Exhibit 10.42
AMENDED AND RESTATED SECURITY AGREEMENT
THE SECURITY AGREEMENT, dated as of July 28, 2000 (as amended, modified
and supplemented from time to time, this "Agreement"), by and between XXXXXX
XXXX CAPITAL, L.L.C., a New York limited liability company (the "Grantor"), and
CITADEL HOLDING CORPORATION, a Nevada corporation now known as READING
INTERNATIONAL, INC. (the "Company"), is hereby amended and restated as of
January 29, 2002.
W I T N E S S E T H:
WHEREAS, the Grantor and the Company have entered into a certain Citadel
Standby Credit Facility, dated as of July 28, 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 the Grantor and upon the satisfaction of certain conditions
precedent provided for therein, the Company has agreed to make to the Grantor
certain loans in an aggregate principal amount up to eighteen million Dollars
($18,000,000) (hereinafter referred to as the "Loans"); and
WHEREAS, as an inducement to the Company to make the Loans, if any, to the
Grantor, pursuant to the terms of the Credit Agreement, the Grantor 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 Grantor will pledge the
Collateral (as hereinafter defined) in favor of the Company to secure the
performance and repayment of the Grantor's Obligations (as hereinafter defined),
to the extent and in accordance with the terms hereof;
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 Intercreditor 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.
"Citadel Cinemas" shall mean Citadel Cinemas, Inc., a Nevada corporation,
and its successors or 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.
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"Collateral" shall have the meaning assigned to that term in Section 2 of
this Agreement.
"Equipment" shall have the meaning assigned to that term in Article 9 of
the Code.
"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 Grantor in the due performance or observance of any
covenant or obligation of the Grantor contained herein, and, if such default is
capable of cure, the continuance of such default for thirty (30) days after
written notice from the Company to the Grantor; 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 Grantor 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.
"General Intangibles" shall have the meaning assigned to that term in
Article 9-106 of the Code.
"Intercreditor Agreement" shall mean the Intercreditor Agreement, dated as
of July 28, 2000, entered into by and among the Grantor, the Company 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 the Grantor, 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.
"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).
"Nationwide Security Agreement" shall mean the agreement, dated as of July
28, 2000, entered into between the Grantor and Nationwide, as amended and
restated as of January 29, 2002 pursuant to which the Grantor has granted a
first security interest in the Collateral to Nationwide.
"Obligations" shall mean any and all indebtedness, debts, obligations, and
liabilities of the Grantor to the Company from time to time outstanding under
the Related Documents to which the Grantor 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.
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"Operational Agreements" shall have the meaning assigned to that term in
the Credit Agreement.
"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, any and all collections on the foregoing.
"Properly Contested" shall have the meaning assigned to that term in the
Lease Agreement.
"Taxes" shall mean any present or future taxes, levies, imposts, duties,
fees, 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.
SECTION 2. Grant of Security. As security for the prompt and complete
payment when due of the Obligations, the Grantor hereby assigns, pledges,
transfers and grants to the Company a continuing security interest (which shall
be subject and subordinate to the prior security interest granted to Nationwide
pursuant to the Nationwide Security Agreement as and to the extent provided in
the Intercreditor Agreement) in, and a lien upon, all of the Grantor's right,
title and interest in the following property now owned or at any time hereafter
acquired by the Grantor, or in which the Grantor 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) all of the Grantor's right, title and interest, whether now owned
or hereafter acquired, in and to all Equipment, wherever located, now or
hereafter existing, together with any manufacturers' warranties with
respect to the foregoing;
b) all Accounts;
c) all General Intangibles;
d) any and all insurance policies, proceeds or benefits thereof
related to the Collateral, provided that such policies do not expressly
prohibit the grant of such security interest; and
e) to the extent not otherwise included, all Proceeds of any and all
of the foregoing.
Notwithstanding the foregoing, "Collateral" shall not include any general
intangibles, or other rights, arising under any contracts, licenses or other
documents as to which the grant of a security
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interest would constitute a violation of a valid and enforceable restriction in
favor of a third party on such grant, unless and until any required consents
shall have been obtained. The Grantor agrees to use commercially reasonable
efforts to obtain any such required consent with respect to any material items
of such Collateral.
