Exhibit 10.43
AMENDED AND RESTATED
PLEDGE AGREEMENT
THE PLEDGE AGREEMENT, dated as of July 28, 2000 (as amended, modified and
supplemented from time to time, this "Agreement"), is entered into by and
between SUTTON HILL ASSOCIATES, a California general partnership (the
"Pledgor"), and CITADEL HOLDING CORPORATION, a Nevada corporation now known as
Reading International, Inc. (together with its permitted successors and assigns,
the "Pledgee") is hereby amended and restated as of January 29, 2002.
WITNESSETH:
WHEREAS, the Pledgor is (a) the sole member of Sutton Hill Capital,
L.L.C., a limited liability company formed under the laws of the State of New
York ("Sutton Hill Capital"), and (b) the legal and beneficial owner of the
Membership Interest (as hereinafter defined);
WHEREAS, Sutton Hill Capital and the Pledgee have entered into a certain
Citadel Standby Credit Facility, dated as of July28, 2000 as amended and
restated as of January 29, 2002 (as the same may be amended, restated, modified,
or supplemented from time to time, the "Credit Agreement"), pursuant to which,
at the election of Sutton Hill Capital and upon the satisfaction of certain
conditions precedent provided for therein, the Pledgee has agreed to make to
Sutton Hill Capital certain loans in an aggregate principal amount up to
eighteen million Dollars ($18,000,000) (hereinafter referred to as the "Loans");
WHEREAS, as an inducement to the Pledgee to make the Loans, if any, to
Sutton Hill Capital pursuant to the terms of the Credit Agreement, the Pledgor
has agreed, in accordance with the terms of Section 4.1(f) of the Credit
Agreement, to execute and deliver this Agreement pursuant to which the Pledgor
will pledge the Collateral (as hereinafter defined) in favor of the Pledgee to
secure the performance and repayment of Sutton Hill Capital's Obligations (as
hereinafter defined), to the extent and in accordance with the terms hereof;
WHEREAS, Sutton Hill Capital has also acquired certain interests in
various theatre properties in New York City, including the option (the "Sutton
Fee Option") to acquire the fee interests in and to one of such properties (the
"Sutton Fee");
WHEREAS, Citadel Cinemas, Inc., a Nevada corporation ("Citadel Cinemas"),
has subleased from Sutton Hill Capital certain of the theatre properties,
including the improvements and equipment located therein or thereon
(collectively, the "Leased Interests"), pursuant to provisions of a certain
Lease Agreement, dated as of July 28, 2000, as amended and restated as of
January 29, 2002 (the "Lease Agreement"), between Sutton Hill Capital, as
lessor, and Citadel Cinemas, as lessee;
WHEREAS, included in the Lease Agreement is an option in favor of Citadel
Cinemas (the "Lease Option") to acquire from Sutton Hill Capital the Leased
Interests;
WHEREAS, pursuant to an agreement, dated as of July 28, 2000 as amended
and restated as of January 29, 2002 (the "Fee Option Agreement"), between
Citadel Realty, Inc. ("Fee Sub") and Sutton Hill Capital, Sutton Hill Capital
has granted to Fee Sub the right (the "Fee Option Right"), subject to the
exercise by Citadel Cinemas of the Lease Option and payment by Citadel Cinemas
of the exercise price under the Lease Option, to require Sutton Hill Capital to
exercise the Sutton Fee Option and direct the delivery of the Sutton Fee to or
as directed by Fee Sub, upon payment by Fee Sub or its designee of the exercise
price under the Sutton Fee Option;
WHEREAS, the Collateral will be subject to the prior pledge thereof to
Nationwide, as described in a certain Intercreditor Agreement among Nationwide,
Sutton Hill Capital and the Pledgee;
WHEREAS, it is the intention of the Pledgor in executing and delivering
this Agreement to assure to the Pledgee that, if it forecloses on the pledge of
the Membership Interest, the Membership Interest will not be subject to any
claims thereto or rights therein arising from any action of Sutton Hill Capital
or its Affiliates, except for Pledgor Permitted Liens (as hereinafter defined);
and
WHEREAS, it is the Pledgee's expectation that, if it were to foreclose on
the pledge of the Membership Interest, Sutton Hill Capital's interest in the
Sutton Fee Option and in the Leased Interests would be subject only to Pledgor
Permitted Liens;
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. Definitions. Unless otherwise defined herein, terms that are
defined in the Credit Agreement and used herein are so used as so defined, and
the following terms shall have the following meanings:
"Accounts" shall have the meaning assigned to that term in Article 9 of
the Code.
