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EXHIBIT 10.15(a)
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CINEMA PROPERTIES, INC., as Borrower
and
LEHMAN BROTHERS BANK FSB,
individually and as Agent for one ore more Co-Lenders
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LOAN AGREEMENT
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Dated: As of December 15, 2000
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TABLE OF CONTENTS
Section 1. THE NOTE AND THE SECURITY INSTRUMENTS............................1
Section 2. LOAN DOCUMENTS...................................................1
Section 3. PROPERTY RELEASES................................................2
Section 4. INTEREST RATE CAP AGREEMENT......................................3
Section 5. INTEREST COVERAGE RATIO..........................................3
Section 6. [INTENTIONALLY OMITTED...........................................5
Section 7. EVENTS OF DEFAULT................................................5
Section 8. SYNDICATION......................................................6
Section 9. INCORPORATION OF PROVISIONS.....................................11
Section 10. FURTHER ASSURANCES..............................................11
Section 11. REPRESENTATIONS AND WARRANTIES..................................11
Section 12. CONSTRUCTION OF AGREEMENT.......................................11
Section 13. PARTIES BOUND, ETC..............................................11
Section 14. WAIVERS.........................................................12
Section 15. GOVERNING LAW...................................................12
Section 16. SEVERABILITY....................................................12
Section 17. NOTICES.........................................................12
Section 18. FEES AND EXPENSES...............................................12
Section 19. MODIFICATION....................................................13
Section 20. NO ORAL AGREEMENTS..............................................13
Section 21. DEFINITIONS.....................................................13
Section 22. RECOURSE........................................................13
Section 23. OUT PARCEL RELEASE..............................................13
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THIS LOAN AGREEMENT made as of the 15th day of December, 2000
between CINEMA PROPERTIES, INC., a Delaware corporation, with its principal
place of business at c/o Cinemark, 3900 Dallas Parkway, Suite 500, Plano, Texas
75093 ("Borrower") and LEHMAN BROTHERS BANK FSB, a federal stock savings bank,
having an office at 921 North Orange Street, Wilmington, Delaware 19801,
individually and as agent for one or more Co-Lenders (hereinafter referred to as
"Lender");
WITNESSETH:
WHEREAS, at the request of Borrower, Lender has agreed to fund
to Borrower a cross-collateralized loan in the principal amount of $77,000,000
(the "Loan") pursuant to the terms of this Agreement;
WHEREAS, the Loan is evidenced by that certain note of even
date herewith made by Borrower to Lender in the original principal amount of
$77,000,000, (as the same may be amended, modified, restated, replaced, split or
severed, the "Notes") and secured by those first mortgages, deeds of trust and
other real estate security instruments, each of even date herewith, made by
Borrower and each in the amount of $77,000,000 (collectively, as the same may be
amended, modified, restated, replaced, split or severed, the "Security
Instruments"), as more fully described on Schedule 1 hereto, covering six (6)
parcels of land and improvements and equipment or equipment leases thereon, as
described on Schedule 2 hereto, and more fully described in the Security
Instruments (the "Parcels", each a "Parcel");
NOW, THEREFORE, in consideration of ten dollars ($10) and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, Lender and Borrower hereby covenant and agree as follows:
1. THE NOTE AND THE SECURITY INSTRUMENTS. The indebtedness of
Borrower shall be: (i) evidenced by the Note, and (ii) secured by collateral
(the "Collateral") which includes, among other things, (a) the Security
Instruments made by Borrower covering the fee estate of Borrower, in each
Parcel, the Improvements (as such term is defined in the Security Instruments)
located on each Parcel, the Equipment Leases (as defined in the Security
Instruments) and other property, rights and interests of Borrower in the same
(individually, a "Property" and collectively, the "Properties"), (b) assignments
of leases and rents each given by Borrower to Lender dated the date hereof and
covering the Properties (the "Assignments of Rents"), (c) conditional
assignments of management agreement given by Borrower to Lender security dated
the date hereof (the "Assignment of Management Agreements"), (d) assignments and
grants of a security interest in the Equipment Leases to Lender pursuant to the
assignments and security agreements from Borrower to Lender dated the date
hereof (the "Security Agreements"), and (e) the Assignment of Rights Under
Contribution Agreement dated as of the date hereof by Borrower to Lender (the
"Assignment of Contribution Agreement").
2. LOAN DOCUMENTS. The term "Loan Documents" as used in this
Agreement shall collectively mean the Note, the Security Instruments, the
Assignments of Rents, the Environmental Indemnity Agreement (as defined in the
Security Instruments), the Assignment of Management
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Agreements, the Security Agreements, the Assignment of Contribution Agreement,
the Other Security Documents (as defined in the Security Instruments), this
Agreement and all other documents and instruments of any nature whatsoever
executed or delivered in connection with the Loan.
