Exhibit 10.49
Omnibus Amendment Agreement
This omnibus amendment agreement (this "Agreement") is entered into as of this
22nd day of October, 2003, by and among Citadel Cinemas, Inc. ("Citadel"),
Xxxxxx Xxxx Capital LLC ("Xxxxxx Capital"), Nationwide Theatres Corp
("Nationwide"), Xxxxxx Xxxx Associates ("Sutton Associates"), and Reading
International, Inc. ("Reading"), with reference to the following facts:
WHEREAS, Citadel and Xxxxxx Capital are (i) the tenant and landlord,
respectively, of the improvements located at 205 - 000 Xxxx 00xx Xxxxxx and 000
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, consisting of a cinema and a Wendy's
restaurant, and referred to herein as the "Xxxxxx Cinema Property" and with
respect to the "landlord" interest under the lease pertaining to the Wendy's
restaurant (the "Wendy's Lease"), and (ii) the sub-tenant and sub-landlord of
the land underlying the Xxxxxx Cinema Property (the "Land" and collectively with
the Xxxxxx Cinema Property and the landlord interest in the Wendy's Lease,
referred to herein as the "Xxxxxx Property") owned by Nationwide, all under a
master lease (the "Master Lease") between Citadel and Xxxxxx Hill dated as of
July 28, 2000 as amended and restated as of January 29, 2002 and (iii) the
option holder and option grantor, respectively, of an option to acquire the Land
under the Master Lease and a related option agreement dated as of July 28, 2000,
as amended and restated as of January 29, 2003 (the "Fee Option Agreement");
WHEREAS, the Master Lease covers properties in addition to the Xxxxxx Property
and, together with the Fee Option Agreement grants an option on the part of
Citadel to purchase the Xxxxxx Property, which option can only be exercised in
2010 and can only be exercised in connection with the purchase by Citadel of all
of the other properties covered by the Master Lease (the "Citadel Purchase
Option");
WHEREAS, Reading is the parent of Citadel, and Reading and Xxxxxx Capital are
parties to an standby line of credit agreement dated as of July 28, 2000, as
amended and restated as of January 29, 2002 (the "Standby Credit Agreement")
pursuant to which Reading has agreed to lend to Xxxxxx Capital, commencing July
2007, $18 million in order to provide liquidity to Xxxxxx Capital (the principal
amount of Reading's loan commitment under the Standby Credit Agreement, being
referred to herein as the "Standby Credit Commitment");
WHEREAS, Reading, Xxxxxx Capital and Nationwide are also parties to an
intercreditor agreement dated as of July 28, 2000, as amended and restated as of
January 29, 2002 (the "Intercreditor Agreement") addressing the respective
rights and obligations of Reading and Nationwide as creditors of Sutton Capital;
WHEREAS, Xxxxxx Associates is the parent of Xxxxxx Capital, and has entered into
a pledge agreement dated as of July 28, 2000, as amended and restated as of
January 29,
2002 (the "Xxxxxx Pledge Agreement") securing various obligations of Xxxxxx
Capital to Reading under the Standby Credit Agreement and/or the Intercreditor
Agreement;
WHEREAS, the parties would like to sell the Xxxxxx Property to 205-209 00xx
Xxxxxx Associates LLC, a third party ( referred to herein collectively with its
successors, assigns and/or title holding nominee as the "Buyer"); and
WHEREAS, the parties wish to provide to Citadel the full economic benefit of the
sale of Xxxxxx Property, as though Citadel had in fact exercised its Citadel
Purchase Option with respect to the Xxxxxx Property, but Citadel does not wish
at this time to exercise its Citadel Purchase Option with respect to the
remainder of the properties subject to its Citadel Purchase Option or to commit
to exercise its Citadel Purchase Option in the future, and Xxxxxx Capital does
not wish to lose the benefit of its bargain that the Citadel Purchase Option be
exercised on an all-or-none basis, and not on a basis that would allow Citadel
to, in essence, pick and choose among the various assets subject to its Citadel
Purchase Option;
WHEREAS, a portion of the purchase price to be paid by Buyer will be in the form
of a promissory note and it is the intention of the parties that the principal
amount of that promissory note will be lent to Xxxxxx Capital under the Standby
Credit Agreement on a date sooner than it would have otherwise been available to
Xxxxxx Capital or, in the event of a default by the Buyer, that the Xxxxxx
Property may be taken back by Xxxxxx Capital and returned to the Master Lease,
if alternative arrangements are not made for the funding of the Standby Credit
Agreement, and the rights and obligations of the parties under the Master Lease
and the Standby Credit Agreement shall be reinstated as provided herein;
NOW THEREFORE, in consideration of the above stated premises, and other good and
valid consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto do hereby agree as follows:
1. Sale of Xxxxxx Property. Each of Citadel, Xxxxxx Capital and
Nationwide hereby agree to sell their respective interests in the
Xxxxxx Property to the Buyer with the intent that upon the completion
of such sale transaction, Buyer will be the fee owner of the Xxxxxx
Property subject only to easements and interests of record, the lease
with respect to the Wendy's Lease, and Citadel's rights under Citadel
License (as defined below). Nationwide will sell its fee interest in
the Land. Xxxxxx Capital will sell its tenancy in the Land and its
ownership interest in the Xxxxxx Cinema Property and its landlord
interest in the Wendy's Lease. Citadel will sell its sub-tenancy in
the Land, its tenancy in the Xxxxxx Cinema Property, its landlord
interest in the Wendy's Lease and its rights under its Citadel
Purchase Option. The consideration to be paid by the Buyer will be
allocated $5 million to Nationwide and Xxxxxx Capital (to be further
allocated between them as they may determine) and $13 million to
Citadel, and will be paid $5 million in cash to Nationwide and Xxxxxx
Hill at the closing (to be allocated between them as they may
determine), and $13 million, in the form of a purchase money
promissory
note (the "Purchase Money Note") secured by a first mortgage on the
Xxxxxx Property (the "Mortgage") and by certain guarantees and other
security interests (such other guarantees and security interests being
collectively referred to herein as the "Ancillary Security Documents")
all to or for the benefit of Citadel. In addition, it is understood
that Citadel has negotiated the right to retain a license to operate a
cinema in the cinema portion of the Xxxxxx Property (the "Cinema
License"), and a right to purchase up to a 25% equity interest in the
Buyer or in lieu thereof to receive a payment in the amount of
$650,000 (the "Citadel Reinvestment Option") and that in connection
with such Citadel Reinvestment Option the Buyer has agreed to issue in
favor of Citadel a second promissory note in the amount of $650,000
(the "In Lieu Note") that will also be secured by the Mortgage. All
costs and expenses of the selling group (including, without
limitation, filing fees, title fees, and attorneys fees, will be
shared 50% by Nationwide and Xxxxxx Capital (to be further allocated
between them as they may determine) and 50% by Citadel.
2. Amendment of Master Lease. The Master Lease will be amended, effective
upon the sale of the Xxxxxx Property, to eliminate the Xxxxxx Cinema
Property from the Master Lease and to reflect the receipt by
Nationwide and Xxxxxx Capital of $5 million in consideration of their
respective interests in the Xxxxxx Property. This amendment will
provide, in material part, as follows:
a. The rent payable under the Master Lease (the "Rent") will be
reduced by $429,080 annually (i.e. 8.5816% of $5 million);
b. The "Acquisition Cost" (as defined in the Master Lease) will
be reduced to $33 million;
c. The rent adjustment provisions set forth in the definition
of "Applicable Rent Amount"( as defined in the Master Lease)
will be likewise adjusted to reflect a ratio of Standby
Credit Commitment to Net Acquisition Cost of 13/28ths or
46.42%, where "Net Acquisition Cost" means Acquisition Cost
of $33 million less the previously paid "Option Fee" (as
defined in the Master Lease) of $5 million;
d. All references to the Xxxxxx Property and or the right of
Citadel to purchase the Xxxxxx Property will be eliminated;
and
e. To make such other conforming changes are needed to conform
with the intentions of the parties as evidenced by this
Agreement.
3. Amendment of Standby Credit Agreement. The Standby Credit Agreement
will be amended, effective as of the sale of the Xxxxxx Property, to
reflect the receipt by Nationwide and Xxxxxx Capital of $5 million.