"Certificate of Title" shall mean a title search or report provided by a
title insurance company or agency licensed to do business in the state where the
Leased Interests are located.
"Chattel Paper" shall have the meaning assigned to that term in Article 9
of the Code.
"Citadel Cinemas" shall mean Citadel Cinemas, Inc., a Nevada corporation
and its successors and assigns (including successors or assigns as tenant under
the Lease Agreement).
"Code" shall mean the Uniform Commercial Code from time to time in effect
in the State of New York.
"Collateral" shall have the meaning assigned to that term in Section 2 of
this Agreement.
"Cure" (including grammatical alternatives thereof) shall mean (i) the
removal of the Lien or Title Impairment in question, either of record or by
arrangement for the title company insuring the interest of the transferee to
"omit" the Lien or Title Impairment in question, or (ii) the causing of the
title company involved to insure against collection or to insure against loss or
forfeiture of title with respect to the Lien or Title Impairment in question,
provided, that, in the case of a Cure described in clause (ii) hereof, the title
company must agree to "omit" such Lien or Title Impairment in question in
connection with any mortgagee title insurance policy with respect to any third
party financing.
"Designated Payment" shall mean the amounts (if any) required to be paid
to satisfy amounts then payable by the Pledgor to Nationwide pursuant to the
Nationwide Agreement.
"Event of Default" shall mean the occurrence of any of the following
events: (1) an Event of Default (as defined in the Credit Agreement), or (2) a
default on the part of the Pledgor in the due performance or observance of any
covenant or obligation of the Pledgor contained herein, and, if such default is
capable of cure, the continuance of such default for thirty (30) days after
written notice from the Pledgee to the Pledgor; provided, however, that if such
default is of a nature that it is capable of being cured but not within such
thirty (30) day period and the Pledgor shall have proceeded diligently and in
good faith to complete curing such default, such thirty (30) day period shall be
extended to one hundred eighty (180) days.
"Fee Option Agreement" shall have the meaning assigned to that term in the
recitals hereto.
"Fee Option Right" shall have the meaning assigned to that term in the
recitals hereto.
"General Intangibles" shall have the meaning assigned to that term in
Section 9-106 of the Code and shall include, without limitation, the Membership
Interest and all rights of the Pledgor to receive, directly or indirectly,
moneys or any other rights or benefits therefrom.
"Insolvency or Liquidation Proceeding" of any person shall mean:
(a) The entry of a decree or order for relief in respect of such
person by a court having jurisdiction in the premises, or the appointment
of a receiver, liquidator, assignee, custodian, trustee, sequestrator (or
other similar official) of such person or of any substantial part of its
property, or ordering the winding up or liquidation of its affairs, in an
involuntary case under the Federal bankruptcy laws, as now or hereafter
constituted, or any other applicable Federal or state bankruptcy,
insolvency or other similar law; or the commencement against such person
of an involuntary case under the Federal bankruptcy
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laws, as now or hereafter constituted, or any other applicable Federal or
state bankruptcy, insolvency or other similar law; or
(b) The commencement by such person of a voluntary case under the
Federal bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal or state bankruptcy, insolvency or other similar law,
or the consent by it to the entry of an order for relief in an involuntary
case under such law or the consent by it to the appointment of or taking
possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or other similar official) of such person or of any
substantial part of its property, or the making by it of a general
assignment for the benefit of creditors, or the taking of any action in
furtherance of any of the foregoing;
provided, however, that, if any of the events described in clauses (i) and (ii)
of this definition shall arise as a result of a Tenant Event, then such an event
shall not constitute an Insolvency or Liquidation Proceeding.
"Instruments" shall have the meaning assigned to that term in Article 9 of
the Code.