3. PROPERTY RELEASES. Subject to the terms and conditions set
forth herein, a Borrower shall have the right, from time to time, on any Payment
Date (as defined in the Notes), or on any Business Day provided that a payment
of the Interest Shortfall (as defined in the Note) is made, to obtain a release
(a "Property Release") of a Property (other than the Properties identified as
property 00231 and property 00251 on Schedule 2 (the "Plano Properties")) from
the lien of the related Security Instruments (i) provided that no Event of
Default has occurred and is continuing, (ii) subject to compliance with the
provisions set forth below in this Section 3; (iii) provided that the Release
Premises is no longer subject to the Management Agreement (as defined in the
Security Instrument); and (iv) provided that, legal, record, economic and
beneficial ownership of the Property for which a Property Release is being
requested (the "Release Premises") is simultaneously with the granting of the
Property Release transferred (a "Release Premises Transfer") to and shall be
owned immediately after such Property Release by a person(s), party(ies) or
entity(ies) other than Borrower. In the event that Borrower seeks to release a
Property from the lien of the related Security Instruments, Lender shall release
such Property from the lien of the related Security Instrument and the Loan
Documents, but only upon compliance with all of the following conditions:
(a) Receipt by Lender, at least thirty (30) days but no more
than sixty (60) days of prior written notice of Borrower's request to
obtain a release of the Release Premises;
(b) Receipt by Lender of a certificate of Borrower certifying
the requirements set forth in Paragraphs 3(f) of this Agreement shall
be true after giving effect to such transfer;
(c) Receipt by Lender of a wire transfer of immediately
available federal funds in an amount equal to the release price for the
Release Premises as set forth on Schedule 3 attached hereto and made a
part hereof 125% of the Allocated Loan Amount (the "Release Price"),
together with (i) all accrued and unpaid interest on the amount of
principal being prepaid, (ii) if such payment is not made on a Payment
Date, the Interest Shortfall with respect to the amount prepaid, (iii)
Breakage Costs (as defined in the Note); and (iv) all other sums due
under the Note in connection with a partial prepayment;
(d) If applicable, receipt by Lender of evidence to confirm
that the Release Premises is simultaneously with the Property Release
being transferred to a party other than Borrower;
(e) Payment of all Lender's reasonable costs and expenses,
including costs and reasonable counsel fees and disbursements incurred
in connection with the release of the Property from the lien of the
related Security Instruments and the review and approval of the
documents and information required to be delivered in connection
therewith ("Property Release Expenses");
(f) Receipt by Lender of evidence satisfactory to Lender that
the Interest Coverage Ratio (as defined below) for the Interest
Coverage Ratio Determination Date
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(defined below) immediately preceding the Property Release with respect
to the Properties remaining encumbered by the liens of the Security
Instruments after giving effect to the Property Release shall be equal
to or greater than the greater of (i) 1.60 to 1 or (ii) the Interest
Coverage Ratio with respect to the Properties then encumbered by the
liens of the Security Instruments immediately prior to such release,
for the Interest Coverage Ratio Determination Date immediately
preceding the date of the proposed Property Release; and
(g) Notwithstanding anything to the contrary contained herein,
Borrower shall not have the right to release either of the Plano
Properties from the liens of the related Security Instruments.
4. INTEREST RATE CAP AGREEMENT. Borrower shall deliver
to Lender on the date hereof and maintain until the Maturity Date (as defined in
the Notes) an interest rate cap agreement (the "Cap Agreement") that complies
with each of the following conditions:
(i) the Cap Agreement shall be issued by a counterparty (the
"Cap Seller") with a long-term unsecured debt rating of not less than "AAA" (or
the equivalent) from the Rating Agencies (as defined in the Cash Management
Agreement dated the date hereof between Borrower and Lender (the "Cash
Management Agreement"));
(ii) the Cap Agreement shall be drawn on standard ISDA
documentation and otherwise be satisfactory to Lender;
(iii) the Cap Agreement shall be in a notional amount equal to
$77,000,000.00 and have a strike price of 6.58% per annum (the "Strike Price");
(iv) the Cap Agreement shall have an expiration date of
December 31, 2005;
(v) the Cap Agreement shall obligate the Cap Seller to make
quarterly payments equal to the excess of 3 month LIBOR over the Strike Price,
calculated on the notional amount; and
(vi) the Cap Agreement shall be assigned by Borrower to Lender
pursuant to that certain assignment of interest rate cap agreement (the "Cap
Assignment") from Borrower to Lender and acknowledged and agreed to in writing
by Cap Seller, which provides, among other things, for the direct payment of all
sums due under the Cap Agreement from the Cap Seller to be made directly to
Lender.
