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EXHIBIT 10.13(c)
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "Agreement"), dated as of December 18,1997
is executed by CINEMARK INTERNATIONAL, INC., a Texas corporation (the
"Pledgor") for the benefit of BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION as agent (in such capacity herein called the "Administrative
Agent") for itself and each Bank (as hereinafter defined) (the Administrative
Agent and each Bank in such capacities are referred to herein collectively as
the "Secured Parties").
RECITALS
A. Concurrently herewith, Pledgor, the banks signatories thereto
(such banks, and other banks from time to time signatory thereto and banks from
time to time purchasing a participation in a signatory bank's interest therein,
collectively, the "Banks" and individually a "Bank") and the Administrative
Agent are entering into a Credit Agreement dated as of November 18, 1997 (as
amended, supplemented, restated or otherwise modified from time to time, the
"Credit Agreement"), subject to and upon the condition, among others, that the
Pledgor executes this Agreement in favor of the Secured Parties.
B. It is a condition precedent to the making of the Loans by the
Banks under the Credit Agreement that the Pledgor shall have granted the
security interest contemplated by this Agreement and the Secured Parties are
relying on the undertakings of the Pledgor contained herein.
C. Terms defined and the rules of construction in the Credit
Agreement have, unless the context otherwise requires, the same meanings in
this Agreement.
NOW, THEREFORE the parties hereto agree as follows:
1. Grant of Security Interest.
(a) As security for the payment or performance when due (whether
at stated maturity, by acceleration or otherwise) of the Obligations to any
Secured Party, now existing or hereafter arising, the Pledgor hereby pledges,
assigns and transfers to the Administrative Agent for purposes of security and
for the equal benefit of the Secured Parties, and hereby grants to the
Administrative Agent for the equal benefit of the Secured Parties, a lien on,
and security interest in, all of the Pledgor's right, title and interest in, to
and under the following, whether now or hereafter existing and whether now
owned or hereafter acquired (collectively, the "Collateral"):
(i) all shares of Cinemark Mexico (USA), Inc., a Texas
corporation (the "Issuer") owned by Pledgor as set forth on Schedule 1
(collectively, the "Pledged Shares");
(ii) all additional shares of stock of the Issuer from
time to time acquired by the Pledgor in any manner;
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(iii) the certificates representing the shares referred to
in paragraphs (i) and (ii) above; and
(iv) all dividends, cash, instruments and other property
or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the shares
referred to in paragraphs (i) and (ii) above (all of the foregoing
being the "Proceeds"); provided, however, that so long as no Event of
Default has occurred and is continuing, the Pledgor may receive free
and clear of any security interest under this Agreement any cash
dividends paid in respect of the Pledged Shares.
(b) All certificates or instruments representing or evidencing the
Collateral shall be delivered to and held by or on behalf of the Administrative
Agent pursuant hereto and shall be in suitable form for transfer by delivery,
or shall be accompanied by duly executed undated instruments of transfer or
assignment in blank, all in form and substance satisfactory to the
Administrative Agent. If an Event of Default has occurred and is continuing,
the Administrative Agent shall have the right, at any time in its discretion
and without notice to the Pledgor, to transfer to or to register in its name or
any of its nominees any or all of the Collateral, subject only to the revocable
rights specified in Section 6(a). In addition, if an Event of Default has
occurred and is continuing, the Administrative Agent shall have the right at
any time to exchange certificates or instruments representing or evidencing
Collateral for certificates or instruments of smaller or larger denominations.
2. Security for Obligations. This Agreement secures, in accordance
with the provisions hereof, the payment of all of the Obligations to any
Secured Party under any Loan Document now existing or hereafter arising. The
Collateral shall secure the Obligations owing to the Secured Parties equally
and ratably.
3. Representations and Warranties. The Pledgor represents and
warrants as follows:
(a) The chief place of business and chief executive office of the
Pledgor and the office where the Pledgor keeps its records concerning the
Collateral (hereinafter, "Records") is located at the address for notices for
the Pledgor as provided in Section 19(g).
(b) The Pledged Shares owned by the Pledgor have been duly
authorized and validly issued and are fully paid and nonassessable.
(c) The Pledged Shares constitute approximately 95% of the issued
and outstanding shares of stock or equity interests of the Issuer as of the
date hereof. There are no existing options, warrants, shareholder agreements,
calls or commitments of any character whatsoever relating to any of the Pledged
Shares owned by the Pledgor except as listed on Schedule 3.
(d) No effective financing statement or other instrument similar
in effect covering all or any part of the Collateral owned by the Pledgor is on
file in any recording office, except as may have been filed pursuant to this
Agreement.
(e) The Pledgor is lawfully possessed of ownership of the
Collateral owned by the Pledgor which exists on the date hereof, and has full
power and lawful authority to grant the Liens in and on the Collateral
hereunder.