"Intercreditor Agreement" shall mean the Intercreditor Agreement, dated as
of July 28, 2000 as amended and restated as of January 29, 2002, entered into by
and among the Pledgor, the Pledgee, and Nationwide Theatres Corp., a California
corporation and its successors and assigns (hereinafter referred to as
"Nationwide") as amended and restated as of January 29, 2002.
"Lease Agreement" shall mean the Lease Agreement between Sutton Hill
Capital, as lessor, and Citadel Cinemas, as lessee, dated as of July 28, 2000,
as amended and restated as of January 29, 2002 as amended, modified and
supplemented from time to time.
"Lease Option" shall have the meaning assigned to that term in the
recitals hereto.
"Leased Interests" shall have the meaning assigned to that term in the
recitals hereto.
"Legal Requirements" shall mean all laws, judgments, decrees, ordinances
and regulations and any other governmental rules, orders and determinations and
all requirements having the force of law, now or hereinafter enacted, made or
issued, whether or not presently contemplated (including without limitation the
Americans with Disabilities Act, 42 U.S.C. " 12181 et seq., and local and state
laws of similar impact or effect and rules, regulations and (to the extent
Citadel Cinemas receives notice and a copy thereof pursuant to the Lease
Agreement) orders issued under any thereof) and all existing recorded
agreements, covenants, conditions and restrictions (or any such of which Citadel
Cinemas has notice), applicable to any Leased Interest and/or the construction,
ownership, operation or use thereof, including, without limitation, compliance
with all requirements of labor laws and all federal, state, local and foreign
laws, statutes, codes, ordinances, rules, regulations, directives, binding
policies, permits or orders relating to or addressing the environment or human
health, including, but not limited to, any law, statute, code, ordinance, rule,
regulation, directive, binding
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policy, permit, authorization or order, compliance with which is required at any
time from the date hereof through the Lease Termination Date as such term is
defined in the Lease Agreement (or thereafter as therein set forth), if any,
whether or not such compliance shall require structural, unforeseen or
extraordinary changes to any Leased Interest or the operation, occupancy or use
thereof
"Lien" shall mean any security interest, mortgage, pledge, hypothecation,
assignment as collateral, encumbrance, lien (statutory or other), or other
security agreement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, and the filing of any financing statement under the Code or
comparable law of any jurisdiction in respect of any of the foregoing).
"Limited Liability Company Agreement" shall mean the Limited Liability
Company Agreement of Sutton Hill Capital, dated as of April 8, 1999, as the same
may be amended, restated, modified or supplemented from time to time.
"Membership Interest" shall have the meaning assigned to that term in
Section 2 of this Agreement.
"Nationwide Accrued Interest" shall mean any interest that has accrued
with respect to the Nationwide Indebtedness so long as such interest has not
arisen as a result of a Tenant Event.
"Nationwide Pledge Agreement" shall mean the agreement, dated as of July
28, 2000, entered into between the Pledgor and Nationwide as amended and
restated as of January 29, 2002, pursuant to which the Pledgor has granted a
first security interest in the Collateral to Nationwide.
"Obligations" shall mean any and all indebtedness, debts, obligations, and
liabilities of Sutton Hill Capital to the Pledgee from time to time outstanding
under the Related Documents to which Sutton Hill Capital is a party, whether
fixed or contingent, due or not due, liquidated or unliquidated, determined or
undetermined, and whether for principal, interest, fees, expenses or otherwise,
including principal of and interest on any other amounts payable in respect of
the Loans, if any, and including, further, any rights of subrogation or
contribution arising under the Related Documents.
"Operational Agreements" shall have the meaning assigned to that term in
the Credit Agreement.
