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EXHIBIT 10.9(s)
INTERCOMPANY SUBORDINATION AGREEMENT
TO: Bank of America National Trust and Savings
Association, as Administrative Agent (the
"Administrative Agent")
Ladies and Gentlemen:
Reference is made to the certain Second Amended and Restated Reducing
Revolving Credit Agreement dated as of February 12, 1998 (as from time to time
amended, extended, restated, modified or supplemented, the "Credit Agreement;"
capitalized terms used herein shall have the meanings assigned to them in the
Credit Agreement) among Cinemark USA, Inc. (the "Company"), the several
financial institutions party hereto (the "Banks"), Bank of America National
Trust and Savings Association, as agent for the Banks (in such capacity, the
"Administrative Agent"), NationsBank, N.A. as Syndication Agent and BankBoston,
N.A., The Bank of Nova Scotia, CIBC Inc. and Fleet Bank, as Co-Agents,. It is a
requirement of the Credit Agreement that the Subordinated Creditor enter into
this Subordination Agreement.
The Company and its Subsidiaries (each, a "Subordinated Obligor") are
or may become indebted or otherwise obligated to the Company and other of its
Subsidiaries (each, a "Subordinated Creditor"), and desire that the Banks
continue to extend financial accommodations to the Company. For the purpose of
inducing the Banks to grant, continue or renew such financial accommodations,
and in consideration thereof, each Subordinated Creditor agrees as follows:
1. Any and all claims of the Subordinated Creditor against any
Subordinated Obligor, now or hereafter existing, (the "Subordinated Debt"), are,
and shall be at all times, subject and subordinate to any and all Obligations
owing to the Administrative Agent and the Banks (collectively, the "Senior
Creditor").
2. If any Default or Event of Default as defined in the Credit
Agreement (as herein defined) shall at any time occur and be continuing (each, a
"Default"), then at all times thereafter until such Default shall have been
cured, or such Default or the benefits of this sentence shall have been waived
in writing by the Administrative Agent, no Subordinated Obligor shall, directly
or indirectly, make any payment or distribution of assets with respect to the
Subordinated Debt, except as set forth in paragraph 10 hereof. With respect to
any Subordinated Debt which is permitted to be secured, the relevant
Subordinated Creditors agree to not foreclose or take any action with respect
to, or otherwise realize upon, such lien unless and until payment could
otherwise be made on such Subordinated Debt hereunder.
3. In case of (a) any assignment for the benefit of creditors by any
Subordinated Obligor, (b) any proceedings under any bankruptcy or other debtor
relief laws being instituted by or against any Subordinated Obligor, (c) the
appointment of any receiver for any Subordinated Obligor's business or assets,
or (d) any dissolution or winding up of the affairs of any
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Subordinated Obligor and any assignee, trustee in bankruptcy, receiver, debtor
in possession or other person or persons in charge, are hereby directed to pay
to the Administrative Agent the full amount of the Obligations (including
interest and fees to the date of payment) before making any payment of
principal or interest to any Subordinated Creditor under any Subordinated Debt
(whether or not from the proceeds of any security interest securing any
Subordinated Debt). With respect to any Subordinated Debt which is permitted to
be secured, until payment in full of the Obligations (including interest and
fees to the date of payment), any proceeds of such lien shall be applied to the
Obligations.
4. The Senior Creditor is hereby authorized by each Subordinated
Creditor to: (a) renew, compromise, extend, accelerate or otherwise change the
time of payment, or any other terms, of any existing or future Obligations or
any part thereof, (b) increase or decrease the rate of interest payable thereon,
(c) exchange, enforce, waive, release, or fail to perfect any security therefor,
(d) apply such security and direct the order or manner of sale thereof in such
manner as the Senior Creditor may at its discretion determine, (e) release the
Company or any guarantor of any indebtedness of the Company from liability, and
(f) make optional future advances to the Company, all without notice to any
Subordinated Creditor and without affecting the subordination provided by this
Agreement.