This amendment will provide in material part as follows:
a. The "Commitment" (as defined in the Standby Credit
Agreement) will be reduced from $18 million to $13 million;
b. The "Initial Drawdown Date" (as defined in the Standby
Credit Agreement) will be moved forward to the earlier of
the date on which Citadel is paid the full principal amount
of the Purchase Money Note or that date ninety (90) days
after Purchase Money Note is otherwise due and payable (by
acceleration or otherwise); provided, that Citadel will
retain the right to use up to $5 million of such proceeds to
fund (in whole or in part) its Citadel Reinvestment Option
(the "Reinvestment Funds"). If Citadel uses such
Reinvestment Funds to fund its Citadel Reinvestment Option,
then the remainder of the Standby Line of Credit can be
drawn down beginning on July 28, 2007 (the original Initial
Drawdown Date);
c. Section 2.2 will be modified to provide as follows: (i) in
the event of a payment of principal of the Purchase Money
Note, Xxxxxx Capital shall be deemed to have given a Notice
of Borrowing in the amount of such principal payment (less,
if applicable, the Reinvestment Funds), Xxxxxx Capital shall
retain the amount of such principal payment as a draw down
under the Standby Credit Agreement, and Reading shall be
deemed to have funded the Standby Credit Agreement in the
amount of such principal payment, and (ii) in the event
that, as of the maturity of the Purchase Money Note (by
acceleration or otherwise), there shall remain unpaid
principal of the Purchase Money Note (other than the
Reinvestment Funds), Xxxxxx Capital shall be deemed to have
given a Notice of Borrowing in the amount of such remaining
unpaid principal on the date of such maturity, in which
event, Citadel shall have the option of either (A) paying
the balance of such funds (up to a maximum funding of $13
million) in satisfaction of its funding obligations under
the Standby Credit Agreement or (B) assigning to Xxxxxx
Capital (or causing Citadel to assign to Xxxxxx Capital, as
the case may be) the Purchase Money Note, the In Lieu Note
(if not previously satisfied), (1) the Mortgage and the
Ancillary Security Documents (the "Xxxxxx Sales Proceeds")
in accordance with paragraph 5, below, in which case the
Initial Drawdown Date will be deferred until July 29, 2007.
A provision will be added authorizing Xxxxxx Capital at any
time prior to the funding of the Borrowing, to elect to
defer borrowing under the Standby Line of Credit. In the
event that (i) Xxxxxx Capital elects to defer borrowing all
or any portion of the amount of any actual or deemed Notice
of Borrowing, notwithstanding (ii) Reading's tender for
borrowing of the difference between $13 million and the
Reinvestment Funds (the
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(1) The In Lieu Note may be paid prior to the maturity of the Purchase Money
Note, in which case Citadel will not be required to deliver the In Lieu Note or
any proceeds therefrom in order to perform under this alternative performance
provision and the term "Xxxxxx Sales Proceeds" will from such date be deemed not
to include either the In Lieu Note or any payments with respect thereto.
"Available Funding") or Xxxxxx Capital's possession of the
Available Funding as "Pledgee" under the "Citadel Pledge
Agreement" as hereinafter defined, Xxxxxx Capital will be
liable to Reading for the spread between rate paid by
Citadel's bank on its cash deposits (currently 1%) and the
Interest Rate (as such term is defined under the Standby
Credit Agreement) on the Available Funding from the date of
such tender or possession until drawdown by Xxxxxx Capital.
d. A provision will be added to the Standby Credit Agreement to
the effect that in the event that Citadel fails to timely
exercise its Citadel Purchase Option for any reason other
than default by Xxxxxx Capital of its obligations under the
Master Lease, the Standby Credit Agreement and/or any of the
"Related Documents" (as such term is defined in the Standby
Credit Agreement), the principal amount of any loan
outstanding under the Standby Credit Agreement will be
immediately and automatically forgiven without the need for
any other acts or actions by Reading or Xxxxxx Capital;
provided, however, that Xxxxxx Capital will remain liable to
Reading for any and all accrued but unpaid interest and/or
any other amounts (other than principal) accrued and unpaid
under the Standby Credit Agreement and/or any of the Related
Documents. (2)
e. The note previously executed and delivered by Xxxxxx Capital
in the form attached as Exhibit A to the Standby Credit
Agreement shall be returned to Xxxxxx Capital, and Xxxxxx
Capital shall execute and deliver to Reading a new note in
the same form, subject to the following modifications: (i)
the principal amount of such note shall be $13,000,000, (ii)
the note shall not be negotiable, and (iii) the note shall
provide that repayment of the same is subject to the
provisions of the Standby Credit Agreement;
f. Section 4.1 of the Standby Credit Agreement will be modified
to provide that the items identified in subparts (a), (b),
(f), (g), (i), and (j) will be delivered to Reading upon,
or within three business days following, the closing of the
sale of the Xxxxxx Property, and that the requirements of
subparts (h) and (k) will be satisfied by the delivery of a
Borrowers certificate to such effect, countersigned by
Nationwide, and delivered by Borrower and Nationwide
contemporaneously with the drawdown of the facility. The
note identified in subpart (a) and the security agreement
and pledge agreement identified in subpart (f) of Section
4.1. of the Standby Credit Agreement shall be modified to
provide that they evidence and secure the obligation of
Xxxxxx Capital to repay only such portion of the
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(2) The purpose of this debt forgiveness provision is to provide to Citadel the
same benefits as it would have had if it had exercised its Citadel Purchase
Option with respect to the Xxxxxx Property exclusively, but to provide to Xxxxxx
Capital the benefit of its bargain that the Citadel Purchase Option be exercised
on an all-or-nothing basis and not on a some but not others basis, in the event
that ultimately, at the end of the term of the Citadel Purchase Option, Citadel
does not elect to acquire the remainder of the properties then subject to the
Master Lease.
Standby Credit Facility that has actually been funded and
not repaid (or forgiven in accordance with paragraph 3(d),
above).
g. Section 7.3 of the Standby Credit Agreement will be modified
to reduce the maximum indebtedness of the Borrower from $29
million to $24 million;
h. All references to Citadel's option to purchase the Xxxxxx
Property and/or to the Xxxxxx/Xxxxxx Guaranty will be
eliminated; and
i. To make such other conforming changes as may be needed to
conform the Standby Credit Agreement and all of the "Related
Documents" as such term is defined in the Standby Credit
Agreement with the intentions of the parties as evidenced by
this Agreement.
4. The Xxxxxx Pledge Agreement. The Xxxxxx Pledge Agreement will be
amended effective as of the sale of the Xxxxxx Property to conform
with the changes made to the Master Lease, the Standby Credit
Agreement, the Intercreditor Agreement and the Related Documents, and
to otherwise conform to the intentions of the parties as evidenced by
this Agreement.
5. Additional Agreements. It is acknowledged by the parties that there is
a risk that the Buyer may default under the Purchase Money Note which
may jeopardize Xxxxxx Capital's ability to obtain acceleration of its
drawdown under the Standby Credit Agreement. It is also acknowledged
that, in the event that Citadel chooses to exercise its Citadel
Reinvestment Option and to use the Reinvestment Funds to fund such
exercise, Xxxxxx Capital will be deferring until July 29, 2007 its
right to otherwise receive, as drawdowns under the Standby Line of
Credit, that portion of the proceeds from the Xxxxxx Property used to
so fund the Citadel Reinvestment Option. In order to address these
risks, Citadel has agreed to guarantee the obligations of Reading
under the Standby Credit Agreement (the "Citadel Guarantee"), and to
pledge to Xxxxxx Capital its interest in the Xxxxxx Sales Proceeds
and, should it choose to exercise its Citadel Reinvestment Option, its
resultant interest in the Buyer (the "Reinvestment Interest"), in each
case to secure its obligations under the Citadel Guarantee. (the
"Citadel Pledge"). The items pledged pursuant to the Citadel Pledge
are referred to herein as the "Collateral." In furtherance of the
pledge, Citadel will (i) endorse and deliver the Purchase Money Note
and the In Lieu Note, (3) (ii) assign and record the assignment of the
Mortgage, and (iii) assign the Ancillary Security Documents, in each
case to Xxxxxx Capital. In the event that the Purchase Money Note is
not paid upon maturity (whether by acceleration or otherwise), Reading
shall have the option, on or before the Initial Drawdown Date (as
modified by paragraph 3(b), above), to fund from other sources the
remaining portion of the Standby Credit Commitment
--------------------
(3) To the extent that Citadel elects to surrender the In Lieu Note for payment,
Xxxxxx Capital will promptly upon request release and reassign the same to
Citadel, in which case the In Lieu Note will no longer be deemed to be included
within the Xxxxxx Sales Proceeds.
or to assign to Xxxxxx Capital the entire ownership interest in the
Xxxxxx Sales Proceeds free and clear of all liens and other claims
(other than the rights of Xxxxxx Capital created by this Agreement
and/or the "Pledgor Permitted Liens" as such term is defined in the
Citadel Pledge Agreement). Only if Reading does neither on or before
the Initial Drawdown Date, will Citadel be in default under the
Citadel Guarantee for Reading's failure to fund the Notice of
Borrowing deemed given upon maturity of the Purchase Money Note, and
Xxxxxx Capital may thereafter foreclose its security interest in the
Collateral as provided in the Citadel Pledge Agreement. The
obligations of Citadel and Xxxxxx Capital under the Citadel Guarantee
and under the Citadel Pledge are set out in the Citadel Guarantee
Agreement and the Citadel Pledge Agreement attached as Attachments 1
and 2 to this agreement. Citadel's obligations under the Citadel
Guarantee and the Citadel Pledge will dissolve and be of no further
force or effect immediately upon the earlier of (i) the funding of the
entirety of the Standby Credit Commitment and (ii) the surrender by
Reading and/or Citadel of the Xxxxxx Sale Proceeds (the "Termination
Date").