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(f) This Agreement creates in favor of the Administrative Agent,
for the equal benefit of the Secured Parties, a valid and enforceable Lien on
the Pledged Shares owned by the Pledgor, subject to no Liens, securing the
payment and performance of the Obligations, and all filings and other actions
necessary to perfect such Lien with the priority described herein and in
Section 5.13(c) of the Credit Agreement have been duly made or taken.
(g) The Pledgor is duly organized and existing under the laws of
the state of its incorporation, and is properly licensed and in good standing
in, and where necessary to maintain its rights and privileges has complied with
the fictitious name statute of, every jurisdiction in which it is doing
business, except where the failure to be licensed or be in good standing or
comply with any such statute will not have a material adverse effect on the
ability of the Pledgor to perform its obligations hereunder or under any
instrument or agreement required hereunder.
(h) The execution, delivery and performance of this Agreement and
any instrument or agreement required hereunder are within the corporate power
of the Pledgor, have been duly authorized by, and are not in conflict with the
terms of any charter, by-laws, trust instrument or other organization papers,
as applicable, of, the Pledgor.
(i) No approval, consent, exemption or other action by, or notice
to or filing with, any governmental authority is necessary in connection with
the execution, delivery, performance or enforcement by the Pledgor of this
Agreement or any instrument or agreement required hereunder, except as may have
been obtained and certified copies of which have been delivered to
Administrative Agent.
(j) There is no law, rule or regulation, nor is there any
judgment, decree or order of any court or governmental authority binding on the
Pledgor, which would be contravened by the execution, delivery, performance or
enforcement by the Pledgor of this Agreement or any instrument or agreement
required hereunder.
(k) This Agreement is a legal, valid and binding agreement of the
Pledgor, enforceable against the Pledgor in accordance with its terms, and any
instrument or agreement required hereunder, when executed and delivered, will
be similarly legal, valid, binding and enforceable, except where enforceability
thereof may be limited by applicable law relating to bankruptcy, insolvency,
moratorium or other similar laws affecting creditors' rights generally or by
the application of general principles of equity.
(l) There is no action, suit or proceeding pending against, or to
the knowledge of the Pledgor, threatened against or affecting the Pledgor,
before any court or arbitrator or any governmental body, agency or official
which in any manner draws into question the validity or enforceability of this
Agreement.
(m) The execution, delivery and performance by the Pledgor of this
Agreement do not and would not be expected to conflict with or result in any
breach or contravention of, or the creation of any Lien under, any document
evidencing any Contractual Obligation to which the Pledgor is a party.
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4. Further Assurances, Supplements.
(a) The Pledgor agrees that from time to time, at the expense of
such Person, it will promptly execute and deliver all further instruments and
documents, and take all further action that may be necessary or desirable, or
that the Administrative Agent may reasonably request, in order to perfect the
Liens granted or purported to be granted hereby or to enable the Administrative
Agent to exercise and enforce its rights and remedies hereunder. Without
limiting the generality of the foregoing, the Pledgor will execute and deliver
to Administrative Agent such financing or continuation statements, or
amendments thereto, and such other instruments, endorsements or notices, as may
be necessary or desirable, or as the Administrative Agent may reasonably
request, in order to perfect and preserve the Liens granted or purported to be
granted hereby.
(b) The Pledgor hereby authorizes the Administrative Agent to file
one or more financing or continuation statements, and amendments thereto,
relative to all or any part of the Collateral without the signature of the
Pledgor where permitted by law.
(c) The Pledgor shall pay all filing, registration and recording
fees or refiling, re-registration and re-recording fees, and all expenses,
incident to its execution and acknowledgement of this Agreement, any agreement
supplemental hereto and any instruments of further assurance, and all federal,
state, county and municipal stamp taxes and other taxes, duties, imposts,
assessments and charges arising out of or in connection with its execution and
delivery of this Agreement, any agreement supplemental hereto and any
instruments of further assurance.
(d) The Pledgor shall warrant and defend title to the Collateral
against the claims and demands of all Persons (other than the Secured Parties
or any Person claiming by or through any Secured Party) whomsoever.
(e) The Pledgor shall, upon obtaining any additional shares of the
Issuer or any other securities constituting Collateral, promptly deliver to the
Administrative Agent a duly executed Pledge Agreement Supplement in
substantially the form of Schedule 2 hereto (a "Pledge Agreement Supplement")
identifying the additional shares which are being pledged. The Pledgor hereby
authorizes the Administrative Agent to attach each Pledge Agreement Supplement
to this Agreement and agrees that all shares listed on any Pledge Agreement
Supplement delivered to the Administrative Agent shall for all purposes
hereunder constitute Collateral. Upon any person pledging shares hereunder,
such person shall be deemed a Pledgor hereunder.