5. INTEREST COVERAGE RATIO.
(a) Within forty-five (45) days after each Interest Coverage
Ratio Determination Date, Borrower shall determine and certify in writing to
Lender the Interest Coverage Ratio (defined below) as of March 31, 2001 and on
the last day of each calendar quarter thereafter, through and including the
Maturity Date (each an "Interest Coverage Ratio Determination Date").
(b) The term "Interest Coverage Ratio" shall mean the ratio of
(i) the NOI (hereinafter defined) produced by the operation of the Properties on
an aggregate basis during the
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twelve (12) month period ending on each Interest Coverage Ratio Determination
Date to (ii) the sum of the monthly payments of interest required to be made on
each Payment Date pursuant to the terms of the Notes, calculated at an interest
rate equal to (A) prior to the occurrence of a Triggering Event, the lesser of
(I) the Applicable Interest Rate (as defined in the Notes) and (II) (A) the
Strike Price plus 5.75% per annum, but in no event less than the Strike Price
plus 5.25% per annum, or (B) after the occurrence of a Triggering Event, (X) the
Strike Price plus 5.75% per annum, for the period through and including the
Initial Maturity Date, (Y) the Strike Price plus 6.25% per annum during the
fourth Loan Year (as defined in the Notes) and (Z) the Strike Price plus 6.75%
per annum during the fifth Loan Year, for the twelve (12) calendar month period
immediately following such Interest Coverage Ratio Determination Date.
(c) The term "NOI" as used herein shall mean, with respect to
the Property, the gross income derived from the operation of the Property, less
Expenses (hereinafter defined) attributable to the Property. NOI shall include
Rents actually received and earned in accordance with GAAP and such other
income, including but not limited to ticket sales, any rent loss or business
interruption insurance proceeds, parking, vending or concession income, late
fees, forfeited security deposits and other miscellaneous tenant charges and
Expenses actually paid or payable on an accrual basis attributable to the
Property on an annualized basis during the twelve (12) month period ending on
each Interest Coverage Ratio Determination Date, as set forth on operating
statements satisfactory to Lender.
Notwithstanding the foregoing, NOI shall not include (a)
condemnation or insurance proceeds (excluding rent or business interruption
insurance proceeds); or (b) any proceeds from the sale, exchange, transfer,
financing or refinancing of all or any portion of the Property.
(d) The term "Expenses" as used herein shall mean, with
respect to the Property, for any given period (and shall include the pro rata
portion for such period of all such expenses attributable to, but not paid
during, such period), all expenses to be paid or payable, as determined in
accordance with GAAP, by Borrower during that period in connection with the
operation of the Property for which it is to be determined, including without
limitation:
(i) expenses for cleaning, repair, maintenance,
decoration and painting of the Property (including, without limitation,
parking lots and roadways), net of any insurance proceeds in respect of
any of the foregoing;
(ii) wages (including overtime payments), benefits,
payroll taxes and all other related expenses for Borrower's on-site
personnel, up to and including (but not above) the level of the on-site
manager, engaged in the repair, operation and maintenance of the
Property and service to tenants and on-site personnel engaged in audit
and accounting functions performed by Borrower;
(iii) base management fees approved by Lender and
equal to the greater of (A) four percent (4%) of the gross income
derived from the operation of the Property or (B) the actual base
management fees incurred by Borrower. Such fees shall include all base
fees for management services whether such services are performed at
such Property or
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off-site, but shall not include any Incentive Management Fees (as
defined in the Cash Management Agreement);
(iv) the cost of all electricity, oil, gas, water,
steam, heat, ventilation, air conditioning and any other energy,
utility or similar item and the cost of building and cleaning supplies;
(v) the cost of any leasing commissions and tenant
concessions and improvements payable by Borrower pursuant to any Leases
which are in effect for the Property for such period as such amounts
are recognized in accordance with GAAP, provided however that in no
event less than on a straight line basis during the remaining
respective base term (excluding extension, renewal or other option);
(vi) Insurance Premiums;
(vii) all Equipment Lease Payments (as defined in the
Cash Management Agreement);
(viii) the cost of all equipment to be used in the
ordinary course of business, which is not capitalized in accordance
with GAAP;
(ix) Taxes and Other Charges;
(x) advertising and other marketing costs and
expenses;
(xi) casualty losses to the extent not reimbursed by
a third party or covered by insurance; and
(xii) film rentals, concession supplies, salaries and
wages.