6. Effect of Exercise of Rights. In the event that Citadel transfers its
entire right, title and interest in the Xxxxxx Sales Proceeds to
Xxxxxx Capital, or Xxxxxx Capital acquires ownership of the Xxxxxx
Sales Proceeds through exercise of its rights under the Citadel Pledge
Agreement, or otherwise, Xxxxxx Capital agrees to foreclose on such
Collateral as provided hereinbelow.
x. Xxxxxx Capital will, in consultation and cooperation with
Citadel, promptly move to foreclose the Mortgage and/or to
enforce its rights under the Ancillary Security Documents,
and at any mortgage sale will bid (unless otherwise agreed
with Citadel) the full amount of the indebtedness secured by
the Mortgage. In the event that the property is sold to a
higher bidder, the proceeds will be applied as follows: (i)
first, to pay the costs of collection and enforcement of the
Mortgage, (ii) second, to accrued interest and late fees on
the Purchase Money Note (which will be reimbursed to Citadel
as a credit against payments of rent made under the Master
Lease), (iii) third, to fund the full amount of the Standby
Credit Commitment, and (iv) fourth, to pay principal and
accrued interest and late fees on the In Lieu Note. (With
respect to item (iii), above, Xxxxxx Capital shall be deemed
to have given a Notice of Borrowing as of the date on which
it receives such sums in the amount thereof.) In the event
that Xxxxxx Capital obtains ownership of the Xxxxxx
Property, either through foreclosure, a deed in lieu of
foreclosure or otherwise, then the Xxxxxx Property
(including without limitation the fee interest in the Xxxxxx
Property) will be added back to the Master Lease and to the
Purchase Option, with no increase in rent or adjustment to
the exercise price of the Purchase Option (such option to
include the fee interest in the Xxxxxx Property and to have
an exercise price equal to $33 million (or after credit of
the $5,000,000 option fee previously paid by Citadel to
Xxxxxx Capital, $28,000,000));
b. The Standby Loan Agreement will be modified so as to make
the "Initial Drawdown Date" July 29, 2007 and so as to
eliminate the changes made under Sections 3.b, 3.c, 3.d,
3.f, 3.h (to the extent it relates to the Citadel's option
to purchase the Xxxxxx Property), and 3.i (to the extent
necessary to reflect the deletion of the foregoing
provisions).
7. Miscellaneous Provisions.
a. Interpretation: This Agreement is to be interpreted in a
fair and evenhanded manner, with the attention of achieving
the overall intentions of the parties and without reference
to any rule of interpretation or construction putting
responsibility for ambiguity or uncertainty upon the
drafting party. Section headings are for the convenience of
the parties only, and are not to be used as an aid to
interpretation of this Agreement.
b. Choice of Law: This Agreement shall be governed by and
construed under the laws of the State of New York, as such
laws are applicable to contracts between parties located in
and to be fully performed within the State of New York.
c. Counterpart Execution: This Agreement may be executed in any
one or more counterparts.
IN WITNESS WHEREOF, this Agreement has been entered into as of the date first
set forth above.
Citadel Cinemas, Inc.
By: /s/ S. Xxxxx Xxxxxxxx
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Its: Vice Chairman
Reading International, Inc.
By: /s/ S. Xxxxx Xxxxxxxx
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Its: Executive Vice President
Xxxxxx Xxxx Capital, LLC.
By: /s/ Xxxxx X. Xxxxxxxx
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Its: Manager
Xxxxxx Xxxx Associates
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------
Its: Partner
Nationwide Theatres Corp.
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------
Its: Vice President
ATTACHMENT 1
GUARANTEE OF LENDER'S OBLIGATIONS UNDER STANDBY CREDIT
AGREEMENT
GUARANTEE, dated as of October __, 2003 (this "Guarantee"), from CITADEL
CINEMAS, INC, a Nevada corporation (the "Guarantor"), in favor of XXXXXX HILL
CAPITAL, L.L.C., a New York limited liability company (the "Xxxxxx Capital"),
and its successors and assigns.
WHEREAS, the Guarantor wishes to induce the Xxxxxx Capital to enter into a
new amendment and restatement of a certain Operating Lease (as defined below)
with the Guarantor and to enter into certain related transactions; and
WHEREAS, the Xxxxxx Xxxx is unwilling to enter into the amendment and
restatement of the Operating Lease and the related transactions unless the
Guarantor enters into this Guarantee of the obligations of the Lender (as
defined below) which is an Affiliate (as defined below) of the Guarantor to
Xxxxxx Capital under the Standby Credit Agreement (as defined below) and/or the
Intercreditor Agreement (as defined below);
NOW, THEREFORE, in order to induce Xxxxxx Capital to enter into the new
amendment and restatement of the Operating Lease and the related transactions,
the Guarantor hereby agrees as follows:
SECTION 1
DEFINED TERMS
RULES OF CONSTRUCTION
1.1 DEFINITIONS
As used in this Guarantee, capitalized terms defined in the preamble,
Preliminary Statements and other Sections of this Guarantee shall have the
meanings set forth therein, terms defined in Exhibit A shall have the meanings
set forth therein, and capitalized terms used herein or in Exhibit A but not
otherwise defined herein or in Exhibit A shall, except as otherwise provided in
the Standby Credit Agreement, have the meanings set forth in the Standby Credit
Agreement.
1.2 ACCOUNTING TERMS
All accounting terms not specifically defined herein shall be construed in
accordance with generally accepted accounting principles.
1.3 USE OF CERTAIN TERMS
Unless the context of this Guarantee requires otherwise, the plural
includes the singular, the singular includes the plural, and "including" has the
inclusive meaning of "including without
limitation." The words "hereof," "herein," "hereby," "hereunder," and other
similar terms of this Guarantee refer to this Guarantee as a whole and not
exclusively to any particular provision of this Guarantee. All pronouns and any
variations thereof shall be deemed to refer to masculine, feminine, or neuter,
singular or plural, as the identity of the Person or Persons may require.
1.4 HEADINGS AND REFERENCES
Section and other headings are for reference only, and shall not affect the
interpretation or meaning of any provision of this Guarantee. Unless otherwise
provided, references to Articles, Sections, Schedules, and Exhibits shall be
deemed references to Articles, Sections, Schedules, and Exhibits of this
Guarantee. References to this Guarantee and any other Operative Document include
this Guarantee and the other Operative Documents as the same may be modified,
amended, restated or supplemented from time to time pursuant to the provisions
hereof or thereof. A reference to any Law shall mean that Law as it may be
amended, modified or supplemented from time to time, and any successor Law. A
reference to a Person includes the successors and assigns of such Person, but
such reference shall not increase, decrease or otherwise modify in any way the
provisions in this Guarantee governing the assignment of rights and obligations
under or the binding effect of any provision of this Guarantee.
SECTION 2
GUARANTEE
2.1 GUARANTEE
Subject to the terms and conditions in this Guarantee, the Guarantor
absolutely, unconditionally and irrevocably guarantees to Xxxxxx Capital that
the Lender will duly and punctually perform, comply with, and observe all
Obligations as and when required in accordance with the terms thereof and
subject to the conditions thereof, in each case, without regard to whether such
Obligation is direct or indirect, absolute or contingent, now or hereafter
existing or owing, voluntary or involuntary, created or arising by contract,
operation of Law or otherwise, all to the same extent, except as otherwise
specifically provided herein, as if the Guarantor were the Lender under the
Standby Credit Agreement and/or under the Intercreditor Agreement; provided,
however, that the foregoing limitation imposing on the Guarantor obligations
hereunder as if it were the Lender under the Standby Credit Agreement (except as
herein set forth) and/or under the Intercreditor Agreement shall not limit
obligations of the Guarantor hereunder to the extent the limitations (including
termination, disavowal, rejection or reduction) of any such obligation of the
Lender results from an Insolvency or Liquidation Proceeding, and in such event
the Guarantor shall be liable in respect of obligations of the Lender pursuant
to the Standby Credit Agreement and/or under the Intercreditor Agreement as if
no such Insolvency or Liquidation Proceeding had been initiated.
2.2 GUARANTEE ABSOLUTE
Subject to the terms and conditions of the Guarantee, including without
limitation Section 2.7, this Guarantee is an absolute, unlimited and continuing
guaranty of performance and payment (and not of collection) of the Obligations.
This Guarantee is in no way conditioned upon any attempt to collect from the
Lender or upon any other event of contingency, and shall be binding upon and
enforceable against the Guarantor without regard to the validity or
enforceability of any Operative Document, or of any term thereof or obligation
thereunder.