"Pledgor Permitted Liens" shall mean (a) with respect to the Membership
Interest, the Lien created pursuant to the Nationwide Agreement or any Lien
resulting from or attributable to a Tenant Event and (b) with respect to the
Leased Interests and the Sutton Fee Option, the following Liens and other
matters affecting the title thereto: (i) Liens securing the payment of taxes,
assessments and other governmental charges or levies which are not yet
delinquent to the extent not the obligations of Citadel Cinemas pursuant to the
Lease Agreement; (ii) Legal Requirements, zoning and planning restrictions,
subdivision and platting restrictions, easements, rights-of-way, licenses,
reservations,
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covenants, conditions, waivers, or restrictions on the use of any material
component of real estate comprising the Leased Interests, which exist on the
date hereof and either are set forth in the title insurance policy delivered to
Citadel Cinemas in connection with the Lease Agreement or are not disclosed
therein; (iii) encroachments or irregularities of title none of which materially
impairs the current use or value of the affected Leased Interests; (iv) the
Liens created pursuant to the Nationwide Agreement provided that such Liens are
paid with the applicable Designated Payment; (v) leases and licenses in effect
with respect to any Leased Interest which are permitted by the Lease Agreement;
(vi) mechanics' and materialmen's liens or Liens not disclosed in the title
insurance policy and existing on the date hereof; (vii) exceptions to the title
of any material component of real estate comprising the Leased Interests, of the
Sutton Fee or of the Sutton Fee Option, as the case may be, as set forth in the
title insurance policy delivered to Citadel Cinemas in connection with the Lease
Agreement; (viii) existing Liens listed on Exhibit A attached hereto; (ix) any
Lien which is or results from a Tenant Event or is approved by Citadel Cinemas
for purposes of the Lease Agreement; (x) Liens, including Legal Requirements,
zoning and planning restrictions, subdivision and platting restrictions and any
of the matters affecting title, which result from acts of any agency,
department, court or other administrative, legislative or regulatory authority
of any Federal, state, local or foreign governmental body from and after the
date hereof not caused by or resulting from a Landlord Act (as such term is
defined in the Lease Agreement); and (xi) such other or additional matters as
may be approved in writing by Citadel Cinemas in its sole discretion.
"Proceeds" shall mean all "proceeds" as such term is defined in Section
9-306(1) of the Code on the date hereof and, in any event, shall include,
without limitation, all dividends or other income from the Membership Interest
and any and all collections on the foregoing or distributions with respect to
the foregoing.
"Sutton Fee" shall have the meaning assigned to that term in the recitals
hereto.
"Sutton Fee Option" shall have the meaning assigned to that term in the
recitals hereto.
"Taxes" shall mean any present or future taxes, levies, imposts, duties,
fees, assessments, deductions, withholdings or other charges of whatever nature,
including income, receipts, excise, property, sales, use, transfer, license,
payroll, withholding, social security and franchise taxes now or hereafter
imposed or levied by the United States, or any state, local or foreign
government or by any department, agency or other political subdivision or taxing
authority thereof or therein and all interest, penalties, additions to tax and
similar liabilities with respect thereto.
"Title Impairment" shall mean a claim, charge or other matter affecting
title to an Asset or interest therein, other than a Lien, which materially
impairs the intended use or value of the Asset (or interest therein) in question
excluding, however, the matters affecting title as of the date hereof, the Site
Leases and the terms and conditions thereof and matters which constitute Tenant
Events.
SECTION 2. Grant of Security. As security for the prompt and complete
payment when due of the Obligations, the Pledgor hereby assigns, pledges,
transfers and grants to the Pledgee a
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continuing security interest (which shall be subject and subordinate to the
prior security interest granted to Nationwide pursuant to the Nationwide Pledge
Agreement as and to the extent provided in the Intercreditor Agreement) in, and
a lien upon, all of the Pledgor's right, title and interest in the following
property now owned or at any time hereafter acquired by the Pledgor, or in which
the Pledgor may acquire any right, title or interest, as collateral security for
the prompt and complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of the Obligations (collectively, the
"Collateral"):
a) any and all of its membership interest in Sutton Hill Capital,
including, without limitation, all its rights, title and interest to
participate in the operation or management of Sutton Hill Capital and all
its rights to properties, assets and distributions under the Limited
Liability Company Agreement, and all certificates evidencing any of such
membership interests (collectively, the "Membership Interest");
b) all Accounts arising out of the Limited Liability Company
Agreement in respect of the Membership Interest;
c) all General Intangibles arising out of or constituted by the
Limited Liability Company Agreement in respect of the Membership Interest;
and
d) to the extent not otherwise included, all Proceeds of any and all
of the foregoing.
