
Cinemark Mexico (USA) Credit Agreement
74
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
CINEMARK MEXICO (USA), INC.
By:
Name:
Title:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as
Administrative Agent
By:
▇▇▇▇▇ ▇▇▇▇▇
Vice President
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as a Bank
By:
Name:
Title:
BANKBOSTON, N.A.
By:
Name:
Title:
CINEMARK INTERNATIONAL, INC. (for
purposes of Section 10.20 only)
By:
Name:
Title:
- 69 -
Cinemark Mexico (USA) Credit Agreement
75
SCHEDULE 1.01
PROFORMA CASH FLOW FOR ANNUALIZED THEATRES
Proforma Cash Flow for Annualized Theatres shall be the sum of the
Proforma Cash Flow for each Annualized Theatre, calculated on an Annualized
Theatre by Annualized Theatre basis in accordance with the formula set forth
below:
Proforma Cash Flow for each Actual Full Quarter Cash Flow
Annualized Theatre = Annualization Factor
Actual Full Quarter Cash Flow = Sum of actual Cash Flow from each Annualized
Theatre for each Included Quarter
Included Quarter = Each full quarter that such Annualized Theatre
was in operation during the measurement period
Annualization Factor = Sum of annualization factors set forth
below for Included Quarters:
Quarter ending March 31 of each year 0.21
Quarter ending June 30 of each year 0.25
Quarter ending September 30 of each year 0.34
Quarter ending December 31 of each year 0.20
====
Total 100.00
- 1 -
76
SCHEDULE 2.01
COMMITMENTS AND PRO RATA SHARES
BANK COMMITMENT PRO RATA SHARE
------------------------------------------ ------------------------- --------------------------------
66.▇▇▇▇▇▇▇▇%
Bank of America National Trust $20,000,000
and Savings Association
BankBoston, N.A. $10,000,000 33.33333334%
TOTAL $30,000,000 100.00000000%
- 1 -
77
SCHEDULE 5.13
SUBSIDIARIES
-------------------------------------------------------------------------------------------------------------------------
Name Legal Formation Shares Outstanding Status
-------------------------------------------------------------------------------------------------------------------------
Cinemark Corporation Texas corporation Cinemark USA, Inc. - 2,000 Restricted
-------------------------------------------------------------------------------------------------------------------------
Sunnymead Cinema Corp. California corporation Cinemark USA, Inc. - 100 Restricted
-------------------------------------------------------------------------------------------------------------------------
Cinemark Properties, Inc. Texas corporation Cinemark USA, Inc. - 100,000 Material restricted
-------------------------------------------------------------------------------------------------------------------------
Cinemark Transportation, Inc. Texas corporation Cinemark USA, Inc. - 100,000 Restricted
-------------------------------------------------------------------------------------------------------------------------
Trans Texas Cinema, Inc. Texas corporation Cinemark USA, Inc. - 100,000 Restricted
-------------------------------------------------------------------------------------------------------------------------
Missouri City Central 6, Inc. Texas corporation Cinemark Corporation - 100 Restricted
-------------------------------------------------------------------------------------------------------------------------
Cinemark International, L.L.C. Texas limited 100% of Membership Units Unrestricted
liability company
-------------------------------------------------------------------------------------------------------------------------
ENT Holdings, Inc. Texas corporation Cinemark USA, Inc. - 100 Restricted
-------------------------------------------------------------------------------------------------------------------------
Funtime Entertainment, Inc. Texas corporation ENT Holdings, Inc. - 8,000 Class A
ENT Holdings, Inc. - 2,000 Class B Restricted
-------------------------------------------------------------------------------------------------------------------------
Funtime Pizza Three Corporation Texas corporation Funtime Entertainment, Inc. - 20,000 Restricted
-------------------------------------------------------------------------------------------------------------------------
Funtime Pizza Four Corporation Texas corporation Funtime Entertainment, Inc. - 1,000 Restricted
-------------------------------------------------------------------------------------------------------------------------
Cinemark Mexico (USA), Inc. Delaware corporation Cinemark USA, Inc. - 3,926,118
New Wave Corporation - 182,346 Restricted
-------------------------------------------------------------------------------------------------------------------------
78
-----------------------------------------------------------------------------------------------------------------------
Cinemark de Mexico, S.A. de C.V. Mexican corporation Cinemark Mexico (USA) - 49,999 Restricted
Class I Series B; 406,572,480
Class II Series B
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ - 1 Class I Series B
-----------------------------------------------------------------------------------------------------------------------
Inversiones Cinemark, S.A. Chilean corporation Cinemark USA, Inc. - 399,300 Restricted
-----------------------------------------------------------------------------------------------------------------------
Cinemark Leasing Company fka Texas corporation Cinemark USA, Inc. - 100 Restricted
Tinseltown Equities, Inc.