5. Each Subordinated Creditor acknowledges and agrees that it shall
have the sole responsibility for obtaining from any Subordinated Obligor such
information concerning any Subordinated Obligor's financial condition or
business operations as they may require, and that Senior Creditor shall not have
any duty at any time to disclose to any Subordinated Creditor any information
relating to the business operations or financial condition of any Subordinated
Obligor.
6. On the written request of the Administrative Agent, each
Subordinated Creditor shall xxxx any note or instrument evidencing any
Subordinated Debt with a conspicuous legend which reads substantially as
follows:
"THIS [NOTE] IS SUBORDINATED TO CERTAIN PRESENT OR FUTURE
INDEBTEDNESS OWING FROM THE MAKER TO THE BANKS PARTY TO SECOND AMENDED
AND RESTATED REDUCING REVOLVING CREDIT AGREEMENT DATED AS OF FEBRUARY
12, 1998 AMONG CINEMARK USA, INC., THE BANKS PARTY THERETO AND BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, AS ADMINISTRATIVE
AGENT, AS AMENDED FROM TIME TO TIME, AND MAY BE ENFORCED ONLY IN
ACCORDANCE WITH THAT CERTAIN SUBORDINATION AGREEMENT DATED AS OF
NOVEMBER 16, 0000 XXXXXXX XXXX XX XXXXXXX NATIONAL TRUST AND SAVINGS
ASSOCIATION, AS ADMINISTRATIVE AGENT AND PROMISOR."
7. In the event that any payment or any cash or noncash distribution is
made to any Subordinated Creditor in violation of the terms of this Agreement
(including receiving proceeds
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from realization upon any security interest securing Subordinated Debt), such
Subordinated Creditor shall receive the same in trust for the benefit of the
Senior Creditor, and shall forthwith remit it to the Administrative Agent in
the form in which it was received, together with such endorsements or documents
as may be necessary to effectively negotiate or transfer the same to the
Administrative Agent.
8. For violation of this Agreement, each Subordinated Creditor shall be
jointly and severally liable for all losses and damages sustained by reason of
such breach.
9. Each Subordinated Creditor agrees not to sell, assign, transfer,
pledge, hypothecate, or encumber any Subordinated Debt except subject expressly
to this Agreement and not to take any lien or security on any of Subordinated
Obligor's property so long as any Obligations shall exist. This Agreement shall
be binding upon the heirs, successors and assigns of the Subordinated Creditors
and Subordinated Obligors.
10. Notwithstanding the provisions of Section 2, (a) a Subordinated
Obligor may make payments or prepayments to a Subordinated Creditor on
Subordinated Debt for its respective share of consolidated tax liability and
(b), so long as no Default or Event of Default has occurred, a Subordinated
Creditor may receive principal and noncash interest payments on the Subordinated
Debt; provided, however, that such payments in the case of subsection (a) does
not cause a Default or Event of Default under any Obligations.
11. This Agreement may be executed in any number of counterparts and
all of such counterparts taken together shall be deemed to constitute one and
the same instrument.
12. THIS AGREEMENT AND ANY INSTRUMENT OR AGREEMENT REQUIRED HEREUNDER,
SHALL BE GOVERNED BY AND CONSTRUED UNDER THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of November 16, 1998.
THE SUBORDINATED CREDITORS LISTED ON
SCHEDULE A HERETO:
By:
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Name:
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Title:
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ACCEPTANCE OF SUBORDINATION
AGREEMENT BY SUBORDINATED OBLIGORS
The undersigned being the Subordinated Obligors named in the foregoing
Subordination Agreement, hereby accept and consent thereto and agree to be bound
by all the provisions thereof, not to make any payment to or on behalf of the
Subordinated Creditors in violation of such agreement and to recognize all
priorities and other rights granted thereby to the Senior Creditor, and its
successors and assigns, and to perform in accordance therewith.
Dated: November 16, 1998
THE SUBORDINATED OBLIGORS LISTED ON
SCHEDULE A HERETO:
By:
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Name:
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Title:
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SCHEDULE A TO INTERCOMPANY SUBORDINATION AGREEMENT
ALL SUBORDINATED CREDITORS
ALL SUBORDINATED OBLIGORS
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