Notwithstanding the foregoing, Expenses shall not include (A)
depreciation or amortization or any other non-cash item of expense; (B)
interest, fees, costs and expense reimbursements of Lender or its agents in
originating or administering the Loan but not in exercising any of its rights
under the Loan Documents or the Other Security Documents, or any fees, expenses
or premiums associated with or arising from the Cap Agreement; (C) any
expenditure (other than leasing commissions, tenant concessions and improvements
and replacement reserves) which is properly treatable as a capital item under
GAAP; (D) income taxes or franchise taxes; (E) costs, expenses or fees related
to a Syndication (defined below) of the Loan; or (F) legal, accounting or other
professional fees and expenses.
6. [INTENTIONALLY OMITTED]
7. EVENTS OF DEFAULT. The term "Event of Default" as used in this
Agreement shall have the meaning ascribed to such term in the Note and the
Security Instruments.
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Upon the occurrence of an Event of Default or a default beyond
applicable notice and grace periods, if any, under this Agreement and, if Lender
shall not have exercised its option under clause (i) below, during the
continuance thereof, Lender (i) may, at its option and in its sole discretion,
declare the Debt immediately due and payable, and (ii) may pursue any and all
remedies provided for in the Loan Documents, or otherwise available.
8. SYNDICATION.
(a) Syndication. The provisions of this Section 8 shall only
apply in the event that the Loan is syndicated in accordance with the provisions
of this Section 8 set forth below.
(b) Sale of Loan, Co-Lenders, Participations and Servicing.
(i) Lender and any Co-Lender may, at their option, without
Borrower's consent (but with notice to Borrower), sell with
novation all or any part of their right, title and interest
in, and to, and under the Loan, to one or more additional
Co-Lenders (the "Syndication"). Each additional Co-Lender
shall enter into an assignment and assumption agreement (the
"Assignment and Assumption") assigning a portion of Lender's
or Co-Lender's rights and obligations under the Loan, and
pursuant to which the additional Co-Lender accepts such
assignment and assumes the assigned obligations. From and
after the effective date specified in the Assignment and
Assumption (i) each Co-Lender shall be a party hereto and to
each Loan Document to the extent of the applicable percentage
or percentages set forth in the Assignment and Assumption and,
except as specified otherwise herein, shall succeed to the
rights and obligations of Lender and the Co-Lenders hereunder
and thereunder in respect of the Loan, and (ii) Lender, as
lender and each Co-Lender, as applicable, shall, to the extent
such rights and obligations have been assigned by it pursuant
to such Assignment and Assumption, relinquish its rights and
be released from its obligations hereunder and under the Loan
Documents.
(ii) The liabilities of Lender and each of the Co-Lenders
shall be several and not joint, and Lender's and each
Co-Lender's obligations to Borrower under this Agreement shall
be reduced by the amount of each such Assignment and
Assumption. Neither Lender nor any Co-Lender shall be
responsible for the obligations of any other Co-Lender. Lender
and each Co-Lender shall be liable to Borrower only for their
respective proportionate shares of the Loan. If for any reason
any of the Co-Lenders shall fail or refuse to abide by their
obligations under this Agreement, Lender and the other
Co-Lenders shall not be relieved of their obligations, if any,
hereunder, including their obligations to make their pro rata
share of any advance; notwithstanding the foregoing, Lender
and the Co-Lenders shall have the right, but not the
obligation, at their sole option, to make the defaulting
Co-Lender's pro rata share of such advance pursuant to an
intercreditor agreement that may be entered into between
Lender, individually as a Co-Lender and as Agent, and the
Co-Lenders, as same be further supplemented, amended and
modified (the "Intercreditor Agreement").
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(iii) Borrower agrees that it shall, in connection with any
sale of all or any portion of the Loan, whether in whole or to
an additional Co-Lender or Participant, within ten (10)
business days after requested by Agent, furnish Agent with the
certificates required under Section 7.4 of the Security
Instrument and such other information as reasonably requested
by any additional Co-Lender or Participant in performing its
due diligence in connection with its purchase of an interest
in the Loan.
(iv) Lender (or an Affiliate of Lender) shall act as
administrative agent for itself and the Co-Lenders (together
with any successor administrative agent, the "Agent") pursuant
to this Section 7(b). Borrower acknowledges that Lender, as
Agent, shall have the sole and exclusive authority to execute
and perform this Agreement and each Loan Document on behalf of
itself, as Lender and as agent for itself and the Co-Lenders
subject to the terms of the Intercreditor Agreement. Lender
acknowledges that Lender, as Agent, shall retain the exclusive
right to grant approvals and give consents with respect to the
operating budgets required to be delivered hereunder and with
respect to matters concerning the establishment and
administration of the Lockbox Account and the other Accounts
described in the Cash Management Agreement. Except as
otherwise provided herein, Borrower shall have no obligation
to recognize or deal directly with any Co-Lender, and no
Co-Lender shall have any right to deal directly with Borrower
with respect to the rights, benefits and obligations of
Borrower under this Agreement, the Loan Documents or any one
or more documents or instruments in respect thereof. Borrower
may rely conclusively on the actions of Lender as Agent to
bind Lender and the Co-Lenders, notwithstanding that the
particular action in question may, pursuant to this Agreement
or the Intercreditor Agreement be subject to the consent or
direction of the Co-Lenders. Lender may resign as Agent of the
Co-Lenders, in its sole discretion, without the consent of
Borrower; provided however, that Lender may only resign as
Agent (i) after an Event of Default has occurred or (ii) if
required to by the Co-Lenders. Upon any such resignation, a
successor Agent shall be determined pursuant to the terms of
the Intercreditor Agreement. The term Agent shall mean any
successor Agent.