-----------------------------------------------------------------------------------------------------------------------
Entertainment Amusement Texas corporation Cinemark USA, Inc. - 50,000 No designation
Enterprises, Inc. ▇▇▇▇▇▇ ▇. ▇▇▇▇ - 50,000
-----------------------------------------------------------------------------------------------------------------------
Cinemark Partners I, Inc. Texas corporation Cinemark USA - 100 Restricted
-----------------------------------------------------------------------------------------------------------------------
Cinemark Holdings Canada, Inc. Canadian corporation Canada Theatre Holdings, Inc. -1 Unrestricted
-----------------------------------------------------------------------------------------------------------------------
Canada Theatre Holdings, Inc. Delaware corporation Cinemark International - ___ shares Unrestricted
-----------------------------------------------------------------------------------------------------------------------
Laredo Theatre, Ltd. Texas limited Cinemark USA, Inc. - 75% Restricted
partnership Lone Star - 25%
-----------------------------------------------------------------------------------------------------------------------
Cinemark Brasil S.A. Brazilian corporation Cinemark Empreendimentos - 260,000 Unrestricted
NN Participacoes Ltda - 70,204
Venture II Equity Holdings Corp -
105,307
-----------------------------------------------------------------------------------------------------------------------
Cinemark Empreendimentos e. Brazilian corporation Cinemark International - 179,998 Unrestricted
Participacoes LTDA ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ - 2
-----------------------------------------------------------------------------------------------------------------------
Servicios Cinemark, S.A. de C.V. Mexican corporation Cinemark USA, Inc. - 49,999 Restricted
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ - 1
-----------------------------------------------------------------------------------------------------------------------
Cinemark del Norte, S.A. de C.V. Mexican corporation Cinemark Mexico (USA) - 49,999 Restricted
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ - 1
-----------------------------------------------------------------------------------------------------------------------
79
-----------------------------------------------------------------------------------------------------------------------
Cinemark Theatres Canada, Inc. Canadian corporation 1,000 - Cinemark USA, Inc. Restricted
-----------------------------------------------------------------------------------------------------------------------
Cinemark del Ecuador S.A. Ecuadorian corporation Cinemark International, Inc. - 3,000 Unrestricted
▇▇▇▇▇▇ ▇▇▇▇ & Associados Cia. Ltda -
180
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ - 500
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ - 100
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ - 40
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ - 40
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Bilbao - 60
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ - 500
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ - 90
▇▇▇▇▇▇ ▇▇▇▇▇ Castells - 90
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ - 120
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ - 40
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ - 70
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ - 70
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ - 40
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Logo - 60
-----------------------------------------------------------------------------------------------------------------------
Cinemark del Peru S.A. Peruvian corporation Cinemark International - 1,000 Class A Restricted
Conate II S.A. - 1,000 Class B
-----------------------------------------------------------------------------------------------------------------------
Cinemark Rio de la Plata Argentinian company Cinemark Corp. - 99.9% Restricted
Associates S.R.L. Sunnymead Cinema Corp. - .1%
-----------------------------------------------------------------------------------------------------------------------
Cinemark Theatre Services, Inc Texas corporation Cinemark USA, Inc. - 1,000 Restricted
-----------------------------------------------------------------------------------------------------------------------
Cinemark Costa Rica, ▇.▇. ▇▇▇▇▇ Rican corporation Cinemark Equity Holdings Unrestricted
Corporation - 100%
-----------------------------------------------------------------------------------------------------------------------
Cinemark El. Salvador, S.A. El Salvadorian Cinemark Equity Holdings Unrestricted
de C.V. corporation Corporation - 100%
-----------------------------------------------------------------------------------------------------------------------
80
-----------------------------------------------------------------------------------------------------------------------
Cinemark Equity Holdings British Virgin Islands Cinemark International, Inc. - 50.1% Unrestricted
Corporation corporation Cines de Centroamerica - 49.9%
-----------------------------------------------------------------------------------------------------------------------
Multiplex Properties, Inc. Delaware corporation Cinemark USA, Inc. - 100% Restricted
-----------------------------------------------------------------------------------------------------------------------
Cinemark Investments Corporation Delaware corporation Cinemark USA, Inc. - 100% Unrestricted
-----------------------------------------------------------------------------------------------------------------------
Inmobilaria Cinemark S.A. de C.V. Mexican corporation Cinemark de Mexico S.A. de C.V. - Restricted
99.9%
Cinemark International - .1%
-----------------------------------------------------------------------------------------------------------------------
Cinemark Chile S.A. Chilean corporation Inversiones Cinemark - 50% Restricted
-----------------------------------------------------------------------------------------------------------------------
81
SCHEDULE 7.01
EXISTING LIENS
-1-
82
SCHEDULE 7.05
EXISTING INDEBTEDNESS
-1-
83
SCHEDULE 10.02
OFFSHORE AND DOMESTIC LENDING OFFICES,
ADDRESSES FOR NOTICES
BORROWER
CINEMARK MEXICO (USA), INC.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Chief Financial Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
AS ADMINISTRATIVE AGENT
Notices of Borrowing and Notices of Conversion/Continuation:
Bank of America National Trust
and Savings Association
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Other Notices:
Bank of America National Trust
and Savings Association
Agency Management #10831
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
- ▇ -
▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ NATIONAL TRUST
AND SAVINGS ASSOCIATION,
AS A BANK
Domestic and Offshore Lending Office:
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Notices (other than Requests for Extensions of Credit):
Bank of America National Trust
and Savings Association
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Associate
Media and Entertainment #3283
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
BANKBOSTON, N.A.
Domestic and Offshore Lending Office:
BankBoston, N.A.