5. Covenants of Pledgor.
(a) The Pledgor shall pay, before any fine, penalty, interest or
cost attaches thereto, all taxes, assessments and other governmental or
non-governmental charges or levies now or hereafter assessed or levied against
its Pledged Shares or upon the Liens provided for herein as well as pay, or
cause to be paid, all claims for labor, materials or supplies which, if unpaid,
might by law become a Lien (other than a Permitted Lien) thereon, and will
retain copies of, and, upon request, permit the Administrative Agent or any
other Secured Party to examine, receipts showing payment of any of the
foregoing; provided, that Pledgor shall not be required to pay any
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such tax, assessment, charge or levy, the validity of which is being contested
in good faith by appropriate proceedings.
(b) The Pledgor shall give the Administrative Agent at least 30
days' prior written notice before it changes the location of its chief
executive office or the office where it keeps the Records and shall at the
expense of the Pledgor execute and deliver such instruments and documents as
required to maintain a prior perfected security interest and as reasonably
requested by the Administrative Agent. The Pledgor will hold and preserve all
Records and will, upon reasonable request by the Administrative Agent or any
Secured party at any time during normal business hours, permit the
Administrative Agent or any Secured Party to inspect and make abstracts from
such Records.
(c) The Pledgor shall not sell, assign (by operation of law or
otherwise) or otherwise dispose of any of the Collateral.
(d) The Pledgor shall not create or suffer to exist any Lien upon
or with respect to any of the Collateral except for the security interest
created by this Agreement or the Credit Agreement, and will defend the right,
title and interest of the Administrative Agent in and to the Pledgor's rights
to the Collateral against the claims and demands of all Persons whatsoever.
(e) The Pledgor will, upon becoming aware of such event, notify
the Administrative Agent promptly, in reasonable detail, (i) of any material
claim made or asserted against the Collateral by any Person; (ii) of any event
which could reasonably be expected to have a material adverse effect on the
value of the Collateral; (iii) of any event which could reasonably be expected
to have a material adverse effect on the ability of the Administrative Agent to
dispose of the Collateral or the rights and remedies of the Administrative
Agent; and (iv) of the occurrence of any other event which would have a
material adverse effect on the Collateral or on the security interest created
hereunder.
(f) The Pledgor agrees that it will use its best efforts to cause
the Issuer not to issue any stock or other securities in addition to or in
substitution for the Pledged Shares.
6. Voting Rights, Dividends, Etc.
(a) So long as no Event of Default shall have occurred and be
continuing (and, in the case of paragraph (i) below, so long as written notice
has not been given by the Administrative Agent to the Pledgor):
(i) the Pledgor shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Collateral or any
part thereof for any purpose not inconsistent with the terms of this
Agreement or any Loan Documents;
(ii) the Pledgor shall be entitled to receive and retain
free and clear of any security interest under this Agreement any and
all dividends paid in respect of the Collateral, other than any and
all:
(A) instruments and other property received,
receivable or otherwise distributed in exchange for, any
Collateral,
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(B) dividends and other distributions paid or
payable in cash in respect of any Collateral in connection
with a partial or total liquidation or dissolution or in
connection with a reduction of capital, capital surplus or
paid-in-surplus, and
(C) cash paid, payable or otherwise distributed
in redemption of, or in exchange for, any Collateral all of
which shall be, and all of which shall be forthwith delivered
to the Administrative Agent to hold as, Collateral and shall,
if received by the Pledgor, be received in trust for the
benefit of the Administrative Agent, be segregated from the
other property or funds of the Pledgor, and be forthwith
delivered to the Administrative Agent as Collateral in the
same form as so received (with any necessary endorsement).
(iii) The Administrative Agent shall execute and deliver
(or cause to be executed and delivered) to the Pledgor, all such
proxies and other instruments as the Pledgor may reasonably request
for the purpose of enabling the Pledgor to exercise the voting and
other rights which it is entitled to exercise pursuant to paragraph
(i) above and to receive the dividends which it is authorized to
receive and retain pursuant to paragraph (ii) above.
(b) If an Event of Default has occurred and is continuing:
(i) All rights of the Pledgor to exercise the voting and
other consensual rights which it would otherwise be entitled to
exercise pursuant to Section 6(a)(i) above shall cease upon written
notice thereof from the Administrative Agent, and all such rights
shall thereupon become vested in the Administrative Agent who shall
thereupon have the sole right to exercise such voting and other
consensual rights.
(ii) All rights of the Pledgor to receive the dividends
which it would otherwise be authorized to receive and retain pursuant
to Section 6(a)(ii) above shall cease, and all such rights shall
thereupon become vested in the Administrative Agent who shall
thereupon have the sole right to receive and hold as Collateral such
dividends.
(iii) All dividends which are received by the Pledgor
contrary to the provisions of Section 6(a)(ii) shall be received in
trust for the benefit of the Administrative Agent, shall be segregated
from other funds of the Pledgor and shall be forthwith paid over to
the Administrative Agent as Collateral in the same form as so received
(with any necessary endorsement).