This Agreement shall create a continuing security interest in the
Collateral which 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 Grantor. The Grantor hereby
represents and warrants to the Company that: (i) except as otherwise provided in
the Operational Agreements, no other Person owns or holds any ownership rights
in the Collateral; (ii) the execution, delivery, and performance of this
Agreement are not in violation of any indenture, agreement, or undertaking to
which the Grantor is a party or by which the Grantor 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 Grantor except as contemplated by this
Agreement; (iv) the Grantor's chief executive office and the place where the
Grantor keeps its business records is 000 Xxxxx Xxxxxxxxx Xxxxxxxxx, Xxx
Xxxxxxx, Xxxxxxxxxx 00000; and (v) this Agreement will create and grant to the
Company (upon the filing of appropriate UCC-1 financing statements) a valid lien
on, and a perfected security interest in favor of the Company in, all right,
title or interest of the Grantor in or to the Collateral, subject only 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 Grantor 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.
SECTION 4. Further Assurances; Affirmative Covenants.
The Grantor 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 Grantor 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 Company may reasonably request in order to create,
preserve, perfect and protect the security interest in the Collateral or
to enable the Company to exercise and enforce its rights and remedies
hereunder or to preserve, perfect and protect the Company's right, title
and interest in and to the Collateral.
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b) The Grantor will at all times keep accurate and complete books
and records with respect to the Collateral and agrees that the Company or
its representative shall have the right at any time and from time to time
to call at the Grantor's place of business during normal business hours to
inspect and examine the books and records of the Grantor relating to the
Collateral and to make extracts therefrom and copies thereof.
c) The Grantor 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 or otherwise permitted to exist pursuant to the Credit
Agreement, Liens for Taxes and governmental charges and levies which are
not delinquent, which are being Properly Contested by or on behalf of the
Grantor 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 Company and
Nationwide or the holder of any such other permitted lien.
d) The Grantor will defend the Company's right, title and security
interest in and to the Collateral against claims and demands of all
persons whomsoever, other than Nationwide.
SECTION 5. Remedies. 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 Company 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 Code or other applicable law, and the Company 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 Company's
offices or elsewhere, for cash, on credit or for future delivery, and at such
price and upon such other terms as the Company may in good xxxxx xxxx
commercially reasonable. The Company 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 Grantor, and the Grantor 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 Grantor agrees
that at least fifteen (15) days' notice to the Grantor 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 Company will not be obligated to make any sale
regardless of notice of sale having been given. The Company 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
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which it was adjourned. The Grantor hereby waives any claims against the Company
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 Company 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
Company and its agents and counsel, all other reasonable expenses,
liabilities and advances made or incurred by the Company 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
Grantor or to whomsoever may be lawfully entitled to receive the
same, or as a court of competent jurisdiction may direct.
If the Company or any of its Affiliates is the successful bidder at
such sale, the amount owing to Nationwide in respect of the Nationwide
Indebtedness (as defined in the Intercreditor Agreement) must be paid in full in
cash.
(c) The Company 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 Company from pursuing any other remedy which
the Company may have at law or in equity or under any other document.
(d) THE GRANTOR ACKNOWLEDGES THAT ANY PRIVATE SALE OF THE COLLATERAL
MAY RESULT IN PRICES AND OTHER TERMS LESS FAVORABLE TO THE GRANTOR THAN IF SUCH
SALE WERE A PUBLIC SALE AND THE GRANTOR AGREES THAT ANY SUCH PRIVATE SALE SHALL
BE DEEMED TO HAVE BEEN MADE IN A COMMERCIALLY REASONABLE MANNER.
SECTION 6. Company 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 Company and
following an acceleration of the Loans, the Grantor hereby irrevocably makes,
constitutes and appoints the Company or any of its officers or designees its
true
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and lawful attorney-in-fact, with full authority in the place and stead of the
Grantor and in the name of the Grantor or otherwise, from time to time after the
occurrence and during the continuation of an Event of Default which is not
waived by the Company 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 Grantor pertaining or relating to the Collateral which
the Company 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.
SECOND 7. Company May Perform. If the Grantor fails to perform any
agreement contained herein, the Company may (but shall not be obligated to)
itself perform, or cause performance of, such agreement; provided, however, that
the Company shall first have provided to the Grantor five (5) Business Days'
prior written notice of the Company's intention so to act (except in cases of
emergency when no such notice shall be required). Any sums expended by the
Company pursuant to this Section 7 shall be added to the Obligations and secured
by the Collateral.
SECTION 8. Amendments, etc. No amendment, waiver or modification of any
provision of this Agreement, nor consent to any departure by the Grantor
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 Grantor, the Company 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 9. Continuing Security Interest. This Agreement shall create a
continuing security interest in the Collateral and shall (a) 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 Grantor and
(c) inure to the benefit of the Company and its successors and assigns. If the
Company 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 Company, then and in every such case, the
Grantor and the Company shall be restored to their respective former positions
and rights hereunder with respect to the Collateral, and all right, remedies and
powers of the Company shall continue as if no such proceeding had been
instituted.