Media & Communications
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇-▇▇-▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
- 2 -
85
EXHIBIT A
FORM OF NOTICE OF BORROWING
TO: Bank of America National Trust and Savings
Association, as Administrative Agent
Pursuant to Section 2.03 of that certain Credit Agreement dated as of
November 16, 1998 (as from time to time amended, extended, restated, modified or
supplemented, the "Credit Agreement") among Cinemark Mexico (USA), Inc., (the
"Borrower"), the Banks party thereto and Bank of America National Trust and
Savings Association, as Administrative Agent (in such capacity, the
"Administrative Agent") for said Banks, this represents the Borrower's request
to borrow on ______________ from the Banks, according to their respective Pro
Rata Share, $____________ as [Base Rate] [Offshore Rate] Loans. [The initial
Interest period for such Offshore Rate is requested to be a ___________ -month
period]. The proceeds of such Loans are to be deposited in Borrower's account
at the Administrative Agent. capitalized terms used herein shall have the
meanings assigned to them in the Credit Agreement
The undersigned Responsible Officer hereby certifies that:
(a) the representations and warranties of the Borrower contained in the
Credit Agreement are true and correct in all material respects on and as of the
date hereof to the same extent as though made on and as of the date hereof
(except to the extent such representations and warranties relate to an earlier
date, in which case they were true and correct as of such date); and
(b) no Default or Event of Default has occurred and is continuing under
the Credit Agreement or will result from the proposed borrowing.
DATED:
-----------------------
CINEMARK MEXICO (USA), INC.
By
--------------------------------
Name
------------------------------
Title
------------------------------
▇-▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (▇▇▇) Of Borrowing
86
EXHIBIT B
FORM OF NOTICE OF CONVERSION/CONTINUATION
TO: Bank of America National Trust and Savings
Association, as Administrative Agent
1. CONVERSION SELECTION. Pursuant to Section 2.04 of that certain
Credit Agreement dated as of November 16, 1998 (as from time to time amended,
extended, restated, modified or supplemented, the "Credit Agreement") among
Cinemark Mexico (USA), Inc., (the "Borrower"), the Banks party thereto and Bank
of America National Trust and Savings Association, as Administrative Agent (in
such capacity, the "Administrative Agent") for said Banks, this represents the
Borrower's request to convert $________________of existing [Base Rate] [Offshore
Rate] Loans on _______________, ______, to [Offshore Rate] [Base Rate] Loans, as
follows:
INTEREST PERIOD
DOLLAR AMOUNT (OFFSHORE RATE LOANS)
------------- ---------------------
$ months
----------------- -----------
2. CONTINUATION SELECTION. (Offshore Rate Loans). Pursuant to Section
2.4 of the Agreement, please continue $_______of existing Offshore Rate Loans,
the final day of the current Interest Period of which is __________, _________,
as follows:
INTEREST PERIOD
DOLLAR AMOUNT (OFFSHORE RATE LOANS)
------------- ---------------------
$ months
----------------- -----------
CINEMARK MEXICO (USA), INC.
By
------------------------------
Name
---------------------------
Title
- 1 -
Cinemark Mexico (USA) Notice of Conversion/Continuation
87
EXHIBIT B
CINEMARK USA GUARANTY
(GUARANTY OF CINEMARK MEXICO (USA))
TO: Bank of America National Trust and Savings
Association, as Administrative Agent (the "Administrative Agent")
PRELIMINARY STATEMENTS:
A. Reference is made to that certain Credit Agreement dated as of
November 16, 1998 (as from time to time amended, extended, restated, modified or
supplemented, the "Credit Agreement;" capitalized terms used herein shall have
the meanings assigned to them in the Credit Agreement) among Cinemark Mexico
(USA), Inc., (the "Borrower"), the Banks party thereto and Bank of America
National Trust and Savings Association, as Administrative Agent (in such
capacity, the "Administrative Agent") for said Banks.
B. Guarantor is the ultimate shareholder of the Borrower and has
derived, and expects to continue deriving, direct and indirect benefits from
extensions of credit made to the Borrower, and now desires to guaranty the
Obligations.
C. It is a requirement of the Credit Agreement that Guarantor execute
and deliver this Guaranty.
NOW, THEREFORE, Guarantor agrees as follows:
1. For valuable consideration, the undersigned (the "Guarantor")
unconditionally, absolutely and irrevocably guarantees and promises to pay to
the Administrative Agent, or order, on demand, in lawful money of the United
States and in immediately available funds, any and all present or future
Obligations owing to the Banks, the Administrative Agent and the Syndication
Agent (collectively, the "Guarantied Parties"). The term Obligations has the
meaning assigned to such term under the Credit Agreement and is used herein in
its most comprehensive sense and includes any and all advances, debts,
obligations, and liabilities of the Borrower, now, or hereafter made, incurred,
or created, whether voluntary or involuntarily, and however arising, including,
without limitation, any and all reasonable attorneys' fees (including the
allocated cost of inhouse counsel), costs, premiums, charges, or interest owed
by the Borrower to the Guarantied Parties, whether due or not due, absolute or
contingent, liquidated or unliquidated, determined or undetermined, whether the
Borrower may be liable individually or jointly with others, whether recovery
upon such indebtedness may be or hereafter becomes barred by any statute of
limitations or whether such indebtedness may be or hereafter become otherwise
unenforceable.
2. This Guaranty is a continuing guaranty which relates to any
Obligations, including those which arise under successive transactions which
shall either cause the Borrower to incur new Obligations, continue the
Obligations from time to time, or renew them after they
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Cinemark Mexico (USA) Guaranty
88
have been satisfied. Guarantor agrees that nothing shall discharge or satisfy
its obligations created hereunder except for the full payment of the
Obligations. Any payment by Guarantor shall not reduce its maximum obligation
hereunder.