Notwithstanding any provision to the contrary in this
Agreement, the Agent shall not have any duties or
responsibilities except those expressly set forth herein (and
in the Intercreditor Agreement) and no covenants, functions,
responsibilities, duties, obligations or liabilities of Agent
shall be implied by or inferred from this Agreement, the
Intercreditor Agreement, or any other Loan Document, or
otherwise exist against Agent.
(v) Except to the extent its obligations hereunder and its
interest in the Loan have been assigned pursuant to one or
more Assignments and Assumption, Lehman Savings Bank FSB, as
Agent, shall have the same rights and powers under this
Agreement as any other Co-Lender and may exercise the same as
though it were not Agent, respectively. The term "Co-Lender"
or "Co-Lenders" shall, unless otherwise expressly indicated,
include Lehman Savings Bank FSB in its individual capacity.
Lender and the other Co-Lenders and their respective
affiliates may accept deposits
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from, lend money to, act as trustee under indentures of, and
generally engage in any kind of business with, Borrower, or
any Affiliate of Borrower and any person or entity who may do
business with or own securities of Borrower or any Affiliate
of Borrower or any Affiliate thereof, all as if they were not
serving in such capacities hereunder and without any duty to
account therefor to each other.
(vi) If required by any Co-Lender, each Borrower hereby agrees
to execute supplemental notes in the principal amount of such
Co-Lender's pro rata share of the Loan substantially in the
form of the Note, and such supplemental note shall (i) be
payable to order of such Co-Lender, (ii) be dated as of the
Closing Date, and (iii) mature on the Maturity Date. Such
supplemental note shall provide that it evidences a portion of
the existing indebtedness hereunder and under the Note and not
any new or additional indebtedness of Borrower. The term
"Note" as used in this Agreement and in all the other Loan
Documents shall include all such supplemental notes.
(vii) Lender, as Agent, shall maintain at its domestic lending
office or at such other location as Lender, as Agent, shall
designate in writing to each Co-Lender and Borrower a copy of
each Assignment and Assumption delivered to and accepted by it
and a register for the recordation of the names and addresses
of the Co-Lenders, the amount of each Co-Lender's
proportionate share of the Loan and the name and address of
each Co-Lender's agent for service of process (the
"Register"). The entries in the Register shall be conclusive
and binding for all purposes, absent manifest error, and
Borrower, Lender, as Agent, and the Co-Lenders may treat each
person or entity whose name is recorded in the Register as a
Co-Lender hereunder for all purposes of this Agreement. The
Register shall be available for inspection and copying by
Borrower or any Co-Lender during normal business hours upon
reasonable prior notice to the Agent. A Co-Lender may change
its address and its agent for service of process upon written
notice to Lender, as Agent, which notice shall only be
effective upon actual receipt by Lender, as Agent, which
receipt will be acknowledged by Lender, as Agent, upon
request.
(viii) Notwithstanding anything herein to the contrary, any
financial institution or other entity may be sold a
participation interest in the Loan by Lender or any Co-Lender
without Borrower's consent (such financial institution or
entity, a "Participant") (x) if such sale is without novation
and (y) if the other conditions set forth in this paragraph
are met. No Participant shall be considered a Co-Lender
hereunder or under the Note or the Loan Documents. No
Participant shall have any rights under this Agreement, the
Note or any of the Loan Documents and the Participant's rights
in respect of such participation shall be solely against
Lender or Co-Lender, as the case may be, as set forth in the
participation agreement executed by and between Lender or
Co-Lender, as the case may be, and such Participant. No
participation shall relieve Lender or Co-Lender, as the case
may be, from its obligations hereunder or under the Note or
the Loan Documents and Lender or Co-Lender, as the case may
be, shall remain solely responsible for the performance of its
obligations hereunder.
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(ix) Notwithstanding any other provision set forth in this
Agreement, the Lender or any Co-Lender may at any time create
a security interest in all or any portion of its rights under
this Agreement (including, without limitation, amounts owing
to it in favor of any Federal Reserve Bank in accordance with
Regulation A of the Board of Governors of the Federal Reserve
System), provided that no such security interest or the
exercise by the secured party of any of its rights thereunder
shall release Lender or Co-Lender from its funding obligations
hereunder.