(c) In order to permit the Administrative Agent to exercise the
voting and other rights which it may be entitled to exercise pursuant to
Section 6(a)(i) above, and to receive all dividends and distributions which it
may be entitled to receive under Section 6(a)(ii) above, the Pledgor shall, if
necessary, upon written notice from the Administrative Agent, from time to time
during the continuance of an Event of Default execute and deliver to the
Administrative Agent appropriate dividend payment orders and other instruments
as the Administrative Agent may reasonably request.
7. Administrative Agent Appointed Attorney-in-Fact. The Pledgor
hereby irrevocably appoints the Administrative Agent the Pledgor's
attorney-in-fact (which appointment
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as attorney-in-fact shall be coupled with an interest), with full authority to
act in the place and stead of the Pledgor and in the name of the Pledgor or
otherwise, from time to time if an Event of Default has occurred and is
continuing or to the extent contemplated by Section 8 hereof in the
Administrative Agent's discretion to take any action and to execute any
instrument which the Administrative Agent may deem necessary or advisable to
accomplish the purposes of this Agreement, including, without limitation, to
ask, demand, collect, sue for, recover, compound, receive and give acquittance
and receipts for moneys due and to become due under or in connection with the
Collateral, to receive, endorse and collect any drafts or other instruments,
documents and chattel paper in connection therewith, and to file any claims or
take any action or institute any proceedings which the Administrative Agent may
deem to be necessary or desirable for the collection thereof or to enforce
compliance with the terms and conditions of the Assigned Agreements or this
Agreement. Notwithstanding the foregoing, the Administrative Agent shall not be
obligated to exercise any right or duty as attorney-in-fact, and shall have no
duties to the Assignor in connection therewith.
8. Administrative Agent May Perform
(a) If the Pledgor fails to perform or comply with any of its
agreements contained herein, the Administrative Agent may, as provided for by
the terms of this Agreement, itself perform or comply, or otherwise cause
performance or compliance, with such Agreement. The reasonable expenses of the
Administrative Agent incurred in connection with such performance or compliance
shall be payable by the Pledgor to the Administrative Agent and shall
constitute Obligations secured hereby; provided, that the payment to the
Administrative Agent shall be made solely through the application of proceeds
in accordance with Section 9(a) hereof. The Administrative Agent agrees to
notify the Pledgor promptly after incurring any expenses pursuant to this
Section 8; provided, however, that the failure to provide such notice shall not
affect the Administrative Agent's right to reimbursement from the Pledgor.
(b) The Administrative Agent shall use reasonable care with
respect to the Collateral in its possession or under its control. Except as set
forth in the preceding sentence, the Administrative Agent shall not have any
duty as to any Collateral in its possession or control or in the possession or
control of any agent or nominee of it or as to any income thereon or as to the
preservation of rights against parties or any other rights pertaining thereto.
9. Rights and Remedies.
(a) If (i) an Event of Default shall have occurred and be
continuing and (ii) any of the Obligations shall have been declared to be, or
shall have become, due and payable, then, in addition to any other rights and
remedies provided for herein or which may otherwise be available, the
Administrative Agent may, without any further demand, advertisement or notice
(except as expressly provided for below in this Section 9(a)), exercise all the
rights and remedies of a secured party under the Uniform Commercial Code of the
State of New York (the "UCC") (whether or not the UCC applies to the affected
Collateral), and in addition: (i) may apply the moneys, if any, then held by it
as part of the Collateral, for the following purposes and in the following
order:
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(1) first, to the payment of (A) all costs and expenses
relating to the sale of the Collateral and collection of amounts owing
hereunder, including reasonable attorneys' fees and disbursements and
the just compensation of the Administrative Agent for services
rendered in connection therewith or in connection with any proceeding
to sell if a sale is not completed, and (B) all charges, expenses and
advances incurred or made by the Administrative Agent in order to
protect the Lien of this Agreement or the security afforded hereby,
together with interest at the rate specified in Section 2.10(c) of the
Credit Agreement;
(2) second, to the payment in full of all of the
Obligations owed to the Secured Parties hereunder or under any Loan
Document (to be paid to the Secured Parties in accordance with the
aggregate outstanding amounts of such Obligations owed to each Secured
Party); and
(3) third, the balance, if any, shall be paid to the
Pledgor or to such other Person as shall be lawfully entitled to
receive such surplus (as determined by a court of competent
jurisdiction, if such procedure is available under applicable law);
and (ii) if there shall be no such moneys or the moneys so applied shall be
insufficient to satisfy in full all Obligations, may sell the Collateral, or
any part thereof, as hereinafter provided in this Section 9(a) and otherwise to
the fullest extent permitted by law. The Collateral may be sold in one or more
sales, at public or private sale, conducted by any officer or agent of, or
auctioneer or attorney for, the Administrative Agent, at the Administrative
Agent's place of business or elsewhere, for cash, upon credit or for other
property, for immediate or future delivery, and at such price or prices and on
such terms as the Administrative Agent shall deem appropriate. The
Administrative Agent or any other Secured Party may be the purchaser of any or
all of the Collateral so sold at a public sale and, to the extent permitted by
law, at a private sale and thereafter hold the same, absolutely free from any
right or claim of whatsoever kind, and, the obligations of the Pledgor to such
purchaser may be applied as a credit against the purchase price. The
Administrative Agent, may, in its sole discretion (in the case of Collateral
consisting of securities) or if commercially reasonable (in the case of all
other Collateral), at any such sale restrict the prospective bidders or
purchasers as to their number, nature of business and investment intention.