3. Guarantor agrees that it is directly and primarily liable to the
Administrative Agent for the benefit of the Guarantied Parties, that its
obligations hereunder are independent of the Obligations of the Borrower, or of
any other guarantor, and that a separate action or actions may be brought and
prosecuted against Guarantor, whether action is brought against the Borrower or
whether the Borrower is joined in any such action or actions. Guarantor agrees
that any releases which may be given by the Administrative Agent and the
Guarantied Parties to the Borrower or any other guarantor shall not release it
from this Guaranty.
4. The obligations of Guarantor under this Guaranty shall not be
affected, modified or impaired upon the occurrence from time to time of any of
the following, whether or not with notice to or the consent of Guarantor:
(a) the compromise, settlement, change, modification, amendment
(whether material or otherwise) or partial termination of any or all of the
Obligations;
(b) the failure to give notice to Guarantor of the occurrence of any
Event of Default under the terms and provisions of the Agreement;
(c) the waiver of the payment, performance or observance of any of the
Obligations;
(d) the taking or omitting to take any actions referred to in any Loan
Document or of any action under this Guaranty;
(e) any failure, omission or delay on the part of the Administrative
Agent and/or the Guarantied Parties to enforce, assert or exercise any right,
power or remedy conferred in this Guaranty, the Credit Agreement, any other Loan
Document or any other indulgence or similar act on the part of the
Administrative Agent and/or the Guarantied Parties in good faith and in
compliance with applicable law;
(f) the voluntary or involuntary liquidation, dissolution, sale or
other disposition of all or substantially all of the assets, marshalling of
assets, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors or readjustment of, or other similar proceedings which affect
Guarantor, any other guarantor of any of the Obligations of the Borrower or any
of the assets of any of them, or any allegation of invalidity or contest of the
validity of this Guaranty in any such proceeding;
(g) to the extent permitted by law, the release or discharge of any
other guarantors of the Obligations from the performance or observance of any
obligation, covenant or agreement contained in any guaranties of the Obligations
by operation of law; or
(h) the default or failure of any other guarantors of the Obligations
fully to perform any of their respective obligations set forth in any such
guaranties of the Obligations.
C - 2
Cinemark Mexico (USA) Guaranty
89
To the extent any of the foregoing refers to any actions which the
Administrative Agent or the Guarantied Parties may take, Guarantor hereby agrees
that the Administrative Agent and/or the Guarantied Parties may take such
actions in such manner, upon such terms, and at such times as the Administrative
Agent or the Guarantied Parties, in their discretion, deem advisable, without,
in any way or respect, impairing, affecting, reducing or releasing Guarantor
from its undertakings hereunder and Guarantor hereby consents to each and all of
the foregoing actions, events and occurrences.
5. Guarantor hereby waives:
(a) any and all rights to require the Administrative Agent or the
Guarantied Parties to prosecute or seek to enforce any remedies against the
Borrower or any other party liable to the Administrative Agent or the Guarantied
Parties on account of the Obligations;
(b) any right to assert against the Administrative Agent or the
Guarantied Parties any defense (legal or equitable), set-off, counterclaim, or
claim which Guarantor may now or at any time hereafter have against the Borrower
or any other party liable to the Administrative Agent or the Guarantied Parties
in any way or manner under the Credit Agreement;
(c) all defenses, counterclaims and off-sets of any kind or nature,
arising directly or indirectly from the present or future lack of perfection,
sufficiency, validity or enforceability of any Loan Document and the security
interest granted pursuant thereto;
(d) any defense arising by reason of any claim or defense based upon an
election of remedies by the Administrative Agent or the Guarantied Parties
including, without limitation, any direction to proceed by judicial or
nonjudicial foreclosure or by deed in lieu thereof, which, in any manner
impairs, affects, reduces, releases, destroys or extinguishes Guarantor's
subrogation rights, rights to proceed against the Borrower for reimbursement, or
any other rights of Guarantor to proceed against the Borrower, against any other
guarantor, or against any other security, with Guarantor understanding that the
exercise by the Administrative Agent and/or the Guarantied Parties of certain
rights and remedies may offset or eliminate Guarantor's right of subrogation
against the Borrower, and that Guarantor may therefore incur partially or
totally non- reimbursable liability hereunder;
(e) all presentments, demands for performance, notices of
non-performance, protests, notices of protest, notices of dishonor, notices of
default, notice of acceptance of this Guaranty, and notices of the existence,
creation, or incurring of new or additional indebtedness, and all other notices
or formalities to which Guarantor may be entitled; and
(f) without limiting the generality of the foregoing, Guarantor hereby
expressly waives any and all benefits of California Civil Code Sections 2809,
2810, 2819, 2825, 2839 and 2845 through 2850.
6. Guarantor hereby agrees that unless and until all Obligations have
been paid to the Administrative Agent and the Guarantied Parties in full, it
shall not have any rights of subrogation, reimbursement or contribution as
against the Borrower or any other guarantor, if
C - 3
Cinemark Mexico (USA) Guaranty
90
any, and shall not seek to assert or enforce the same. Guarantor understands
that the exercise by Administrative Agent of certain rights and remedies
contained in the Loan Documents may affect or eliminate Guarantor's right of
subrogation if any, against the Borrower and that Guarantor may therefore incur
a partially or totally non-reimbursable liability hereunder; nevertheless,
Guarantor hereby authorizes and empowers the Administrative Agent and the
Guarantied Parties to exercise, in their sole discretion, any right and remedy,
or any combination thereof, which may then be available, since it is the intent
and purpose of Guarantor that the obligations hereunder shall be absolute,
independent and unconditional under any and all circumstances.