The obligations of the Guarantor set forth herein constitute full recourse
obligations of the Guarantor enforceable against it to the full extent of all
its assets and properties. Without limiting the foregoing, it is agreed and
understood that repeated and successive demands may be made and recoveries may
be had hereunder as and when, from time to time, the Lender shall be in default
with respect to the Obligations under the terms of the Standby Credit Agreement
and/or the Intercreditor Agreement and that, notwithstanding the recovery
hereunder for or in respect of any given default with respect to the Obligations
by the Lender under the Standby Credit Agreement and/or under the Intercreditor
Agreement, this Guarantee shall remain in full force and effect said shall apply
to each and every subsequent default with respect to the Obligations; but the
foregoing shall not limit rights and remedies under the Standby Credit
Agreement, the Intercreditor Agreement, or the Obligations hereunder.
2.3 REINSTATEMENT
In case any Operative Document or obligation thereunder shall be terminated
as a result of the rejection thereof by any trustee, receiver or liquidating
agent of the Lender or any of its properties in any Insolvency or Liquidation
Proceeding, the Guarantor's obligations hereunder shall continue to the same
extent as if such agreement had not been so rejected. The Guarantor agrees that
this Guarantee shall continue to be effective or be reinstated, as the case may
be, if at any time payment to Xxxxxx Capital of the Obligations or any part
thereof is rescinded or must otherwise be returned by Xxxxxx Capital upon the
Insolvency or Liquidation Proceeding, as though such payment to Xxxxxx Capital
had not been made.
2.4 ENFORCEMENT
The Guarantor shall pay all costs, expenses and damages incurred (including
reasonable attorneys' fees and disbursements) in connection with the enforcement
of the obligations to the extent that such costs, expenses and damages are not
paid by the Lender, said in connection with the enforcement of the obligations
of the Guarantor under this Guarantee.
2.5 RIGHTS OF SETOFF, ETC.
The obligations of the Guarantor hereunder shall be subject to the same
counterclaims, setoffs, deductions and defenses as would be available to the
Guarantor if the Guarantor were the Lender under the Standby Credit Agreement,
and/or the Intercreditor Agreement. Except as provided in the immediately
preceding sentence, the obligations of the Guarantor hereunder shall not be
subject to any counterclaims, setoffs, deductions or defenses (other than
payment, performance or affirmative discharge, release or termination of this
Guarantee by Xxxxxx Capital) that the Guarantor may have against the Lender or
any other Person, and shall remain in full
force and effect without regard to, and shall not be released, discharged,
reduced or in any way affected by any circumstance or condition (whether or not
the Guarantor shall have any knowledge or notice thereof) whatsoever which might
constitute a legal or equitable discharge or defense (except as provided in
Section 4.1(b)) including (a) the amending, modifying, supplementing or
terminating (by operation of law or otherwise), expressly or impliedly, of any
Operative Document, or any other instrument applicable to the Lender or to its
Obligations, or any part thereof; (b) any failure on the part of the Lender to
perform or comply with any term of any Operative Document or any failure of any
other Person (other than Xxxxxx Capital and its Affiliates, to the extent such
failure constitutes a defense to performance by the lender under the Standby
Credit Agreement of its obligations thereunder) to perform or comply with any
term of any Operative Document; (c) any waiver, consent, change, extension,
indulgence or other action or any action or inaction under or in respect of any
Operative Document or this Guarantee (except for any written waiver or
modification of the provisions of this Guarantee signed by the parties hereto),
whether or not Xxxxxx Capital, the Lender or the Guarantor has notice or
knowledge of any of the foregoing; (d) any Insolvency or Liquidation Proceeding
or any bankruptcy, insolvency, reorganization, arrangement, readjustment,
composition, liquidation or similar proceeding with respect to the Guarantor or
its properties, or any action taken by any trustee or receiver or by any court
in any such proceeding; (e) any furnishing or acceptance of additional or
substitute security or any release (whether for valuable consideration or
otherwise) of any security (and the Guarantor authorizes Xxxxxx Capital to
furnish, accept or release said security); (f) any limitation on the liability
or Obligations of the Lender under any Operative Document (except as expressly
set forth therein) or any termination (by operation of law or otherwise),
cancellation (by operation of law or otherwise), frustration or
unenforceability, in whole or in part, of any Operative Document, or any term
thereof or Obligation thereunder, except to the extent my such limitation,
termination, cancellation, frustration or unenforceability arises in favor of
the Lender thereunder based on circumstances, conditions or events which would
have limited, terminated, cancelled, frustrated or rendered unenforceable the
obligations of the Guarantor, if the Guarantor had been the lender under the
Standby Credit Agreement; (g) any lien, charge or encumbrance on or affecting
the Guarantor's or the Lender's respective assets and properties; (h) any act,
omission or breach on the part of Xxxxxx Capital or any Assignee under any
Operative Document, or my other agreement at any time existing between Xxxxxx
Capital and the Lender or any other Law or other agreement applicable to Xxxxxx
Capital or any Obligation, except to the extent such act, omission or breach
would have resulted in the limitation or termination of any liability of the
Guarantor if the Guarantor had been the Lender under the Standby Credit
Agreement and/or the Intercreditor Agreement; (i) any claim as a result of any
other dealings among Xxxxxx Capital and the Guarantor, except to the extent such
act, omission or breach would have resulted in the limitation or termination of
any liability of the Guarantor if the Guarantor had been the Lender under the
Standby Credit Agreement and/or the Intercreditor Agreement; (j) the assignment
or transfer of this Guarantee, any Operative Document (in accordance with and
subject to the terms thereof) or any other agreement or instrument referred to
in any Operative Document or applicable to the Lender or the Obligations by
Xxxxxx Capital to any other Person; (k) any change in the name of Xxxxxx
Capital, the Lender or my other Person referred to herein; (l) any merger or
consolidation of the Lender or the Guarantor into or with any other Person or
any sale, lease or transfer of any other assets of the Lender or the Guarantor
to any other Person, whether or not permitted pursuant to the terms of the
Operative Documents; (m) the availability to Xxxxxx Capital of claims against
other parties
with respect to the Obligations (whether or not such parties are then solvent)
or the release of any or all of such claims (whether for valuable consideration
or otherwise); or (n) any change in the ownership of any shares of capital stock
of or other evidences of equity interests in the Guarantor or the Lender
(including any such change which results in the Lender no longer owning capital
stock of, or any such interests in, the Guarantor), whether or not permitted
pursuant to the terms of the Operative Documents; provided, however, that,
notwithstanding the foregoing, this Guarantee shall not constitute a waiver or
release by the Lender or the Guarantor of any claim of the Lender or the
Guarantor which may be asserted against Xxxxxx Capital or any other party in a
separate action or proceeding, or if required by applicable Law as a compulsory
counterclaim in such action.
2.6 WAIVER
The Guarantor unconditionally waives: (a) notice of any of the matters
referred to in Section 2.5 hereof; (b) all notices which may be required by
statute, rule of law or otherwise to preserve any rights against the Guarantor
hereunder, including notice of the acceptance of this Guarantee by Xxxxxx
Capital, or the creation, renewal, extension, modification or accrual of the
Obligations or notice of any other matters relating thereto, any presentment,
demand, notice of dishonor, protest or nonpayment of any damages or other
amounts payable under any Operative Document; (c) any requirement for the
enforcement, assertion or exercise of any right, remedy, power or privilege
under or in respect of any Operative Document, including diligence in collection
or protection of or realization upon the Obligations or any part thereof or any
collateral therefor; (d) any requirement of diligence; (e) any requirement to
mitigate the damages resulting from a default under any Operative Document,
except that this shall not relieve Xxxxxx Capital of any such obligation if and
to the extent required by the terms of the Operative Documents or required by
Law; (f) the occurrence of every other condition precedent to which the
Guarantor or the Lender may otherwise be entitled, except as provided in any
Operative Document; and (g) the right to require Xxxxxx Capital to proceed
against the Lender or any other Person liable on the Obligations, to proceed
against or exhaust security held from the Lender or any other Person, or to
pursue any other remedy in Xxxxxx Capital's power whatsoever, and the Guarantor
waives the right to have the property of the Lender first applied to the
discharge of the Obligations.
Xxxxxx Capital may, at its election, exercise any right or remedy it might
have against the Lender or any security held by Xxxxxx Capital, including the
right to foreclose upon any such security by judicial or nonjudicial sale,
without affecting or impairing in any way the liability of the Guarantor
hereunder, except to the extent the Obligations have been indefeasibly paid or
satisfied, and the Guarantor waives any defense arising out of the absence,
impairment or loss of any right of reimbursement, contribution or subrogation or
any other right or remedy of the Guarantor against the Lender or any such
security, whether resulting from such election by Xxxxxx Capital or otherwise.