Upon any public or private sale the Administrative Agent shall have the right
to deliver, assign and transfer to the purchaser thereof the Collateral so
sold. Each purchaser (including the Administrative Agent or any other Secured
Party) at any such sale shall hold the Collateral so sold, absolutely free from
any claim or right of whatsoever kind, including any equity or right of
redemption, of the Pledgor, and the pledgor hereby specifically waives, to the
full extent it may lawfully do so, all rights of redemption, stay or appraisal
which it has or may have under any rule of law or statute now existing or
hereafter adopted. The Administrative Agent shall give the Pledgor at least ten
days' notice (which the Pledgor agrees is reasonable notification within the
meaning of Section 9-504(3) of the UCC) of any such public or private sale. Any
public sale shall be held at such time or times within ordinary business hours
as the Administrative Agent shall fix in the notice of such sale. At any such
sale the Collateral may be sold in one lot as an entirety or in separate
parcels. The Administrative Agent shall not be obligated to make any sale
pursuant to any such notice. The Administrative Agent may, without notice or
publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for
such sale, and any such sale may be
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made at any time or place to which the same may be so adjourned without further
notice or publication. In case of any sale of all or any part of the Collateral
on credit or for future delivery, the Collateral so sold may be retained by the
Administrative Agent until the full selling price is paid by the purchaser
thereof, but neither the Administrative Agent nor any other Secured Party shall
incur any liability in case of the failure of such purchaser to take up and pay
for the Collateral so sold, and, in case of any such failure, such Collateral
may again be sold pursuant to the provisions hereof
(b) Instead of exercising the power of sale provided in Section
9(a) hereof, the Administrative Agent may proceed by a suit or suits at law or
in equity to foreclose the security interest under this Agreement and sell the
Collateral or any portion thereof under a judgment or decree of a court or
courts of competent jurisdiction.
(c) The Administrative Agent as attorney-in-fact pursuant to
Section 7 hereof may, in the name and stead of the Pledgor, make and execute
all conveyances, assignments and transfers of the Collateral sold pursuant to
Section 9(a) or Section 9(b) hereof, and the Pledgor hereby ratifies and
confirms all that the Administrative Agent, as said attorney-in-fact, shall do
by virtue hereof. Nevertheless, the Pledgor shall, if so requested by the
Administrative Agent, ratify and confirm any sale or sales by executing and
delivering to the Administrative Agent, or to such purchaser or purchasers, all
such instruments as may, in the reasonable judgment of the Administrative
Agent, be advisable for the purpose.
(d) The receipt by the Administrative Agent of the purchase money
paid at any sale made by it shall be a sufficient discharge therefor to any
purchaser of the Collateral, or any portion thereof, sold as aforesaid; and no
such purchaser (or the representatives or assigns of such purchaser), after
paying such purchase money and receiving such receipt, shall be bound to see to
the application of such purchase money or any part thereof or in any manner
whatsoever be answerable for any loss, misapplication or nonapplication of any
such purchase money, or any part thereof, or be bound to inquire as to the
authorization, necessity, expediency or regularity of any such sale.
(e) The Administrative Agent shall incur no liability as a result
of the sale of the Collateral, or any part thereof, at any private sale
conducted in a commercially reasonable manner. The Pledgor hereby waives, to
the full extent permitted by applicable law, any claims against the
Administrative Agent and/or any Secured Party arising by reason of the fact
that the price at which the Collateral, or any part thereof, may have been sold
at a private sale was less than the price which might have been obtained at a
public sale or was less than the aggregate amount of the Obligations, even if
the Administrative Agent accepts the first offer received which the
Administrative Agent in good faith deems to be commercially reasonable under
the circumstances and does not offer the Collateral to more than one offeree.
To the fullest extent permitted by law, the Pledgor shall have the burden of
proving that any such sale of the Collateral was conducted in a commercially
unreasonable manner.
(f) Each and every right and remedy of the Administrative Agent
shall, to the extent permitted by law, be cumulative and shall be in addition
to any other remedy given hereunder or under the Credit Agreement or now or
hereafter existing at law or in equity or by statute.