7. Guarantor is presently informed of the financial condition of the
Borrower and of all other circumstances which a diligent inquiry would reveal
and which bear upon the risk of nonpayment of the Obligations. Guarantor hereby
covenants that it will continue to keep itself informed of the financial
condition of the Borrower, the status of other guarantors, if any, and of all
other circumstances which bear upon the risk of nonpayment. Guarantor hereby
waives its right, if any, to require the Administrative Agent or the Guarantied
Parties to disclose to it any information which the Administrative Agent or any
Bank may now or hereafter acquire concerning such condition or circumstances
including, but not limited to, the release of any other guarantor.
8. The Administrative Agent and each Bank's books and records
evidencing the Obligations shall be admissible in any action or proceeding and
shall be binding upon the Guarantor for the purpose of establishing the terms
set forth therein and shall constitute prima facie proof thereof.
9. Guarantor represents and warrants that:
(a) Guarantor: (i) is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation;
(ii) has the power and authority and all governmental licenses, authorizations,
consents and approvals to own its assets, carry on its business and execute,
deliver, and perform its obligations under, the Loan Documents; (iii) is duly
qualified as a foreign corporation, licensed and in good standing under the laws
of each jurisdiction where its ownership, lease or operation of property or the
conduct of its business requires such qualification; and (iv) is in compliance
with all Requirements of Law; except, in each case referred to in clause (ii),
(iii) or clause (iv), to the extent that the failure to do so could not
reasonably be expected to have a Material Adverse Effect.
(b) The execution, delivery and performance by Guarantor of this
Guaranty have been duly authorized by all necessary corporate action, and do not
and would not be expected to: (i) contravene the terms of any of Guarantor's
articles of incorporation, bylaws or other organization documents; (ii) conflict
with or result in any breach or contravention of, or the creation of any Lien
under, any document evidencing any Contractual Obligation to which Guarantor is
a party or any order, injunction, writ or decree of any Governmental Authority
to which Guarantor or its Property is subject; or (iii) violate any Requirement
of Law.
C - 4
Cinemark Mexico (USA) Guaranty
91
(c) No approval, consent, exemption, authorization, or other action by,
or notice to, or filing with, any Governmental Authority is necessary or
required in connection with the execution, delivery or performance by, or
enforcement against, Guarantor of the Guaranty, except for routine corporate
filings to maintain the corporate good standing of Guarantor.
(d) This Guaranty constitutes the legal, valid and binding obligations
of Guarantor, enforceable against Guarantor in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy, insolvency, or
similar laws affecting the enforcement of creditors' rights generally or by
equitable principles relating to enforceability.
(e) There is no action, suit or proceeding pending against, or to the
knowledge of Guarantor, threatened against or affecting Guarantor, before any
court or arbitrator or any governmental body, agency or official which in any
manner draws into question the validity or enforceability of this Guaranty; and
(f) The execution, delivery and performance by Guarantor of this
Guaranty does not constitute, to the best knowledge of Guarantor, a "fraudulent
conveyance," "fraudulent obligation" or "fraudulent transfer" within the
meanings of the Uniform Fraudulent Conveyances Act or Uniform Fraudulent
Transfer Act, as enacted in any jurisdiction.
10. All notices and other communications hereunder shall be delivered,
in the manner and with the effect provided in the Credit Agreement and, in the
case of the Guarantor, in care of the Borrower.
11. This Guaranty shall be binding upon the successors and assigns of
Guarantor and shall inure to the benefit of the Administrative Agent's and the
Guarantied Parties' successors and assigns. This Guaranty cannot be assigned by
Guarantor without the prior written consent of the Administrative Agent and the
Guarantied Parties which shall be in the Administrative Agent's and the
Guarantied Parties' sole and absolute discretion.
12. No failure or delay by the Administrative Agent or the Guarantied
Parties in exercising any right, power or privilege hereunder shall operate as a
waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law.
13. The Guarantor shall pay (a) all reasonable out-of-pocket expenses
of the Administrative Agent and the Guarantied Parties, including reasonable
fees and disbursements of counsel (including the allocated cost of inhouse
counsel and staff) for the Administrative Agent, in connection with any waiver
or consent hereunder or any amendment hereof and (b) all out-of-pocket expenses
incurred by the Administrative Agent and the Guarantied Parties, including fees
and disbursements of counsel (including the allocated cost of inhouse counsel
and staff), in connection with the enforcement of this Guaranty (whether or not
suit is brought).
14. No modification of this Guaranty shall be effective for any purpose
unless it is in writing and executed by an officer of the Administrative Agent
authorized to do so. This
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Cinemark Mexico (USA) Guaranty
92
Guaranty merges all negotiations, stipulations and provisions relating to the
subject matter of this Guaranty which preceded or may accompany the execution of
this Guaranty.
15. This Guaranty and the rights and obligations of the parties
hereunder shall be construed in accordance with and be governed by the laws of
the State of California without reference to the principles of conflicts of laws
thereof.