This Agreement shall create a continuing security interest in the
Collateral which shall be subject and subordinate to the prior security interest
granted to Nationwide as provided in the Intercreditor Agreement and shall
remain in effect until all the Obligations, now existing or hereafter arising,
shall have been paid in full, the Commitments shall have been terminated and the
Credit Agreement and the Related Documents shall no longer be in effect.
SECTION 3. Representations and Warranties of Pledgor. The Pledgor hereby
represents and warrants to the Pledgee that: (i) the Pledgor is the sole member
of Sutton Hill Capital and no other Person owns or holds any other ownership
rights in the Membership Interest; (ii) the execution, delivery, and performance
of this Agreement are not in violation of any indenture, agreement, or
undertaking to which the Pledgor is a party or by which the Pledgor is bound;
(iii) the execution, delivery and performance of this Agreement will not result
in the creation or imposition of any lien or charge on, security interest in or
other encumbrance on any of the assets of the Pledgor except as contemplated by
this Agreement; (iv) the Pledgor's chief executive office and the place where
the Pledgor keeps its business records is 120 North Robertson Boulevard, Los
Angeles, California 90048; and (v) this Agreement will create and grant to the
Pledgee (upon the filing of appropriate UCC-1 financing statements) a valid lien
on, and a perfected security interest in favor of the Pledgee in, all right,
title or interest of the Pledgor in or to the Collateral, subject to the prior
lien in favor of Nationwide as provided in the Intercreditor Agreement, Liens
for Taxes and governmental charges and levies which are not delinquent, which
are being Properly Contested by or on behalf of the
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Pledgor or which are the obligation of Citadel Cinemas or any of its Affiliates
to pay pursuant to any of the Operational Agreements and Liens placed on the
Collateral by, or arising from, the actions or inactions of, or any event or
condition relating to, Citadel Cinemas or any of its Affiliates, whether or not
such Liens are permitted to exist pursuant to the terms of any of the
Operational Agreements.
The Pledgor agrees that the foregoing representations and warranties shall
be deemed to have been made by it on each date of a Notice of Borrowing on or
after the date hereof by Sutton Hill Capital under the Credit Agreement on and
as of such date as though made hereunder on and as of such date.
SECTION 4. Further Assurances; Affirmative Covenants.
The Pledgor covenants and agrees that, from and after the date of this
Agreement until the Obligations are paid in full and the Commitment is
terminated:
a) The Pledgor will promptly execute and deliver and will cause to
be executed and delivered all further instruments and documents,
including, without limitation, financing and continuation statements, and
will take all further action and will cause all further action to be
taken, that the Pledgee may reasonably request in order to create,
preserve, perfect and protect the security interest in the Collateral or
to enable the Pledgee to exercise and enforce its rights and remedies
hereunder or to preserve, perfect and protect the Pledgee's right, title
and interest in and to the Collateral.
b) The Pledgor will at all times keep accurate and complete books
and records with respect to the Collateral and agrees that the Pledgee or
its representative shall have the right at any time and from time to time
to call at the Pledgor's place of business during normal business hours to
inspect and examine the books and records of the Pledgor relating to the
Collateral and to make extracts therefrom and copies thereof.
c) The Pledgor will keep the Collateral free and clear of all
security interests, liens and claims other than the security interest and
lien herein granted and the security interest and lien granted to
Nationwide, Liens for Taxes and governmental charges and levies which are
not delinquent, which are being Properly Contested by or on behalf of the
Pledgor or which are the obligation of Citadel Cinemas or any of its
Affiliates to pay pursuant to any of the Operational Agreements and Liens
placed on the Collateral by, or arising from, the actions or inactions of,
or any event or condition relating to, Citadel Cinemas or any of its
Affiliates, whether or not such Liens are permitted to exist pursuant to
the terms of any of the Operational Agreements, and will not sell, assign,
transfer, exchange or otherwise dispose of, or grant any option with
respect to, the Collateral, except by assignment to the Pledgee and
Nationwide.