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(g) The Administrative Agent may participate in any
recapitalization, reclassification, reorganization, consolidation, redemption,
stock split, merger, or liquidation of the Issuer, and in connection therewith
deposit or surrender control of the Collateral, accept money or other property
in exchange for the Collateral, and take such action as deemed proper by the
Administrative Agent in connection therewith, and any other money or property
received in exchange for the collateral shall be applied to satisfy the
Obligations or held by the Administrative Agent thereafter as Collateral
pursuant to the provisions hereof.
10. Sales of Pledged Shares.
(a) If, at any time during the continuance of an Event of Default,
the Administrative Agent in its sole discretion determines that in connection
with any actual or contemplated exercise of its rights to sell the whole or any
part of the Collateral hereunder, it is necessary or advisable to effect a
public registration of all or part of the Collateral pursuant to the Securities
Act of 1933, as from time to time amended (or any similar statute then in
effect)(the "Securities Act"), the Pledgor shall:
(i) prepare and file with the Securities and Exchange
Commission (the "SEC") a registration statement with respect to the
Collateral and use its reasonable best efforts to cause such
registration statement to become and remain effective;
(ii) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective and to comply with the provisions of the
Securities Act with respect to the sale or other disposition of the
Collateral covered by such registration statement whenever the
Administrative Agent shall desire to sell or otherwise dispose of the
Collateral;
(iii) furnish to the Administrative Agent such numbers of
copies of a prospectus and a preliminary prospectus, in conformity
with the requirements of the Securities Act, and such other documents
as the Administrative Agent may request in order to facilitate the
public sale or other disposition of the Collateral by the
Administrative Agent;
(iv) use its reasonable best efforts to register or
qualify the Collateral covered by such registration statement under
such other securities or blue sky laws of such jurisdictions within
the United States of America as the Administrative Agent shall
request, and do such other reasonable acts and things as may be
required of it to enable the Administrative Agent to consummate the
public sale or other disposition in such jurisdictions of the
Collateral by the Administrative Agent;
(v) otherwise use its reasonable best efforts to comply
with all applicable rules and regulations of the SEC, and make
available to its security holders, as soon as reasonably practicable
an earnings statement which shall satisfy the provisions of the
Securities Act; and
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(vi) do or cause to be done all such other acts as may be
necessary to make such sale of the Collateral or any part thereof
valid and binding and in compliance with applicable law.
(b) The Pledgor recognizes that, by reason of the aforementioned
requirements and certain prohibitions contained in the Securities Act and
applicable state securities laws, the Administrative Agent may, at its option,
elect not to require the Pledgor to register all or any part of the Collateral
and may therefore be compelled, with respect to any sale of all or any part of
the Collateral, to limit purchasers to those who will agree, among other
things, to acquire such securities for their own account, for investment, and
not with a view to the distribution or resale thereof. The Pledgor acknowledges
and agrees that any such sale may result in prices and other terms less
favorable to the seller than if such sale were a public sale without such
restrictions and, notwithstanding such circumstances, agrees that any such sale
conducted in good faith shall be deemed to have been made in a commercially
reasonable manner. The Administrative Agent shall be under no obligation to
delay the sale of any of the Pledged Shares for the period of time necessary to
permit the Pledgor to register such securities for public sale under the
Securities Act, or under applicable state securities laws, even if the Pledgor
would agree to do so.
(c) If the Administrative Agent determines to exercise its right
to sell any or all of the Collateral, upon written request, the Pledgor shall
and shall cause, each of its Subsidiaries to, from time to time, furnish to the
Administrative Agent all such information as the Administrative Agent may
request in order to determine the number of shares and other instruments
included in the Collateral which may be sold by the Administrative Agent as
exempt transactions under the Securities Act and rules of the SEC thereunder,
as the same are from time to time in effect.
11. Continuing Assignment and Security Interest; Transfer of
Notes. This Agreement shall create a continuing assignment of and security
interest in the Collateral and shall (a) remain in full force and effect until
payment in full of the Obligations and all other amounts owing to each Secured
Party under any Loan Documents and the termination or expiration of the
Commitments, (b) be binding upon the Pledgor, its successors and assigns and
(c) inure, together with the rights and remedies of the Administrative Agent
hereunder, to the benefit of the Administrative Agent and the Secured Parties
and their respective successors, transferees and assigns. Without limiting the
generality of the foregoing, any Bank may assign or otherwise transfer its
rights and obligations under any Loan Document to any other Person or entity,
and such other Person or entity shall thereupon become vested with all the
benefits in respect thereof granted to such Bank herein or otherwise, all as
provided in, and to the extent set forth in, the Loan Documents. The Pledgor
may not assign or transfer any of its rights or obligations under this
Agreement without the prior written consent of the Administrative Agent. Upon
the payment in full of the Obligations and termination of the commitments
(exclusive of future, contingent or unliquidated amounts arising under
indemnity agreements), the security interest granted hereby shall terminate and
all rights to the Collateral shall revert to the Pledgor. Upon any such
termination, the Administrative Agent will, at the Pledgor's expense, execute
and deliver to the Pledgor such documents as the Pledgor shall reasonably
request to evidence such termination.