16. This Guaranty may be executed in any number of counterparts and by
the different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument.
17. Terms not defined herein shall have the meanings assigned to them
in the Credit Agreement.
18. Any indebtedness of the Borrower now or hereafter held by Guarantor
is hereby subordinated to the indebtedness of the Borrower to the Administrative
Agent and the Guarantied Parties; and such indebtedness of the Borrower to
Guarantor if the Administrative Agent so requests shall be collected, enforced
and received by Guarantor as trustee for the Administrative Agent and the
Guarantied Parties and be paid over to the Administrative Agent on account of
the indebtedness of the Borrower to the Administrative Agent and the Guarantied
Parties but without reducing or affecting in any manner the liability of
Guarantor under the other provisions of this guaranty.
20. It is not necessary for the Guarantied Parties to inquire into the
powers of the Borrower or of the officers, directors or agents acting or
purporting to act on its behalf, and any indebtedness made or created in
reliance upon the professed exercise of such powers shall be guaranteed
hereunder.
DATED AS OF:
--------------------------
CINEMARK USA, INC.
By
-------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Chief Financial Officer
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, AS
ADMINISTRATIVE AGENT
By
-------------------------------
▇▇▇▇▇ ▇▇▇▇▇
Vice President
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Cinemark Mexico (USA) Guaranty
93
EXHIBIT D
NOTICE OF ASSIGNMENT AND ACCEPTANCE
______ , 19
TO: Bank of America National Trust
and Savings Association, as Administrative Agent
Reference is made to that certain Credit Agreement dated as of November
16, 1998 among Cinemark Mexico (USA), Inc., a Delaware corporation (the
"Borrower"), the banks from time to time party thereto, and Bank of America
National Trust and Savings Association, as Administrative Agent and Issuing Bank
(the "Agreement;" the terms defined therein being used herein as therein
defined).
1. We hereby give you notice of, and request your consent to, the
assignment by _______________________(the "Assignor") to ______________________
(the "Assignee") of ____% of the right, title and interest of the Assignor in
and to the Credit Agreement, including without limitation the right, title and
interest of the Assignor in and to the Commitment of the Assignor, and all
outstanding Loans made by the Assignor. Before giving effect to such assignment:
(a) the aggregate amount of the Assignor's Commitment is
$__________ ; and
(b) the aggregate principal amount of its outstanding Loans is
$_________.
2. The Assignee hereby represents and warrants that it has complied
with the requirements of Section 10.8(a) of the Credit Agreement in connection
with this assignment.
3. The Assignee agrees that, upon receiving your consent to such
assignment and from and after ___________________ , the Assignee will be bound
by the terms of the Credit Agreement, with respect to the interest in the Credit
Agreement assigned to it as specified above, as fully and to the same extent as
if the Assignee were the Bank originally holding such interest in the Credit
Agreement.
4. The following administrative details apply to the Assignee:
(a) Offshore Lending Office:
Assignee name:
-----------------------------
Address:
-----------------------------------
-------------------------------------------
Attention:
---------------------------------
Telephone: ( )
--- --------------------------
Telecopier: ( )
--- --------------------------
D - 1
Cinemark Mexico (USA) Notice of Assignment and Acceptance
94
(b) Domestic Lending Office:
Assignee name:
-----------------------------
Address:
-----------------------------------
-------------------------------------------
Attention:
---------------------------------
Telephone: ( )
--- --------------------------
Telecopier: ( )
--- --------------------------
(c) Notice Address:
Assignee name:
-----------------------------
Address:
-----------------------------------
-------------------------------------------
Attention:
---------------------------------
Telephone: ( )
--- --------------------------
Telecopier: ( )
--- --------------------------
(d) Payment Instructions: Account No.:
Account No.
--------------------------------
Attention:
---------------------------------
Reference:
---------------------------------
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this Assignment
and Acceptance to be executed by their respective duly authorized officials,
officers or agents as of the date first above mentioned.
Very truly yours,
[NAME OF ASSIGNOR]
By:
-----------------------------------
Title:
--------------------------------
[NAME OF ASSIGNEE]
By:
-----------------------------------
Title:
--------------------------------
D - 2
Cinemark Mexico (USA) Notice of Assignment and Acceptance
95
We hereby consent to the
foregoing assignment.
CINEMARK MEXICO (USA), INC.
By:
-----------------------------------
Title:
--------------------------------
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
AS ADMINISTRATIVE AGENT
By:
-----------------------------------
Vice President
D - 3
Cinemark Mexico (USA) Notice of Assignment and Acceptance
96
EXHIBIT E
PROMISSORY NOTE
$ ___________ November 16, 1998
FOR VALUE RECEIVED, the undersigned CINEMARK MEXICO (USA), INC. (the
"Borrower") promises to pay to the order of ____________________ (the "Bank") on
the Maturity Date the principal amount of $ ____________________ or, if less,
the unpaid principal amount of Loans owing to the Bank pursuant to that certain
Credit Agreement dated as of November 16, 1998, among the Borrower, the Banks
which are from time to time parties thereto and Bank of America National Trust
and Savings Association, as Administrative Agent (in such capacity, the
"Administrative Agent") (as amended, restated, extended or otherwise modified
from time to time, the "Credit Agreement").
The Borrower also promises to pay interest on the unpaid principal
amount hereof until maturity (whether by acceleration or otherwise), and also to
pay interest after maturity on amounts not paid when due and until paid in full,
at the rates per annum and on the dates specified in the Credit Agreement.