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d) The Pledgor will defend the Pledgee's right, title and security
interest in and to the Collateral against claims and demands of all
persons whomsoever, other than Nationwide.
e) If the Pledgor shall, as a result of its ownership of the
Collateral, receive any certificate representing its ownership of the
Membership Interest and all of the Nationwide Indebtedness now or
hereafter owing has been paid in full in accordance with the terms of the
Nationwide Agreement, the Pledgor shall accept the same as the agent of
the Pledgee, hold the same in trust for the Pledgee and deliver the same
forthwith to the Pledgee in the exact form received, duly indorsed by the
Pledgor to the Pledgee, if required.
f) The Pledgor will at all times remain the sole member of Sutton
Hill Capital and will allow no other Person to own or hold any other
ownership rights in the Membership Interest; provided, however, that the
failure to comply with the terms hereof shall not constitute a breach
hereunder if the failure to comply arises as a result of any action or
inaction of, or any condition or event relating to, Citadel Cinemas or any
of its Affiliates.
SECTION 5. Lien or Title Impairment.
a) Subject to the limitations set forth in Section 19 hereof, if, at
the time of the exercise by the Pledgee of its rights and remedies
involving the Membership Interest, title thereto or to any of the Leased
Interests or the Sutton Fee Option shall be subject to a Lien or to a
Title Impairment other than a Pledgor Permitted Lien, the Pledgor shall be
obligated to pay, bond, or otherwise Cure such Lien and to Cure such Title
Impairment.
b) Not less than ten days prior to the date of the anticipated
exercise described in the preceding sentence, the Pledgee shall deliver to
the Pledgor a lien search with respect to the Membership Interest and a
Certificate of Title with respect to the Leased Interests and the Sutton
Fee Option, indicating whether or not any Liens encumbering such
Membership Interest or the interest of Sutton Hill Capital in such other
assets constitute such Liens other than Pledgor Permitted Liens and
whether there exists as to Sutton Hill Capital's title to any of such
assets any such Title Impairment, each as described in the preceding
paragraph.
c) If by reason of the occurrence of an Insolvency or Liquidation
Proceeding of Sutton Hill Capital, Pledgee shall be prevented from
foreclosing on the Membership Interest or its security interest under the
Security Agreement (as defined in the Credit Agreement), Pledgor shall
cause such Insolvency or Liquidation Proceeding to be terminated or
otherwise to be resolved as promptly as practicable and in a manner such
that the applicable transaction can be consummated in accordance with its
terms. All times referred to in Section 5(d) hereof shall be determined
without regard to any additional time that may be permitted or authorized
under any statute or order entered in or applicable to such Insolvency or
Liquidation Proceeding.
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d) In the event the Pledgor does not timely perform any of the
obligations set forth in paragraphs (a), (b) or (c) of this Section 5, the
Pledgee may, after written demand to perform has been served upon the
Pledgor and the Pledgor has been given 15 days to perform, perform said
obligations at the Pledgor's sole cost and expense; provided, however,
that the Pledgee shall not exercise its option to perform said obligations
for up to 90 days if within said 15-day period the Pledgor has commenced
to perform the obligation or obligations in question and thereafter to the
reasonable satisfaction of the Pledgee continues to perform such
obligation or obligations with reasonable diligence. The Pledgor shall,
upon written demand from the Pledgee, reimburse the Pledgee for all costs,
including reasonable attorney's fees and out-of-pocket expenses, and all
liabilities incurred by the Pledgee by reason of the foregoing set forth
in this Section 5, with interest thereon at the rate of eleven and one
quarter percent (11.25%) per annum.
e) The obligations of the Pledgor under this Section 5 hereof and
with respect to the Nationwide Accrued Interest shall be unlimited, with
full recourse to all of the assets of the Pledgor and its partners. The
Pledgor and its partners agree not to request or permit, in any Insolvency
or Liquidation Proceeding of the Pledgor, (i) any plan of reorganization,
or confirmation order with respect thereto, which would include a
provision that would discharge the partners of Pledgor from their
obligations to Pledgee under this Section 5 or (ii) any party in interest
to obtain an injunction that would enjoin or limit the Pledgee's rights
against the partners of the Pledgee or their assets.