Except to the extent provided in the first sentence of Section 2.5 hereof, the
Guarantor waives any defense arising by reason of any disability or other
defense of the Lender (which may nevertheless be asserted in a separate action
or proceeding against Xxxxxx Capital or any other party), or by reason of the
cessation of the liability, either in whole or in part, of the Lender to the
Obligations (other than as a result of payment, performance or affirmative
discharge, release or termination of this Guarantee by Xxxxxx Capital).
2.7 LIMITATIONS ON AMOUNT AND DURATION OF THIS GUARANTEE
Notwithstanding anything herein to the contrary, the Guarantor's total
obligations and liabilities of any nature under this Guarantee shall in no event
exceed thirteen million dollars ($13,000,000) in the aggregate. All obligations
and liabilities of any nature under this Guarantee shall terminate as of the
Termination Date.
2.8 PLEDGE AGREEMENT
This Guarantee is secured by a Pledge Agreement entered into on the date
hereof by Guarantor as pledgor and Xxxxxx Capital as pledgee.
SECTION 3
REPRESENTATIONS & WARRANTIES
The Guarantor represents and warrants to Xxxxxx Capital that the following
statements are true and correct in all material respects:
3.1 CORPORATE EXISTENCE; COMPLIANCE WITH LAW.
The Guarantor (a) has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Nevada, and (b) has
full power, authority and legal right to own and operate its properties and to
conduct its business as presently conducted.
3.2 OWNERSHIP OF GUARANTOR
All of the Guarantor's common stock is owned beneficially and of record by
the Lender or a Subsidiary of Lender.
SECTION 4
MISCELLANEOUS
4.1 PARTIES.
(a) This Guarantee shall inure to the benefit of Xxxxxx Capital and its
successors, assigns or transferees, and shall be binding upon the Guarantor and
its successors and assigns. Except as provided in Section 4.1(b), the Guarantor
may not delegate any of its duties under this Guarantee without the prior
written consent of Xxxxxx Capital. Upon notice to the Guarantor, Xxxxxx Capital
and its successors, assigns and transferees may assign its or their rights and
benefits under this Guarantee to (i) any financial institutions providing
financing to Xxxxxx Capital in connection with the Property or Equipment or any
trustee for such financial institutions, and (ii) any purchaser or transferee of
all or a substantial portion of the rights and
interests of Xxxxxx Capital and its successors, assigns or transferees in and to
the Theatre Properties and Equipment.
(b) If in connection with a Business Sale (i) either (A) the Lender shall
assign to any Person the Lender's obligations under the Standby Credit Agreement
or (B) the Lender shall transfer the capital stock of the Guarantor to any
Person which is not an Affiliate of the Lender (whether by transfer of the stock
of the Guarantor or any Subsidiary of the Lender which owns such stock, by
merger of the Lender or any such Subsidiary of the Lender, or otherwise), and
(ii) a Suitable Replacement either assumes the Lender's obligations under the
Standby Credit Agreement or executes and delivers to Xxxxxx Capital a Guarantee
substantially similar to this Guarantee (subject to such modifications as may be
reasonably acceptable to Xxxxxx Capital), this Guarantee shall be terminated and
the Guarantor shall have no further liability hereunder with respect to
Obligations thereafter arising.
4.2 NOTICES.
All notices, offers, acceptances, approvals, waivers, requests, demands and
other communications hereunder 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
through the 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
clauses (a), (b) or (c) of this Section 4.2. 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 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:
If to Xxxxxx Capital:
Xxxxxx Capital, L.L.C.
000 Xxxxx Xxxxxxxxx Xxxx.
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxx Xxxxx
Telecopier: (000) 000-0000
If to the Guarantor:
Citadel Cinemas, Inc.
c/o Reading International, Inc.
000 Xxxxx Xxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Chief Financial Officer
Telecopier: (000) 000-0000
4.3 REMEDIES.
The Guarantor stipulates that the remedies at law in respect of any default
or threatened default by the Guarantor in the performance of or compliance with
any of the terms of this Guarantee are not and will not be adequate, and that
any of such terms may be specifically enforced by a decree for specific
performance or by an injunction against violation of any such terms or
otherwise, in each case to the same extent as if the Guarantor were the Lender
under the Standby Credit Agreement and/or the Intercreditor Agreement subject to
the proviso in Section 2.1 hereof.
4.4 RIGHT TO DEAL WITH THE LENDER.
At any time and from time to time, without terminating, affecting or
impairing the validity of this Guarantee or the obligations of the Guarantor
hereunder, Xxxxxx Capital may deal with the Lender in the same manner and as
fully and as if this Guarantee did not exist and shall be entitled, among other
things, to grant the Lender, without notice or demand and without affecting the
Guarantor's liability hereunder, such extension or extensions of time to
perform, renew, compromise, accelerate or otherwise change the time for
performance of or otherwise change the terms of performance or any part thereof
contained in or arising under any Operative Document, or to waive any Obligation
of the Lender to perform any act or acts as Xxxxxx Capital may deem advisable.
4.5 SUBROGATION.
The Guarantor will not exercise any rights which it may acquire by way of
subrogation hereunder, by any payment made hereunder or otherwise, until the
Termination Date. If any amount shall be paid to the Guarantor on account of
such subrogation rights at any time prior to the Termination Date, such amount
shall be held in trust for the benefit of Xxxxxx Capital and shall forthwith be
credited and applied upon the Obligations, whether matured or unmatured, in
accordance with the terms of the Operative Documents. If (a) the Guarantor shall
make payment to Xxxxxx Capital or any successor, assignee or transferee of
Xxxxxx Capital of all or any part of the Obligations and (b)the Termination Date
occurs, Xxxxxx Capital or any such successor, assignee or transferee of Xxxxxx
Capital will, at the Guarantor's request and expense, execute and deliver to the
Guarantor appropriate documents necessary to evidence the transfer by
subrogation to the Guarantor of an interest in the Obligations resulting from
such payment by the Guarantor.
4.6 SURVIVAL OF REPRESENTATIONS, WARRANTIES, ETC.
All representations, warranties, covenants and agreements made herein and
in statements or certificates delivered pursuant hereto shall survive any
investigation or inspection made by or on behalf of Xxxxxx Capital and shall
continue in full force and effect until the Termination Date.
4.7 GOVERNING LAW.
THIS GUARANTEE HAS BEEN EXECUTED AND DELIVERED IN THE STATE OF NEW YORK.
THE GUARANTOR AND XXXXXX CAPITAL AGREE THAT, TO THE MAXIMUM EXTENT PERMITTED BY
THE LAWS OF THE STATE OF NEW YORK, THIS GUARANTEE, AND THE RIGHTS AND DUTIES OF
THE GUARANTOR AND XXXXXX CAPITAL HEREUNDER, SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING, WITHOUT
LIMITATION, SECTIONS 51401 AND 51402 OF THE NEW YORK GENERAL OBLIGATIONS LAW) IN
ALL RESPECTS, IN RESPECT OF ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE.
4.8 CONSENT TO JURISDICTION.
THE GUARANTOR HEREBY IRREVOCABLY SUBMITS, FOR ITSELF AND ITS PROPERTIES,
THE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT
OF NEW YORK AND THE SUPREME COURT OF THE STATE OF NEW YORK IN THE COUNTY OF NEW
YORK IN ANY ACTION, SUIT OR PROCEEDING BROUGHT AGAINST IT AND RELATED TO OR IN
CONNECTION WITH THIS GUARANTEE, AND TO THE EXTENT PRMITTED BY APPLICABLE LAW,
THE GUARANTOR HEREBY WAIVES AND AGREES NOT TO ASSERT BY WAY OF MOTION, AS A
DEFENSE OR OTHERWISE IN ANY SUCH SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT
IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURT, THAT THE SUIT,
ACTINO OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE OF THE
SUIT, ACTION OR PROCEEDING IS IMPROPER, OR THAT THIS GUARANTEE OR THE SUBJECT
MATTER HEREOF MAY NOT BE LITIGATED IN OR BY SUCH COURT. THIS SUBMISSION TO
JURISDICTION IS NONEXCLUSIVE AND DOES NOT PRECLUDE XXXXXX CAPITAL OR ANY
ASSIGNEE FROM OBTAINING JURISDICTION OVER THE GUARANTOR IN ANY COURT OTHERWISE
HAVING JURISDICTION.
4.9 WAIVER OF JURY TRIAL.
TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE GUARANTOR AGREES NOT TO SEEK
AND HEREBY WAIVES THE RIGHT TO ANY REVIEW OF THE JUDGMENT OF ANY SUCH COURT BY
ANY COURT OF ANY OTHER NATION OR JURISDICTION WHICH MAY BE CALLED UPON TO GRANT
AN ENFORCEMENT OF SUCH JUDGMENT. THE GUARANTOR AGREES THAT SERVICE OF PROCESS
MAY BE MADE UPON IT BY CERTIFIED OR REGISTERED MAIL TO THE ADDRESS FOR NOTICES
SET FORTH IN THIS GUARANTEE OR ANY METHOD AUTHORIZED BY THE LAWS OF NEW YORK.