This Note is one of the Notes referred to in the Credit Agreement, to
which reference is made for a statement of the terms and conditions on which the
Borrower is permitted and required to make prepayments and repayments of
principal of the Loans evidenced by this Note and on which such Loans may be
declared to be immediately due and payable.
All payments of principal and interest in respect of this Note shall be
made in lawful money of the United States of America in same day funds at the
office of Bank of America National Trust and Savings Association, ABA No.
▇▇▇-▇▇▇-▇▇▇, for credit to: BANCONTROL Account No. 12332-16503, Reference:
Cinemark Mexico (USA), Inc., or at such other place as shall be designated in
writing for such purpose in accordance with the terms of the Credit Agreement.
The principal amount, interest periods, the interest rates applicable,
maturity and each payment of interest and principal of the Loans shall be
recorded and endorsed on the grid attached to this Note; provided, however, that
the failure by the Bank to make any such recordation or endorsement shall not
limit or otherwise affect the obligations of the Borrower hereunder or under the
Credit Agreement, nor the validity of any payment made by the Borrower. In any
event, the Bank's records shall be conclusive evidence, absent manifest error,
of any Loan, interest periods, rates of interests, maturities and payments
thereunder.
This Note is one of the notes described in the Credit Agreement and the
Bank, or any holder hereof, is entitled to all the rights, including
acceleration rights, remedies, security, benefits and privileges provided for in
the Credit Agreement. Terms not defined herein have the meanings assigned to
them in the Credit Agreement.
E - 1
Cinemark Mexico (USA) Promissory Note
97
The Borrower hereby promises to pay all reasonable out-of-pocket
expenses and reasonable attorneys' fees (including any allocated fees and costs
of in-house legal staff) incurred in the collection or enforcement of this Note.
The Borrower hereby waives notice of default, presentment, demand for
payment, protest and any notice of nonpayment or dishonor.
THIS NOTE SHALL BE GOVERNED BY, CONSTRUED AND ENFORCED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the Borrower has caused this Note to be executed
and delivered by its duly authorized officer, as of the day and year first above
written.
CINEMARK MEXICO (USA), INC.
By:
-----------------------------------
Name:
--------------------------------
Title:
--------------------------------
E - 2
Cinemark Mexico (USA) Promissory Note
98
LOANS AND PAYMENTS OF PRINCIPAL AND INTEREST
TYPE INTEREST
OF DATE OF AMOUNT RATE OF AMOUNT PRINCIPAL INTEREST NOTATION
LOAN LOAN OF LOAN LOAN DUE REPAID PAID BY
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
E - 1
Cinemark Mexico (USA) Promissory Note
99
EXHIBIT F
INTERCOMPANY SUBORDINATION AGREEMENT
TO: Bank of America National Trust and Savings Association,
as Administrative Agent (the "Administrative Agent")
Ladies and Gentlemen:
Reference is made to the Credit Agreement dated as of November 16, 1998
(as from time to time amended, extended, restated, modified or supplemented, the
"Credit Agreement;" capitalized terms used herein shall have the meanings
assigned to them in the Credit Agreement) among Cinemark Mexico (USA), Inc. (the
"Borrower"), the banks from time to time party thereto (the "Banks") and Bank of
America National Trust and Savings Association, as Administrative Agent (the
"Administrative Agent") for said Banks. It is a requirement of the Credit
Agreement that the Subordinated Creditors enter into this Subordination
Agreement.
Borrower and its Subsidiaries (each, a "Subordinated Obligor") are or
may become indebted or otherwise obligated to Cinemark USA, Inc. or its
Subsidiaries (each, a "Subordinated Creditor"), and desire that the Banks extend
financial accommodations to Borrower. For the purpose of inducing the Banks to
grant, continue or renew such financial accommodations, and in consideration
thereof, each Subordinated Creditor agrees as follows:
1. Any and all claims of the Subordinated Creditor against any
Subordinated Borrower, now or hereafter existing, (the "Subordinated Debt"),
are, and shall be at all times, subject and subordinate to any and all
Obligations owing to the Administrative Agent and the Banks (collectively, the
"Senior Creditor"). Except as otherwise permitted under the Credit Agreement,
all Subordinated Debt is unsecured.
2. If any Default or Event of Default as defined in the Credit
Agreement (as herein defined) shall at any time occur and be continuing (each, a
"Default"), then at all times thereafter until such Default shall have been
cured, or such Default or the benefits of this sentence shall have been waived
in writing by the Administrative Agent, no Subordinated Borrower shall, directly
or indirectly, make any payment or distribution of assets with respect to the
Subordinated Debt, except as set forth in paragraph 10 hereof. With respect to
any Subordinated Debt which is permitted to be secured, the relevant
Subordinated Creditors agree to not foreclose or take any action with respect
to, or otherwise realize upon, such lien unless and until payment could
otherwise be made on such Subordinated Debt hereunder.