SECTION 6. Remedies. (a) Subject in all cases to the terms of the
Intercreditor Agreement, upon the occurrence of an Event of Default and an
acceleration of the Loans, the Pledgee may, in its sole discretion, exercise
with respect to the Collateral, in addition to any other rights and remedies
provided for herein or otherwise available to it, all the rights and remedies of
a secured party under the New York Uniform Commercial Code or other applicable
law, and the Pledgee may also, upon reasonable notice as specified below, sell
the Collateral at public or private sale, at any exchange, broker's board or at
any of the Pledgee's offices or elsewhere, for cash, on credit or for future
delivery, and at such price and upon such other terms as the Pledgee may in good
faith deem commercially reasonable. The Pledgee or any of its Affiliates may be
the purchaser of the Collateral at any such sale and shall be entitled, for the
purpose of bidding and making settlement or payment of the purchase price for
the Collateral, to use and apply any of the Obligations as a credit on account
of the purchase price of the Collateral payable by such Person at such sale.
Each purchaser at any such sale shall acquire the property sold absolutely free
from any claim or right on the part of the Pledgor, and the Pledgor hereby
waives (to the fullest extent permitted by law) all rights of redemption, stay
and/or appraisal which it now has or may at any time in the future have under
any rule of law or statute now existing or hereafter enacted. The Pledgor agrees
that at least fifteen (15) days' notice to the Pledgor of the time and place of
any public sale or the time after which any private sale is to be made shall
constitute reasonable notice. The Pledgee will not be obligated to make any sale
regardless of notice of sale having been given. The Pledgee may adjourn any
public or private sale from time to time by announcement of the time and place
fixed therefor, and such sale may, without further notice, be made at the time
and place to which it was adjourned. The Pledgor
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hereby waives any claims against the Pledgee arising by reason of the fact that
the price at which the Collateral may have been sold at such private sale was
less than the price which might have been obtained at a public sale, even if the
Pledgee accepts the first offer received and does not offer the Collateral to
more than one offeree.
(b) The proceeds of any sale of the Collateral under subsection (a) above
shall be applied in the following manner:
i. FIRST, to the payment of all costs and expenses reasonably
incurred in connection with the sale, collection or other
realization, including reasonable costs, fees and expenses of the
Pledgee and its agents and counsel, all other reasonable expenses,
liabilities and advances made or incurred by the Pledgee in
connection therewith;
ii. SECOND, to the payment, in whole or in part, of the
Nationwide Indebtedness (as defined in the Intercreditor Agreement);
iii. THIRD, to the payment, in whole or in part, of the
Obligations; and
iv. FOURTH, the balance, if any, shall be paid to the Pledgor
or to whomsoever may be lawfully entitled to receive the same, or as
a court of competent jurisdiction may direct.
If the Pledgee or any of its Affiliates is the successful bidder at such sale,
the amount owing to Nationwide must be paid in cash.
(c) The Pledgee has the right to enforce any and all remedies provided in
this Agreement, successively and concurrently, and such action will not operate
to estop or prevent the Pledgee from pursuing any other remedy which the Pledgee
may have at law or in equity or under any other document.
(d) THE PLEDGOR ACKNOWLEDGES THAT ANY PRIVATE SALE OF THE COLLATERAL MAY
RESULT IN PRICES AND OTHER TERMS LESS FAVORABLE TO THE PLEDGOR THAN IF SUCH SALE
WERE A PUBLIC SALE AND THE PLEDGOR AGREES THAT ANY SUCH PRIVATE SALE SHALL BE
DEEMED TO HAVE BEEN MADE IN A COMMERCIALLY REASONABLE MANNER.
SECTION 7. Pledgee Appointed Attorney-in-Fact.
Subject in all cases to the terms of the Intercreditor Agreement, upon the
occurrence and during the continuance of an Event of Default which is not waived
by the Pledgee and following an acceleration of the Loans, the Pledgor hereby
irrevocably makes, constitutes and appoints the Pledgee or any of its officers
or designees its true and lawful attorney-in-fact, with full authority in
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the place and stead of the Pledgor and in the name of the Pledgor or otherwise,
from time to time after the occurrence and during the continuation of an Event
of Default which is not waived by the Pledgee and following an acceleration of
the Loans, to take any action, to execute any instruments and to exercise any
rights, privileges, elections or power of the Pledgor pertaining or relating to
the Collateral which the Pledgee may reasonably deem necessary or desirable to
preserve and enforce its security interest in the Collateral and otherwise to
accomplish the purposes of this Agreement.