(c) Borrower's Assignment. Borrower may not assign its rights
or obligations hereunder without the prior written consent of Agent and all of
the Co-Lenders.
(d) Payment of Agent's, and Co-Lender's Expenses, Indemnity,
etc. Borrower shall:
(i) whether or not the transactions hereby contemplated are
consummated, pay all reasonable out-of-pocket costs and
expenses (A) of Agent's reasonable counsel fees and expenses
relating to the negotiation, preparation, execution and
delivery of the Note, this Agreement, the Security
Instruments, and the other Loan Documents and the documents
and instruments referred to therein, the creation, perfection
or protection of Lender's and Co-Lender's liens on the
Property (including, without limitation, fees and expenses for
title insurance, property inspections, appraisals, if required
for syndication, surveys, lien searches, filing and recording
fees, and escrow fees and expenses), and any amendment, waiver
or consent relating to any of the Loan Documents including
releases, and the addition of new mortgaged properties (but
Agent and the Co-Lender's shall pay their own respective
counsel fees) and (B) of Agent and Co-Lenders in connection
with the preservation of rights under, any amendment, waiver
or consent relating to, and enforcement of, the Loan Documents
and the documents and instruments referred to therein or in
connection with any restructuring or rescheduling of the
Obligations (including, without limitation, the reasonable
fees and disbursements of counsel for Agent and the
Co-Lenders);
(ii) pay, and hold Agent and each Co-Lender harmless from and
against, any and all present and future stamp, excise and
other similar taxes with respect to the foregoing matters and
hold Agent and each Co-Lender harmless from and against any
and all liabilities with respect to or resulting from any
delay or omission (other than to the extent attributable to
Agent or such Co-Lender) to pay such taxes; and
(iii) indemnify Agent, (in its capacity as Lender and as
Agent), and each Co-Lender, its officers, directors,
employees, representatives and agents and any persons or
entities owned or Controlled by, owning or Controlling, or
under common Control or Affiliated with Agent, Agent, or each
Co-Lender (each an "Indemnitee") from, and hold each of them
harmless against, any and all losses, liabilities, claims,
damages, expenses, obligations, penalties, actions, judgments,
suits, costs or disbursements of any kind or nature whatsoever
(including, without limitation, the reasonable fees and
disbursements of counsel for such Indemnitee in connection
with any investigative, administrative or judicial proceeding
commenced or threatened, whether or not such
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Indemnitee shall be designated a party thereto) that may at
any time (including, without limitation, at any time following
the payment of the Obligations) be imposed on, asserted
against or incurred by any Indemnitee as a result of, or
arising in any manner out of, or in any way related to or by
reason of, (i) the execution, delivery or performance of any
Loan Document, (ii) the breach of any of Borrower's
representations and warranties or of any of Borrower's
Obligations, (iii) a default under Section 13.5 of the
Security Instrument, including, without limitation, attorneys'
fees and costs incurred in the investigation, defense, and
settlement of losses incurred in correcting any prohibited
transaction or in the sale of a prohibited loan, and in
obtaining any individual prohibited transaction exemption
under ERISA that may be required, and (iv) the exercise by
Agent and the Co-Lenders of their rights and remedies
(including, without limitation, foreclosure) under any Loan
Documents (but excluding, as to any Indemnitee, any such
losses, liabilities, claims, damages, expenses, obligations,
penalties, actions, judgments, suits, costs or disbursements
incurred solely by reason of the gross negligence or willful
misconduct of such Indemnitee as finally determined by a court
of competent jurisdiction) (collectively, "Indemnified
Liabilities"). Borrower further agrees that, without Agent's
or the Co-Lenders' prior written consent, it will not enter
into any settlement of a lawsuit, claim or other proceeding
arising or relating to any Indemnified Liability unless such
settlement includes an explicit and unconditional release from
the party bringing such lawsuit, claim or other proceeding of
each Indemnitee. Borrower's obligations under this Section
shall survive the termination of this Agreement and the
payment of the Obligations. Borrower shall have the right to
undertake, conduct and control through counsel of its own
choosing (which counsel shall be acceptable to the Indemnitee
acting reasonably), the conduct and settlement of the
Indemnified Liabilities, and the Indemnitee shall cooperate
with Borrower in connection therewith; provided that Borrower
shall permit the Indemnitee to participate in such conduct and
settlement through counsel chosen by the Indemnitee, but fees
and expenses of such counsel shall be borne by the Indemnitee.