12. No Notices, etc. No Secured Party shall be under any duty or
obligation whatsoever (a) to make or give any presentments, demands for
performances, notices of
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PLEDGE AGREEMENT
12
nonperformance, protests, notices of protest or notices of dishonor in
connection with any Obligations or evidences of Obligations held by Secured
Parties as Collateral, or in connection with any Obligation or evidences of
Obligations which constitute in whole or in part the Obligations secured
hereunder, or (b) to give the Pledgor notice of, or to exercise any
subscription rights or privileges, any rights or privileges to exchange,
convert or redeem or any other rights or privileges relating to or affecting
any Collateral held by Secured Parties.
13. Delivery of Collateral. The Secured Parties may at any time
cause the Administrative Agent to deliver the Collateral or any part thereof to
the Pledgor and the receipt of the Pledgor shall be a complete and full
acquittance for the Collateral so delivered, and Secured Parties shall
thereafter be discharged from any liability or responsibility therefor.
14. Attorneys Fees.
(a) The Pledgor agrees to pay to each Secured Party the amount of
any and all expenses, including expenses incurred by the Administrative Agent,
and the reasonable fees and expenses of its counsel (including, without
limitation, the allocated cost of in-house counsel) and of any experts, which
such Secured Party may incur in connection with (i) the custody or preservation
of, or the sale of, collection from, or other realization upon, any of the
Collateral; (ii) the exercise or enforcement of any of the rights of any
Secured Party hereunder; or (iii) the failure by the Pledgor to perform or
observe any of the provisions hereof, provided that the payment of such sums
shall be made to the Secured Parties solely through the application of proceeds
in accordance with Section 9(a) hereof.
(b) The Pledgor agrees to indemnify and hold each Secured Party
harmless from and against any taxes, liabilities, claims and damages, including
attorney's fees and disbursements (including, without limitation, the allocated
cost of in-house counsel), and other expenses incurred or arising by reason of
the taking or the failure to take action by any Secured Party in respect of any
transaction effected under this Agreement or in connection with the Lien
provided for herein, including, without limitation, any taxes payable with
respect to the Collateral or in connection with any transaction contemplated by
this Agreement and any and all costs, losses, liabilities, claims, damages or
expenses incurred by any Secured Party arising out of any investigation,
litigation or other proceeding related to this Agreement or any transaction
contemplated hereby (all the foregoing, collectively, the "Indemnified
Liabilities"), except for the gross negligence and willful misconduct of such
Secured Party; provided, that such indemnification shall be made to the Secured
Parties solely through the application of proceeds in accordance with Section
9(a) hereof. The Pledgor shall have the right to undertake, conduct and control
through counsel of its own choosing (which counsel shall be acceptable to the
Secured Parties acting reasonably) and at the sole expense of the Pledgor, the
conduct and settlement of any Indemnified Liabilities, and the Secured Parties
shall cooperate with the Pledgor in connection therewith; provided that the
Pledgor shall permit the Secured Parties to participate in such conduct and
settlement through counsel chosen by the Secured Parties, but the fees and
expenses of such counsel shall be borne by the Secured Parties. Notwithstanding
the foregoing, the Secured Parties shall have the right to employ their own
counsel, and the reasonable fees and expenses of such counsel shall be at the
Pledgor's cost and expense if the interests of the Pledgor and the Secured
Parties become adverse in any such claim or course of action; provide, however,
the Pledgor, in such event, shall only be liable for the reasonable
- 12 -
PLEDGE AGREEMENT
13
legal expenses of one counsel for all of such Secured Parties. The Pledgor
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 14(b) shall be paid within 30 days after
demand.
(c) The obligations of the Pledgor under this Section 14 shall
survive the termination of this Agreement.
15. Miscellaneous.
(a) Headings used in this Agreement are for convenience of
reference only and do not constitute part of this Agreement for any purpose.
(b) No failure on the part of the Administrative Agent or any of
its agents to exercise, and no course of dealing with respect to, and no delay
in exercising, any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise by the Administrative Agent
or any of its agents of any right, power or remedy hereunder preclude any other
or further exercise thereof or the exercise of any other right, power or
remedy. The remedies herein are cumulative and are not exclusive of any
remedies provided by law.
(c) If any provision hereof is invalid and unenforceable in any
jurisdiction, then, to the fullest extent permitted by law, the other
provisions hereof shall remain in full force and effect in such jurisdiction
and shall be liberally construed in favor of the Administrative Agent and the
Banks in order to carry out the intentions of the parties hereto as nearly as
may be possible and the invalidity or unenforceability of any provision hereof
in any jurisdiction shall not affect the validity or enforceability of such
provision in any other jurisdiction.