THE GUARANTOR AND XXXXXX CAPITAL EXPRESSLY WAIVE ALL RIGHT TO TRIAL BY JURY
IN ANY ACTION, PROCEEDING OR COUNTERCLAIM RELATED TO THIS GUARANTEE. THE
GUARANTOR AND XXXXXX CAPITAL ACKNOWLEDGE THAT THE PROVISIONS OF SECTIONS 4.7,
4.8 AND 4.9 HAVE
BEEN BARGAINED FOR AND THAT THEY HAVE BEEN REPRESENTED BY COUNSEL IN CONNECTION
THEREWITH.
4.10 SEVERABILITY.
If any term of this Guarantee or any application thereof shall be invalid
or unenforceable, the remainder of this Guarantee and any other application of
such term shall not be affected thereby. Any term of this Guarantee may be
amended, modified, waived, discharged or terminated only by an instrument in
writing signed by the Guarantor and Xxxxxx Capital.
4.11 COUNTERPARTS.
This Guarantee may be executed in any number of counterparts, each of which
shall be an original, but all of which together shall constitute one instrument.
4.12 NO WAIVER.
No delay on the part of Xxxxxx Capital in exercising any power or right
hereunder or under any Operative Document shall operate as a waiver thereof; nor
shall any single or partial exercise of any power or right hereunder or the
failure to exercise same in any instance preclude other or further exercise
thereof or the exercise of any other power or right; nor shall Xxxxxx Capital be
liable for exercising or failing to exercise any such power or right; the rights
and remedies hereunder expressly specified are cumulative and not exclusive of
any rights or remedies which Xxxxxx Capital may or will otherwise have. The
Guarantor hereby agrees and acknowledges that to the extent in any instance
claims under this Guarantee consist of claims for the payment of money only,
Xxxxxx Capital, at its sold option, shall have the right to bring a motion or
proceeding under New York State Civil Practice Law and Rules Section 3213.
4.13 LIMITATIONS.
In no event shall the Guarantor have any liability to Xxxxxx Capital
hereunder for any lost or prospective profits or any other special, punitive,
exemplary, consequential, incidental or indirect losses or damages (in tort,
contract or otherwise).
[Signature page follows]
IN WITNESS WHEREOF, the undersigned have caused this Guarantee to be
executed and delivered as of the day and year first above written.
GUARANTOR
CITADEL CINEMAS, INC.
By: ________________________________
Name: _________________________
Title: _________________________
Acknowledged and Agreed:
XXXXXX CAPITAL
XXXXXX HILL CAPITAL, L.L.C.
By: ________________________________
Name: _________________________
Title: _________________________
EXHIBIT A
DEFINED TERMS
"Affiliate" of any Person means any other Person controlling, controlled by
or under direct or indirect common control with such Person. For the purposes of
this definition, "control," when used with respect to any specified Person,
means the power to direct the management and policies of such Person, directly
or indirectly, whether through the ownership of voting securities, by contract
or otherwise; and the terms "controlling" and "controlled" have the meanings
correlative to the foregoing. Notwithstanding the foregoing: (a) Xxxxxx Capital
and its Affiliates (the "Xxxxxx Capital's Affiliates") shall not include the
Guarantor and Lender and its Subsidiaries; and (b) the Guarantor and Lender and
its Subsidiaries (including the Guarantor), on the one hand, and Xxxxxx Capital
and Xxxxxx Capital's Affiliates, on the other hand, shall not be considered
Affiliates of each other.
"Business Sale" has the meaning set forth in the Operating Lease.
"Insolvency or Liquidation Proceeding" means:
(a) The entry of a decree or order for relief in respect of the
Lender by a court having jurisdiction in the premises, or the appointment
of a receiver, liquidator, assignee, custodian, trustee, sequestrator (or
other similar official) of the Lender 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 the Lender of
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
(b) The commencement by the Lender 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 any 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 the Lender 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.
"Intercreditor Agreement" means the Amended and Restated Intercreditor
Agreement dated as of July 28, 2000 as amended and restated as of January 29,
2002 as further amended and restated as of even date herewith between Xxxxxx
Xxxx Capital, Reading International, Inc. and Nationwide Theatres Corp., as the
same may be amended, restated, modified, or supplemented from time to time.
A-1
"Law" shall mean any law (including, without limitation, any environmental
Law), treaty, statute, rule, regulation, ordinance, order, directive, code,
interpretation, judgment, decree, injunction, writ, determination, award,
permit, license, authorization, direction, requirement or decision of or
agreement with or by any governmental or governmental department, commission,
board, court, authority, agency, official or officer having jurisdiction of the
matter in question.
"Lender" means Reading International, Inc. in its capacity as Lender under
the Standby Credit Agreement, and in its capacity as a party to the
Intercreditor Agreement, and, in each case, its successors and assigns.
"Mortgage" means that certain first mortgage of even date herewith securing
the Note.
"Note" means that certain purchase money promissory note of even date
herewith between Purchaser as payor and Guarantor as payee.
"Obligations" means all obligations, covenants, and undertakings of Reading
International, Inc. contained in the Operative Documents.
"Omnibus Agreement" means that certain Omnibus Amendment Agreement dated as
of even date herewith by and among Lender, Guarantor, Xxxxxx Capital, Xxxxxx
Xxxx Associates and Nationwide Theater Corp.
"Operating Lease" means the Amended and Restated Operating Lease Agreement
dated as of July 28, 2000 as amended and restated as of January 29, 2002 and as
further amended and restated as of even date herewith between Xxxxxx Hill
Capital, L.L.C., as Lessor, and Citadel Cinemas, Inc., as Lessee, as the same
may be amended, restated, modified or supplemented from time to time.
"Operative Documents" means the Standby Credit Agreement and each
agreement, certificate or instrument delivered by the Lender pursuant to the
terms of the Standby Credit Agreement, the Intercreditor Agreement and each
agreement, certificate or instrument delivered by the Lender pursuant to the
terms of the Intercreditor Agreement.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, limited liability company,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.
"Purchaser" means collectively 000-000 Xxxx 00xx Xxxxxx Associates, LLC,
its successors and assigns, including any title holding nominee that it may
designate to hold title to the Xxxxxx Property (as such term is defined in the
Omnibus Agreement).
A-2
"Standby Credit Agreement" means the Amended and Restated Standby Credit
Agreement dated as of July 28, 2000, as amended and restated as of January 29,
2002, as further amended and restated as of even date herewith between Xxxxxx
Hill Capital, L.L.C. as Borrower and Reading International, Inc. as Lender, as
the same may be amended, restated, modified or supplemented from time to time.
"Subsidiary" of any Person means any corporation, partnership, limited
liability company, joint venture, trust or estate of which (or in which) more
than 50% of:
(a) the outstanding capital stock having voting power to elect a
majority of the board of directors of such corporation
(irrespective of whether at the time capital stock of any
other class or classes of such corporation shall or might
have voting power upon the occurrence of any contingency);
(b) the interest in the capital or profits of such partnership
or joint venture; or
(c) the beneficial interest of such trust or estate
is at the time directly or indirectly owned by such Person, by such Person and
one or more of its Subsidiaries or by one or more of such Person's Subsidiaries.
"Suitable Replacement" has the meaning set forth in the Operating Lease.
"Termination Date" has the meaning set forth in the Omnibus Agreement.
X-0
Xxxxxxxxxx 0
XXXXXX XXXXXXXXX
THE PLEDGE AGREEMENT, dated as of this ____ day of October, 2003 (as
amended, modified and supplemented from time to time, this "Agreement"), is
entered into by and between CITADEL CINEMAS, INC, a Nevada corporation (the
"Pledgor"), and XXXXXX XXXX CAPITAL, L.L.C., a New York limited liability
company (together with its permitted successors and assigns, the "Pledgee").
WITNESSETH:
WHEREAS, the Pledgor wishes to induce the Pledgee to enter into a new
amendment and restatement of a certain Master Lease (as defined below) with the
Pledgor and to enter into certain related transactions, including the transfer
of its interest in the Xxxxxx Property, as hereinbelow defined; and
WHEREAS, the Pledgee is unwilling to enter into the amendment and
restatement of the Master Lease and the related transactions unless the Pledgor
enters into a Guarantee (as defined below) and enters into this Agreement to
secure Pledgor's obligations under the Guarantee;
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 Standby Credit Agreement (as defined below) and used herein are so used
as so defined, and the following terms shall have the following meanings:
"Ancillary Security Documents" shall mean all such further documentation,
including, without limitation, any guarantees, guaranteeing the performance by
the Purchaser of its obligations under the Notes and/or the Mortgage and any
security agreements securing the performance of the guarantor under any one or
more such guarantees.