Notwithstanding the foregoing, the Indemnitee 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 Indemnitee reasonably determines that (i)
Borrower's counsel are not defending any claim or proceeding
in a manner reasonably acceptable to the Indemnitee, or (ii)
the interests of Borrower and the Indemnitee have 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 such
Indemnitees. If clause (ii) of the immediately preceding
sentence is applicable, at the option of the Indemnitee, its
attorneys shall control the resolution of any claim or
proceeding. None of Borrower nor any Indemnitee shall be
liable for any settlement of any Indemnified Liability
effected without its prior written consent, such consent not
to be unreasonably withheld. No Indemnitee shall be liable for
any indirect or consequential damages in connection with its
activities related to the Loan, the Securitization or the
Syndication.
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(iv) Borrower shall pay to Lender the Administrative Fee, as
defined in and in accordance with the terms of the
Administrative Fee Letter dated as of the date hereof and any
amendment or replacement thereof.
(e) Limitation of Liability. No claim may be made by Borrower,
or any other Person against Agent, or any Co-Lenders or the Affiliates,
directors, officers, employees, attorneys or agent of any of such Persons for
any special, indirect, consequential or punitive damages in respect of any claim
for breach of contract or any other theory of liability arising out of or
related to the transactions contemplated by this Agreement or any act, omission
or event occurring in connection therewith; and Borrower hereby waives, releases
and agrees not to sue upon any claim for any such damages, whether or not
accrued and whether or not known or suspected to exist in its favor.
(f) No Joint Venture. Notwithstanding anything to the contrary
herein contained, neither Agent, nor any Co-Lender by entering into this
Agreement or by taking any action pursuant hereto, will not be deemed a partner
or joint venturer with Borrower.
9. INCORPORATION OF PROVISIONS. The Note, the Security Instruments and
the Loan Documents are subject to the conditions, stipulations, agreements and
covenants contained herein to the same extent and effect as if fully set forth
therein until this Agreement is terminated by the payment in full of the Debt.
10. FURTHER ASSURANCES. Borrower shall on demand of Lender do any act
or execute any additional documents reasonably required by Lender to confirm the
lien of the Security Instruments.
11. REPRESENTATIONS AND WARRANTIES. Borrower, represents and warrants
to Lender as follows:
(a) Borrower is duly qualified to do business in the States in
which the Properties are located unless such qualification is not
necessary pursuant to the applicable laws of the States.
(b) Borrower (and the undersigned representative, if any, of
Borrower) has the full power and authority to execute and deliver this
Agreement and the Loan Documents, and the same constitute the legal,
valid and binding obligations of Borrower.
12. CONSTRUCTION OF AGREEMENT. The titles and headings of the
paragraphs of this Agreement have been inserted for convenience of reference
only and are not intended to summarize or otherwise describe the subject matter
of such paragraphs and shall not be given any consideration in the construction
of this Agreement.
13. PARTIES BOUND, ETC. The provisions of this Agreement shall be
binding upon and inure to the benefit of Borrower, Lender, each Co-Lender and
their respective heirs, executors, legal representatives, successors and assigns
(except as otherwise prohibited by this Agreement).
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14. WAIVERS. Lender may at any time and from time to time waive any one
or more of the conditions contained herein, but any such waiver shall be deemed
to be made in pursuance hereof and not in modification thereof, and any such
waiver in any instance or under any particular circumstance shall not be
considered a waiver of such condition in any other instance or any other
circumstance.
15. GOVERNING LAW. (i) This Agreement shall be deemed to be a contract
entered into pursuant to the laws of the State of New York and shall in all
respects be governed, construed, applied and enforced in accordance with the
laws of the State of New York, provided however, that with respect to the
creation, perfection, priority and enforcement of the lien of the Security
Instruments, and the determination of deficiency judgments, the laws of the
State where the related Property is located shall apply.
(ii) Any legal action or proceeding with respect to this
Agreement or any other Loan Document and any action for enforcement of any
judgment in respect thereof may be brought in the courts of the State of New
York or of the United States of America for the Southern District of New York,
and, by execution and delivery of this Agreement, Borrower hereby accept, each
for itself and in respect of its property, generally and unconditionally, the
non-exclusive jurisdiction of the aforesaid courts and appellate courts from any
thereof. Borrower irrevocably consents to the service of process out of any of
the aforementioned courts in any such action or proceeding by the mailing of
copies thereof by registered or certified mail, postage prepaid, to Borrower at
its address set forth in Article 16 of the Security Instruments or its
registered agent. Borrower hereby irrevocably waives any objection which it may
now or hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Agreement or any other
Loan Document brought in the courts referred to above and hereby further
irrevocably waives and agrees not to plead or claim in any such court that any
such action or proceeding brought in any such court has been brought in an
inconvenient forum. Nothing herein shall affect the right of Lender, to serve
process in any other manner permitted by law or to commence legal proceedings or
otherwise proceed against Borrower in any other jurisdiction.