SECTION 8. Pledgee May Perform. If the Pledgor fails to perform any
agreement contained herein other than any agreement set forth in Section 5
hereof, the Pledgee may (but shall not be obligated to) itself perform, or cause
performance of, such agreement; provided, however, that the Pledgee shall first
have provided to the Pledgor five (5) Business Days' prior written notice of the
Pledgee's intention so to act (except in cases of emergency when no such notice
shall be required). Any sums expended by the Pledgee pursuant to this Section 7
shall be added to the Obligations and secured by the Collateral.
SECTION 9. Amendments, etc. No amendment, waiver or modification of any
provision of this Agreement, nor consent to any departure by the Pledgor
therefrom, shall in any event be effective unless the same shall be in writing
making specific reference to this Agreement and such amendment, waiver,
modification or consent shall be consented to in one or more writings and signed
by the Pledgor, the Pledgee and Nationwide, and then such amendment, waiver,
modification or consent shall be effective only in the specific instance for the
specific purpose for which given.
SECTION 10. Continuing Security Interest. This Agreement shall create a
continuing security interest in the Collateral and shall (a) except with respect
to the provisions in Section 5 hereof, remain in full force and effect until the
later of (i) the termination of the Commitment or (ii) the payment in full of
the Obligations, (b) be binding upon the Pledgor and (c) inure to the benefit of
the Pledgee and its successors and assigns. If the Pledgee shall have instituted
any proceeding to enforce any right, power or remedy under this instrument by
foreclosure, sale, entry or otherwise, and such proceeding shall have been
discontinued or abandoned for any reason or shall have been determined adversely
to the Pledgee, then and in every such case, the Pledgor and the Pledgee shall
be restored to their respective former positions and rights hereunder with
respect to the Collateral, and all right, remedies and powers of the Pledgee
shall continue as if no such proceeding had been instituted.
SECTION 11. Notices. All notices, offers, acceptances, approvals, waivers,
requests, demands and other communication hereunder or under any other Related
Document shall be in writing, shall be addressed as provided below and shall be
considered as properly given (a) if delivered in person, (b) if sent by express
courier service (including Federal Express, Emery, DHL, Airborne Express, and
other similar express delivery services), (c) in the event overnight delivery
services are not readily available, if mailed by United States Postal Service,
postage prepaid, registered or certified with return receipt requested, or (d)
if sent by telecopy and confirmed; provided, that in the case of a notice by
telecopy, the sender shall in addition confirm such notice by writing sent in
the manner specified in clause (a), (b) or (c) of this Section 10. All notices
shall be effective upon receipt by the addressee; provided, however, that if any
notice is tendered to an addressee and the delivery thereof is refused by such
addressee, such notice shall be
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effective upon such tender. For the purposes of notice, the addresses of the
parties shall be as set forth below; provided, however, that any party shall
have the right to change its address for notice hereunder to any other location
by giving written notice to the other party in the manner set forth herein. The
initial addresses of the parties hereto are as follows:
(a) If to the Pledgor:
Sutton Hill Associates
120 North Robertson Blvd.
Los Angeles, California 90048
Attention: Legal Department
Telecopier: (310) 652-6490
with required copies to:
Ira Levin
Pacific Theatres
120 North Robertson Boulevard
Los Angeles, CA 90048
Telecopier: (310) 652-6490
(b) If to the Pledgee:
Reading International, Inc.
550 South Hope Street
Suite 1825
Los Angeles, CA 90071
Attention: Chief Financial Officer
Telecopier No.: (213) 235-2229
with required copies to:
S. Craig Tompkins
Reading International, Inc.
550 South Hope Street
Suite 1825
Los Angeles, CA 90071
Telecopier No. (213) 235-2229
Each such notice, request or other communication shall be effective when
actually received.
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