(d) The Administrative Agent may employ agents and
attorneys-in-fact in connection herewith and shall not be responsible for the
negligence or misconduct of any such agents or attorneys-in-fact selected by it
in good faith.
(e) The agreements of the parties hereto are solely for the benefit of
the Secured Parties, and no Person (other than the parties hereto and the
Secured Parties) shall have any rights hereunder.
(f) No amendment or waiver of any provision of this Agreement nor
consent to any departure by the Pledgor herefrom shall in any event be
effective unless the same shall be in writing and signed by the Administrative
Agent, the Pledgor, and then such waiver or consent shall be effective only in
the specific instance and for the specified purpose for which given.
(g) All notices, requests, demands, waivers or other
communications to or upon the respective parties hereto shall be in writing
delivered in person, by mail postage prepaid, by nationally recognized
overnight courier or by telecopy and shall be deemed to have been duly given or
made when received, if mailed or delivered by courier, or when personally
delivered or transmitted by telecopy, addressed to the party to which such
notice, request, demand, waiver or other communication is required or permitted
to be given or made hereunder at, if to the Pledgor, the address for the
Borrower set forth in Schedule 10.2 to the Credit Agreement and if to the
Administrative Agent, the address set forth for the Administrative Agent in the
Credit
- 13 -
PLEDGE AGREEMENT
14
Agreement, or such other address of which such party shall have notified in
writing the party giving such notice.
16. Governing Law, Terms. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, AND EXCEPT TO
THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER,
OR REMEDIES HEREUNDER, ARE GOVERNED BY THE LAW OF ANY JURISDICTION OTHER THAN
THE STATE OF NEW YORK. TERMS USED IN ARTICLE 9 OF THE UCC ARE USED HEREIN AS
THEREIN DEFINED.
17. Waiver of Jury Trial. EACH PARTY HERETO WAIVES THEIR
RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY
ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR PARTIES, WHETHER WITH RESPECT TO
CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. EACH PARTY HERETO AGREES THAT ANY
SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY.
WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE
RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY
ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO
CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY PROVISION
HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
- 14 -
PLEDGE AGREEMENT
15
IN WITNESS WHEREOF, the parties hereto, by their officers duly
authorized, have caused this Agreement to be duly executed and delivered as of
the day and year first above written.
CINEMARK INTERNATIONAL, INC.
By: /s/ JEFF STEDMAN
----------------------------
Name: Jeff Stedman
--------------------------
Title: Vice President
-------------------------
Agreed to:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Administrative Agent
By: /s/ JANICE HAMMOND
----------------------------
Janice Hammond
Vice President
- 15 -
PLEDGE AGREEMENT
16
SCHEDULE 1
TO
PLEDGE AGREEMENT
Attached to and forming a part of that certain Pledge Agreement dated
as of December 18, 1997 made by Cinemark International, Inc. to Bank of America
National Trust and Savings Association, as Administrative Agent
Stock of Cinemark Mexico (USA), Inc.
Class Stock Percentage Number
of Certificate of Par of
Stock No(s). Ownership Value Shares
- ----- ----------- ---------- ----- ------
- 1 -
PLEDGE AGREEMENT
17
SCHEDULE 2
TO
PLEDGE AGREEMENT
PLEDGE AGREEMENT SUPPLEMENT
This Pledge Agreement Supplement, dated as of _____________________,
is delivered pursuant to Section 4 of the Pledge Agreement referred to below.
The undersigned hereby agrees that this Pledge Agreement Supplement may be
attached to the Pledge Agreement, dated as of December 18, 1997 (the "Pledge
Agreement", the terms defined therein and not otherwise defined herein being
used as therein defined), made by Cinemark International, Inc. to Bank of
America National Trust and Savings Association as Administrative Agent for its
benefit and the benefit of the Secured Parties and that the shares listed on
this Pledge Agreement Supplement shall be and become part of the Collateral
referred to in the Pledge Agreement and shall secure all Obligations.
The undersigned agrees that the securities listed below shall for all
purposes constitute Collateral and shall be subject to the security interest
created by the Pledge Agreement.
The undersigned hereby certifies that the representations and
warranties set forth in Section 3 of the Pledge Agreement are true and correct
as to the Collateral listed herein on and as of the date hereof.
CINEMARK INTERNATIONAL, INC.
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
Class Stock Percentage Number
of Certificate of Par of
Stock No(s). Ownership Value Shares
- ----- ----------- ---------- ----- ------
- 1 -
PLEDGE AGREEMENT
18
SCHEDULE 3
TO
PLEDGE AGREEMENT
Attached to and forming a part of that certain Pledge Agreement dated
as of December 18, 1997 made by Cinemark International, Inc. to Bank of America
National Trust and Savings Association, as Administrative Agent
Existing options, warrants, shareholder
agreements, calls or commitments
NONE
- 2 -
PLEDGE AGREEMENT