"Citadel Reinvestment Option" means Citadel's right under the Purchase and
Sale Agreement to acquire an equity interest in 000-000 Xxxx 00xx Xxxxxx
Associates, LLC (referred to herein collectively with a title holding nominee
that it may designate to hold title to the Xxxxxx Property, as the "Purchaser").
"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.
"Credit Bid Amount" shall mean the aggregate amount of (i) the outstanding
principal balance of the Notes, (ii) all accrued and unpaid interest and late
fees due under the Notes, (iii) all costs incurred by Pledgee in connection with
the collection and enforcement of the Notes and the Mortgage and Ancillary
Security Documents, together with any sums advanced by the Pledgee to protect
the security of the Mortgage and/or any one or more of the Ancillary Security
Documents, (iv) all amounts advanced by the Pledgor to protect the security of
the Mortgage and/or any one or more of the Ancillary Security Documents, and (v)
all costs incurred by Pledgor in connection with the exercise of the secured
party's rights under the Ancillary Security Documents.
"Event of Default" shall mean the occurrence of any of the following
events: (1) an Event of Default (as defined in the Standby Credit Agreement),
(2) a default on the part of Pledgor under the Guarantee, or (3) 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 under clauses
(2) or (3) 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.
"Guarantee" shall mean the Guarantee from Pledgor to Pledgee entered into
as of the date hereof of the obligations of Reading International, Inc., as
lender under a certain Standby Credit Agreement to Pledgee as borrower and/or as
a party to the Intercreditor Agreement ("Lender").
"In Lieu Note" shall mean that certain promissory note of even date
herewith in the amount of $650,000, issued by the Purchaser to Pledgor and
secured by the Mortgage.
"Intercreditor Agreement" shall mean that certain amended and restated
intercreditor agreement dated as of July 28, 2000, as amended and restated as of
January 29, 2002 and as of even date herewith by and among Reading
International, Inc., Nationwide Theatres, Inc. and Pledgee, as the same may be
amended, modified and supplemented from time to time.
"Master Lease" shall mean the Master Lease Agreement between Pledgee, as
lessor, and Pledgor, as lessee, dated as of July 28, 2000, as amended and
restated as of January 29, 2002 and as of even date herewith, as the same may be
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).
"Mortgage" shall mean that certain first mortgage of even date herewith
securing the Notes.
"Notes" shall mean, collectively and without differentiation, the Purchase
Money Promissory Note and the In Lieu Note.
"Obligations" shall mean any and all indebtedness, debts, obligations, and
liabilities of the Pledgor to the Pledgee from time to time outstanding under
the Operative Documents, 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 Operative
Documents.
"Omnibus Amendment Agreement" shall mean that certain agreement dated as of
even date herewith by and among Pledgee, Pledgor, Lender, Xxxxxx Hill Associates
(the parent of Xxxxxx Capital), and Nationwide Theaters Corp.
"Operative Documents" shall mean the Guarantee and any documents securing
the performance of the Guarantee.
"Pledgor Permitted Liens" shall mean (i) any rights held by the Purchaser
to offset against its obligation under the Purchase Money Note the exercise
price in the event that Pledgor elects to exercise the Citadel Reinvestment
Option and (ii) any liens placed upon or any claims made against the Collateral,
or any part or portion thereof, to the extent that such liens or claims are
approved by the Pledgee and/or the result of the acts or omissions of the
Pledgee.
"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 interest and principal payments under the Notes, subject
to the provisions of Sections 4(e) and 7.
"Purchase Money Promissory Note" shall mean that certain purchase money
promissory note of even date herewith in the amount of $13,000,000 issued by the
Purchaser to Pledgor and secured by the Mortgage.
"Purchase and Sale Agreement" means that certain purchase and sale
agreement dated of even date herewith between Pledgor and Purchaser, pertaining
to the sale of that certain real and personal property located at 000-000 Xxxx
00xx Xxxxxx and 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, commonly known as the
"Xxxxxx Cinema" and the associated Wendy's restaurant.
"Standby Credit Agreement" shall mean the Amended and Restated Standby
Credit Agreement dated as of July 28, 2000, as amended and restated as of
January 29, 2002, and as of even date herewith between Pledgee as borrower and
Reading International, Inc. as lender, as the same may be amended, modified and
supplemented from time to time.
"Xxxxxx Property" means the real and personal property subject to the
Purchase and Sale Agreement.
"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.
"Termination Date" has the meaning set forth in the Omnibus Agreement.
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 continuing security interest 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) the Notes;
b) the Mortgage;
c) the Ancillary Security Documents; and
d) all Proceeds of any and all of the foregoing (including, without
limitation, (i) all proceeds from and payments on the Notes, (ii) all
benefits and proceeds of and from any related policy of title insurance and
hazard insurance, (iii) all benefits and proceeds of and from any
condemnation proceedings concerning the Xxxxxx Property, (iv) all rights
and benefits in and under the Notes, the Mortgage and the Ancillary
Security Documents, which the Pledgor now has or may at anytime hereafter
have, and (v) the Xxxxxx Property, to the extent that Pledgee or Pledgor
exercises their respective rights under the Notes, Mortgage and/or any one
or more of the Ancillary Security Documents (and/or accepts a deed in lieu
of foreclosure) and acquires title to such property..
This Agreement shall create a continuing security interest in the
Collateral which shall remain in effect until the Termination Date.
SECTION 3. Certain Covenants Of Pledgor. Concurrently with the closing of
the transaction governed by the Purchase and Sale Agreement, Pledgor shall do
each of the following:
a) execute and deliver to Pledgee an Assignment of the Mortgage in
the form attached hereto as Exhibit "A" (the "Assignment");
b) deliver to Pledgee the original of the Notes, endorsed in blank;
c) deliver to the Pledgee the original of the Ancillary Security
Documents, endorsed in such form as may be reasonably required by the
Pledgee in order to perfect its security interest in such Ancillary
Security Documents and/or to facilitate the exercise by the Pledgee of its
rights under this Agreement;
d) notify the maker/mortgagee under the Notes and the Mortgage (the
"Obligor") in writing of this Agreement with instructions that all payments
under or pursuant to the Note are to be made directly to Pledgee at
Pledgee's address set forth in Section 9, below;
e) procure an ALTA lender's policy of title insurance with form 100
endorsement insuring Pledgor in the amount of the principal balance of the
Notes that the Mortgage is a valid lien and charge on the Xxxxxx Property,
subject only to title matters approved in writing by Pledgee (the "Title
Policy) and deliver the original of such policy, together with an
endorsement insuring Pledgee (such endorsement to be acquired at Pledgee's
cost) that, by valid assignment, the mortgagee's interest in the Mortgage
has been assigned to Pledgee; and
f) provide Pledgee with such other documentation and information as
Pledgee may reasonably request.
SECTION 4. Further Assurances; Affirmative Covenants.
The Pledgor covenants and agrees that, from and after the date of this
Agreement until the Termination Date:
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, Pledgor Permitted Liens, Liens for Taxes and
governmental charges and levies which are not delinquent, which are being
contested by or on behalf of the Pledgor or which are the obligation of
Pledgee or any of its Affiliates to pay pursuant to any agreements and
Liens placed on the Collateral by, or arising from, the actions or
inactions of, or any event or condition relating to, Pledgee or any of its
Affiliates, whether or not such Liens are permitted to exist pursuant to
the terms of any 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 or pursuant to the terms of
this Agreement.
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 any such persons who are making such claims in their
capacity as claimants against and/or creditors of the Pledgee.
e) Notwithstanding anything in this Pledge Agreement to the
contrary, at the election of Pledgor, up to five million dollars
($5,000,000) of the Proceeds of the Purchase Money Promissory Note and/or
the Mortgage shall be used to fund the exercise price of the Citadel
Reinvestment Option and in such event shall be released as Collateral
automatically. Pledgee will execute and deliver proper instruments
acknowledging such release and authorizes Pledgor to file amendments to any
financing statements reflecting such release. In the event of any such
release, the equity interest acquired by the Pledgor will be treated as
proceeds from the Collateral, and any certificate or documentation
evidencing Pledgor's interest in the Purchaser will be promptly delivered
to Pledgee, together with such stock powers or transfer documents, executed
in blank, as the Pledgee may reasonably request in order to perfect and/or
to facilitate the enforcement of the security interest granted to it by
this Agreement.
f) Pledgee will be responsible for all transfer and filing fees and
taxes, if any, related to the granting and perfection of the security
interests granted by this Agreement.
SECTION 5. Pledgee's Right to Assign Collateral in Lieu of Performance. In
the event that the Lender is in breach of its obligations under the Standby Line
of Credit, Pledgor shall have the option, exercisable within five (5) business
days to assign to Pledgee its entire ownership interest in the Purchase Money
Promissory Note (and, if not previously satisfied as contemplated by Section 7,
below, in the In Lieu Note), the Mortgage and the Ancillary Security Documents
free and clear of all liens and other claims (other than the rights of Xxxxxx
Capital created by this Agreement and/or any Pledgor Permitted Lien). If Pledgor
does so in a timely manner, then Pledgor shall be relieved of further
obligations accruing under the Guarantee and this Agreement.