SECTION 10. 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, Xxxxx, 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
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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 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 Grantor:
Xxxxxx Hill Capital, L.L.C.
000 Xxxxx Xxxxxxxxx Xxxx.
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Legal Department
Telecopier: (000) 000-0000
with required copies to:
Xxx Xxxxx
Pacific Theatres
000 Xxxxx Xxxxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, XX 00000
Telecopier: (000) 000-0000
(b) If to the Company:
Reading International, Inc.
000 Xxxxx Xxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attention: Chief Financial Officer
Telecopier No.: (000) 000-0000
with required copies to:
S. Xxxxx Xxxxxxxx
Reading International, Inc.
000 Xxxxx Xxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Telecopier No. (000) 000-0000
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Each such notice, request or other communication shall be effective when
actually received.
SECTION 11. Governing Law. THIS AGREEMENT HAS BEEN DELIVERED AT, AND SHALL
BE EFFECTIVE WHEN EXECUTED BY THE GRANTOR AND THE COMPANY IN, NEW YORK, NEW
YORK, WHEREUPON THIS AGREEMENT SHALL BE DEEMED A CONTRACT MADE IN NEW YORK AND
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK.
SECTION 12. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 13. Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto on separate counterparts, each of
which counterparts, when executed and delivered, shall be deemed an original and
all of which counterparts, taken together, shall constitute one and the same
instrument.
SECTION 14. Benefits. The rights and privileges of the Company hereunder
shall inure to the benefit of its successors and assigns and the obligations of
the Grantor shall be binding on the Grantor's successors and assigns.
SECTION 15. Powers Coupled With An Interest. All authorizations and
agencies herein contained with respect to the Collateral are irrevocable and
powers coupled with an interest.
SECTION 16. Paragraph Headings. The Article and Section headings in this
Agreement and the table of contents are for convenience of reference only and
shall not affect the construction hereof or be taken into consideration in the
interpretation hereof.
SECTION 17. Waiver of Jury Trial. THE PARTIES HERETO KNOWINGLY,
VOLUNTARILY AND EXPRESSLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ENFORCING OR DEFENDING ANY RIGHTS ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. THE GRANTOR
ACKNOWLEDGES THAT THE PROVISIONS OF THIS SECTION 17 HAVE BEEN BARGAINED FOR AND
THAT IT HAS BEEN REPRESENTED BY COUNSEL IN CONNECTION HEREWITH.
SECTION 18. Termination. After the later of (i) the termination of the
Commitment or (ii) the payment in full of the Obligations, this Agreement shall
terminate and the Company at the request of the Grantor will execute and deliver
to the Grantor a proper instrument or instruments
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acknowledging the satisfaction and termination of this Agreement, and will duly
assign, transfer and deliver to the Grantor such of the Collateral as may be in
the possession of the Company and as has not theretofore been sold or otherwise
applied or released pursuant to this Agreement, together with any moneys at the
time held by the Company.
SECTION 19. Conflict Of Provisions. In the event of any conflict between
any term, covenant or condition of this Agreement and any term, covenant or
condition of the Intercreditor Agreement, the provisions of the Intercreditor
Agreement shall control and govern.
SECTION 20. Limited Recourse. No recourse for the payment of the principal
of, or interest on, the Obligations or obligations of the Grantor hereunder or
any other amount due under this Agreement, or for any claim based thereon or
otherwise in respect thereof or hereof, shall be had against any direct or
indirect member or owner of the Grantor or any incorporator, partner,
shareholder, officer, member, Affiliate or director, as such, past, present or
future, of any such direct or indirect member or owner except as provided in the
Pledge Agreement (as defined in the Credit Agreement). Nothing contained in this
Section 20 shall be construed to limit the exercise or enforcement, in
accordance with the terms of this Agreement and the other documents referred to
herein, of rights and remedies against the Collateral, or any other Person
expressly undertaking in writing obligations in connection with the transactions
contemplated hereby.
SECTION 21. Cumulative Rights; No Waiver. No failure on the part of the
Company to exercise, no course of dealing with respect to, and no delay on the
part of the Company in exercising, any right, power or remedy hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
such 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
provided are cumulative and are not exclusive of any remedies provided by law.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
GRANTOR:
XXXXXX XXXX CAPITAL, L.L.C.
By:____________________________________
Name:
Title:
COMPANY:
READING INTERNATIONAL, INC.
By:___________________________________
Name:
Title:
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EXHIBIT G
AMENDED AND RESTATED INTERCREDITOR AGREEMENT