3. In case of (a) any assignment for the benefit of creditors by any
Subordinated Borrower, (b) any proceedings under any bankruptcy or other debtor
relief laws being instituted by or against any Subordinated Borrower, (c) the
appointment of any receiver for any Subordinated Borrower's business or assets,
or (d) any dissolution or winding up of the affairs of any Subordinated Borrower
and any assignee, trustee in bankruptcy, receiver, debtor in possession or other
person or persons in charge, are hereby directed to pay to the Administrative
Agent the full amount of the Obligations (including interest and fees to the
date of payment)
F - 1
Cinemark Mexico (USA) Intercompany Subordination Agreement
100
before making any payment of principal or interest to any Subordinated Creditor
under any Subordinated Debt (whether or not from the proceeds of any security
interest securing any Subordinated Debt). With respect to any Subordinated Debt
which is permitted to be secured, until payment in full of the Obligations
(including interest and fees to the date of payment), any proceeds of such lien
shall be applied to the Obligations.
4. The Senior Creditor is hereby authorized by each Subordinated
Creditor to: (a) renew, compromise, extend, accelerate or otherwise change the
time of payment, or any other terms, of any existing or future Obligations or
any part thereof, (b) increase or decrease the rate of interest payable thereon,
(c) exchange, enforce, waive, release, or fail to perfect any security therefor,
(d) apply such security and direct the order or manner of sale thereof in such
manner as the Senior Creditor may at its discretion determine, (e) release the
Borrower or any guarantor of any indebtedness of the Borrower from liability,
and (f) make optional future advances to the Borrower, all without notice to any
Subordinated Creditor and without affecting the subordination provided by this
Agreement.
5. Each Subordinated Creditor acknowledges and agrees that it shall
have the sole responsibility for obtaining from any Subordinated Borrower such
information concerning any Subordinated Borrower's financial condition or
business operations as they may require, and that Senior Creditor shall not have
any duty at any time to disclose to any Subordinated Creditor any information
relating to the business operations or financial condition of any Subordinated
Borrower.
6. On the written request of the Administrative Agent, each
Subordinated Creditor shall ▇▇▇▇ any note or instrument evidencing any
Subordinated Debt with a conspicuous legend which reads substantially as
follows:
"THIS [NOTE] IS SUBORDINATED TO CERTAIN PRESENT OR FUTURE
INDEBTEDNESS OWING FROM THE MAKER TO THE BANKS PARTY TO THE CREDIT
AGREEMENT DATED AS OF NOVEMBER 16, 1998 AMONG CINEMARK MEXICO (USA),
INC., THE BANKS PARTY THERETO AND BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, AS ADMINISTRATIVE AGENT, AS AMENDED FROM TIME TO
TIME, AND MAY BE ENFORCED ONLY IN ACCORDANCE WITH THAT CERTAIN
SUBORDINATION AGREEMENT DATED AS OF NOVEMBER 16, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇
▇▇▇▇▇▇▇ NATIONAL TRUST AND SAVINGS ASSOCIATION, AS ADMINISTRATIVE AGENT
AND PROMISOR."
7. In the event that any payment or any cash or noncash distribution is
made to any Subordinated Creditor in violation of the terms of this Agreement
(including receiving proceeds from realization upon any security interest
securing Subordinated Debt), such Subordinated Creditor shall receive the same
in trust for the benefit of the Senior Creditor, and shall forthwith remit it to
the Administrative Agent in the form in which it was received, together with
such endorsements or documents as may be necessary to effectively negotiate or
transfer the same to the Administrative Agent.
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101
8. For violation of this Agreement, each Subordinated Creditor shall be
jointly and severally liable for all losses and damages sustained by reason of
such breach.
9. Each Subordinated Creditor agrees not to sell, assign, transfer,
pledge, hypothecate, or encumber any Subordinated Debt except subject expressly
to this Agreement and not to take any lien or security on any of Subordinated
Borrower's property so long as any Obligations shall exist. This Agreement shall
be binding upon the heirs, successors and assigns of the Subordinated Creditors
and Subordinated Borrowers.
10. Notwithstanding the provisions of Section 2, (a) a Subordinated
Borrower may make payments to a Subordinated Creditor on Subordinated Debt for
its respective share of consolidated tax liability and (b), so long as no
Default or Event of Default has occurred, a Subordinated Creditor may receive
principal and noncash interest payments on the Subordinated Debt; provided,
however, that such payments in the case of subsection (a) does not cause a
Default or Event of Default under any Obligations.
11. This Agreement may be executed in any number of counterparts and
all of such counterparts taken together shall be deemed to constitute one and
the same instrument.
12. THIS AGREEMENT AND ANY INSTRUMENT OR AGREEMENT REQUIRED HEREUNDER,
SHALL BE GOVERNED BY AND CONSTRUED UNDER THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of November 16, 1998.
THE SUBORDINATED CREDITORS LISTED ON
SCHEDULE A HERETO:
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
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102
ACCEPTANCE OF SUBORDINATION
AGREEMENT BY SUBORDINATED BORROWERS
The undersigned being the Subordinated Borrowers named in the foregoing
Subordination Agreement, hereby accept and consent thereto and agree to be bound
by all the provisions thereof, not to make any payment to or on behalf of the
Subordinated Creditors in violation of such agreement and to recognize all
priorities and other rights granted thereby to the Senior Creditor, and its
successors and assigns, and to perform in accordance therewith.
Dated: November 16, 1998
THE SUBORDINATED OBLIGORS LISTED ON
SCHEDULE A HERETO:
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
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103
exhibit a to intercompany subordination agreement
SUBORDINATED CREDITORS
SUBORDINATED BORROWERS
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Cinemark Mexico (USA) Intercompany Subordination Agreement