16. SEVERABILITY. If any term, covenant or provision of this Agreement
shall be held to be invalid, illegal or unenforceable in any respect, this
Agreement shall be construed without such term, covenant or provision.
17. NOTICES. All notices required to be given under the terms of this
Agreement shall be given in accordance with and to the addresses set forth in
Article 15 of the Security Instruments.
18. FEES AND EXPENSES. Borrower shall pay to Lender, upon demand, all
reasonable expenses incurred by Lender in connection with the collection of the
Debt, the enforcement of the Loan Documents, and in curing any defaults under
the Loan Documents (including, without limitation, reasonable attorneys' fees,
which shall include attorney's fees incurred in any trial, appellate or
bankruptcy proceeding), which, if any such expenses are past due, interest
thereon at a rate per annum equal to the rate of interest payable pursuant to
the Note, provided that such interest rate shall in no event exceed the maximum
interest rate which Borrower may by law pay, from the date of payment by Lender
to the date of payment to Lender, which sums and interest shall be secured by
the Security Instruments.
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19. MODIFICATION. This Agreement may not be modified, amended or
terminated, except by an agreement in writing executed by the parties hereto.
20. NO ORAL AGREEMENTS. ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY,
EXTEND CREDIT OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT, INCLUDING
PROMISES TO EXTEND OR RENEW SUCH DEBT ARE NOT ENFORCEABLE. TO PROTECT YOU
(BORROWER(S)) AND US (CREDITOR) FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY
AGREEMENTS WE REACH COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING, WHICH
IS THE COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS
WE MAY AGREE IN WRITING TO MODIFY IT.
21. DEFINITIONS. Capitalized terms not defined herein shall have the
meaning set forth in the Security Instruments.
22. RECOURSE. The obligations of Borrower hereunder shall be limited to
the same extent as provided for in Article 14 of the Note.
23. OUT PARCEL RELEASE. With respect to the Property known as Lancaster
in Los Angeles County, California, upon delivery to Lender of the items listed
below, Lender shall release from the lien of the Security Instruments the parcel
(the "Out Parcel") identified on Schedule 3 attached hereto: one or more
endorsements (at Borrower's sole cost and expense) to the Title Policy (as
defined in the Security Instruments) with respect to the Lancaster Property that
(i) down date the effective date of the such Title Policy to the date of the
release of the Out Parcel, (ii) insure that the Property remaining after the
release of the Out Parcel constitutes a legal subdivision and a separate tax
parcel and (c) payment of all reasonable costs and expenses of Lender (including
reasonable counsel fees and expenses) in connection with the release of the Out
Parcel.
[NO FURTHER TEXT ON THIS PAGE]
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IN WITNESS WHEREOF, Borrower and Lender have duly executed
this Agreement the day and year first above written.
CINEMA PROPERTIES, INC.,
a Delaware corporation
By: /s/ ROBERT COPPLE
-------------------------------------
Name: Robert Copple
Title: Vice President
LEHMAN BROTHERS BANK FSB, a federal
savings bank, individually and as agent
for the Co-Lenders
By: /s/ GARY T. TAYLOR
-------------------------------------
Name: Gary T. Taylor
Title: VP
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SCHEDULE 1
Security Instruments
1. Deed of Trust, Assignment of Leases and Rents, Security Agreement, and
Fixture Filing (California), dated December 15, 2000 between Lehman
Brothers Bank FSB (as Lender), and Cinema Properties, Inc. (as
Borrower);
2. Mortgage, Assignment of Leases and Rents, Security Agreement, and
Fixture Filing (Louisiana), dated December 15, 2000 between Lehman
Brothers Bank FSB (as Lender), and Cinema Properties, Inc. (as
Borrower); and
3. Deed of Trust and Security Agreement (Texas), dated December 15, 2000
between Lehman Brothers Bank FSB (as Lender), and Cinema Properties,
Inc. (as Borrower).
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SCHEDULE 2
THE PROPERTY
1. 00231 Plano, Tx 20
3800 Dallas, Pkwy., Plano, Tx 75093
2. 00251 Plano Legacy, Tx 24
7201 Central Expressway, Plano Tx 75025
3. 00280 Lancaster, Ca 22
2600 West Avenue I, Lancaster, Ca 93536
4. 00206 Grapevine, Tx 17
911 State Hwy. 114 West, Grapevine, Tx 76051
5. 00182 College Station, Tx 16
1401 E. Bypass, College Station, Tx 77845
6. 00252 Shreveport, La 17
8400 Millicent Way, Shreveport, La 71105