SECTION 6. Remedies.
(a) Upon the occurrence of an Event of Default, 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 xxxxx xxxx 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; provided however that in any private or
public sale, the Pledgee agrees to make a bid in the amount of the Credit Bid
Amount. 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 therefore, and such sale may, without further notice, be made at
the time and place to which it was adjourned. The Pledgor 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 and/or the Pledgor in
connection therewith (provided that the reimbursement of Pledgee's
costs and expenses shall take priority over the reimbursement of the
Pledgor's costs and expenses);
ii. SECOND, to the Pledgor in an amount equal to any and all
interest and late fees accrued under the Purchase Money Promissory
Note;
iii. THIRD, to fund the obligations of the Lender under the
Standby Credit Facility; 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.
The amount distributed to Pledgee pursuant to item (iii), above, shall
constitute a Loan made by the Lender under, and pursuant to, the Standby
Credit Agreement.
(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.
(e) In the event that Pledgee becomes the owner of the Purchase Money
Promissory Note (and, if not previously satisfied as contemplated by Section 7,
below, the In Lieu Note), the Mortgage and the Ancillary Security Documents
following a private sale or otherwise, and provided that Pledgor reimburses
Pledgee all of the costs and expenses incurred by Pledgee in conducting such
private sale, Pledgee agrees to use reasonable good faith efforts thereafter to
initiate and pursue, in consultation and cooperation with Pledgor, foreclosure
proceedings pursuant to the terms of the Mortgage. At the foreclosure, Pledgee
shall make a credit bid in the amount of the Credit Bid Amount. Pledgee also
agrees to use reasonable good faith efforts, again in consultation and
cooperation with Pledgor, to exercise its rights under the Ancillary Security
Documents, provided that Pledgor shall be responsible for advancing the costs
thereof, which costs shall, to the extent permitted by the Notes, the Mortgage
and/or the Ancillary
Security Documents, be added to the indebtedness evidenced or secured thereby.
After such foreclosure, Pledgee agrees to take the following actions:
i) If Pledgee's bid is the high bid at the foreclosure sale (or,
alternatively, if Pledgee elects, in Pledgee's sole and absolute
discretion, but with Pledgor's consent, such consent not to be unreasonably
withheld or delayed, accepts a deed to the Xxxxxx Property in lieu of
foreclosure), the Master Lease shall be deemed to have been automatically
amended to restore the Xxxxxx Property to the Master Lease as provided in
the Omnibus Agreement.
ii) If Pledgee is not the successful bidder, Pledgee shall disburse
the proceeds from the foreclosure as follows: (A) first, to Pledgee in an
amount equal to the costs incurred by Pledgee in connection with the
collection and enforcement of the Notes, the Mortgage and/or the Ancillary
Security Documents, together with any sums advanced by Pledgee to protect
the security of the Mortgage, (B) second, to Pledgor in an amount equal to
the costs incurred by Pledgor in connection with the collection and
enforcement of the Notes, the Mortgage and/or the Ancillary Security
Documents, together with any sums advanced by Pledgor to protect the
security of the Mortgage, (C) third, to Pledgor in an amount equal to the
accrued interest and/or late fees on the Purchase Money Note, (D) fourth,
to Pledgee in an amount equal to the unpaid principal under the Purchase
Money Note, and (E) fifth, to Pledgor in an amount equal to the unpaid
principal and interest under the In Lieu Note. The amount distributed to
Pledgee pursuant to item (D), above, shall constitute a Loan made by the
Lender under, and pursuant to, the Standby Credit Agreement.
Except as expressly set forth above, Pledgee shall have no obligation to
take any action with respect to the Notes, the Mortgage or the Ancillary
Security Documents and shall incur no liability for any failure to take any such
action.
SECTION 7. Payments under Notes and Mortgage. Pledgee shall receive all
payments made by the maker of the Notes as additional collateral under this
Agreement, subject to the following:
a) Provided Pledgor is not in default under the terms of the
Guaranty, Pledge will, upon the request of Pledgor in the form of a
declaration that it intends to promptly surrender such In Lieu Note to the
maker thereof for payment, promptly release and reassign to the Pledgor the
In Lieu Promissory Note so that the same may be so tendered for payment by
the Pledgee, and any payments of interest on the Purchase Money Note and
any payment of interest, late fees and/or principal on the In Lieu Note
shall be remitted to Pledgor promptly following receipt by Pledgee and will
not be treated as Proceeds or Collateral under this Agreement;
b) Payments in reimbursement for sums advanced by Pledgor or Pledgee
to protect the security of the Mortgage, shall be remitted to, or retained
by, the party who advanced such sums, as appropriate, it being understood
that the first dollars paid by the maker of the Purchase Money Note shall,
in the event of advances make by both Pledgor and Pledgee shall be in
reimbursement of the amounts advanced by Pledgee; and
c) Payments of principal on the Purchase Money Note may, in the
Pledgee's discretion, be retained by Pledgee as Proceeds for purposes of
securing the obligation of the Lender to make advances under the Standby
Credit Agreement.
SECTION 8. Pledgee Appointed Attorney-in-Fact.
Upon the occurrence and during the continuance of an Event of Default which
is not waived by the Pledgee, 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 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, 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 9. Pledgee May Perform. If the Pledgor fails to perform any
agreement, 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 9 shall be added to the Obligations and secured by the Collateral.
SECTION 10. 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 and the Pledgee, and then such amendment, waiver, modification or
consent shall be effective only in the specific instance for the specific
purpose for which given.
SECTION 11. 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 Termination Date, (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 12. Notices. All notices, offers, acceptances, approvals, waivers,
requests, demands and other communication hereunder or under any Operative
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 12. All notices
shall be effective upon delivery to 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 Pledgor:
Citadel Cinemas, Inc.
c/o 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
4.14 XXX XXXXXXX, XX 00000
Telecopier No. (000) 000-0000
(b) If to the Pledgee:
Xxxxxx Xxxx Capital, L.L.C.
000 Xxxxx Xxxxxxxxx Xxxx.
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Legal Department
Telecopier: (000) 000-0000
with required copies to:
4.14.1.1.1. Xxx Xxxxx
Pacific Theatres
000 Xxxxx Xxxxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, XX 00000
Telecopier: (000) 000-0000
Each such notice, request or other communication shall be effective when
actually received.
SECTION 13. Governing Law. THIS AGREEMENT HAS BEEN DELIVERED AT, AND SHALL
BE EFFECTIVE WHEN EXECUTED BY THE PLEDGOR AND THE PLEDGEE 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 14. 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 15. 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 16. Benefits. The rights and privileges of the Pledgee hereunder
shall inure to the benefit of its successors and assigns and the obligations of
the Pledgor shall be binding on the Pledgor's successors and assigns.
SECTION 17. 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 18. 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 19. 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 PLEDGOR ACKNOWLEDGES
THAT THE PROVISIONS OF THIS SECTION 18 HAVE BEEN BARGAINED FOR AND THAT IT HAS
BEEN REPRESENTED BY COUNSEL IN CONNECTION HEREWITH.
SECTION 20. Termination. Upon the Termination Date, this Agreement shall
terminate and the Pledgee at the request of the Pledgor will execute and deliver
to the Pledgor a proper instrument or instruments acknowledging the satisfaction
and termination of this Agreement, and will duly assign, transfer and deliver to
the Pledgor such of the Collateral as may be in the possession of the Pledgee
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 Pledgee.
Pledgee authorizes Pledgor to file termination statements in connection with
such termination.
SECTION 21. Limited Recourse. No recourse for the payment of the principal
of, or interest on, the Obligations or obligations of the Pledgor 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 partner or owner of the Pledgor or any incorporator, partner,
shareholder, officer, member, Affiliate or director, as such, past, present or
future, of any such direct or indirect partner. Nothing contained in this
Section 21 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. In no event shall the Pledgor have any liability to the
Pledgee hereunder for any lost or prospective profits or any other special,
punitive, exemplary, consequential, incidental or indirect
losses or damages (in tort, contract or otherwise). The parties further agree
that no claim for direct damages by a party hereunder shall include any amounts
for which such party has been reimbursed or is entitled to be reimbursed under
any insurance required to be obtained under the Master Lease or acquired in
connection therewith.
SECTION 22. Cumulative Rights; No Waiver. No failure on the part of the
Pledgee to exercise, no course of dealing with respect to, and no delay on the
part of the Pledgee 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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
PLEDGOR:
CITADEL CINEMAS, INC.
By:____________________________________
Name:
Title:
PLEDGEE:
XXXXXX XXXX CAPITAL, L.L.C.
By:___________________________________
Name:
Title:
