EXHIBIT 2.2
EXECUTION COPY
CINEMARK, INC.
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "AGREEMENT") is made as of March
12, 2004, among Cinemark, Inc., a Delaware corporation (the "COMPANY"), the
Persons listed on the Schedule of Purchasers attached hereto (collectively
referred to herein as the "PURCHASERS" and individually as a "PURCHASER").
Except as otherwise indicated herein, capitalized terms used herein are defined
in Section 6 hereof.
The parties hereto agree as follows:
Section 1. Authorization and Closing.
(a) Authorization of the Securities. The Company shall
authorize the issuance to the Purchasers shares of its Class A Common Stock, par
value $.01 per share (the "CLASS A COMMON STOCK").
(b) Purchase of Securities. At the Closing (as defined in
Section 1(c) below), the Company shall sell to each Purchaser and, subject to
the terms and conditions set forth herein, each Purchaser shall purchase from
the Company the number of shares of Class A Common Stock set forth opposite such
Purchaser's name on the Schedule of Purchasers attached hereto at a price per
share equal to the Merger Consideration (as such term is defined in the Merger
Agreement).
(c) The Closing. The closing of the separate purchases and
sales hereunder (the "CLOSING") shall take place at the offices of Akin Gump
Xxxxxxx Xxxxx & Xxxx LLP in Dallas, Texas, contemporaneously with the closing of
the merger (the "MERGER") under the Agreement and Plan of Merger, dated as of
the date hereof, between the Company and Popcorn Merger Corp. (the "MERGER
AGREEMENT"). At the Closing, the Company shall deliver to each Purchaser stock
certificates evidencing the Class A Common Stock to be purchased by such
Purchaser, each registered in such Purchaser's or its nominee's name, upon
payment of the purchase price thereof by wire transfer of immediately available
funds to such account as designated by the Company prior to the Closing, in the
amount set forth opposite such Purchaser's name on the Schedule of Purchasers.
(d) Closing Fee. At the Closing, the Company shall pay Madison
Dearborn Capital Partners IV, L.P. ("MDCP") a closing fee in the amount of
$12,500,000 by wire transfer of immediately available funds to a bank account
designated by MDCP to the Company.
Section 2. Conditions of Each Purchaser's Obligation at the Closing.
The obligation of each Purchaser to purchase and pay for the Class A Common
Stock at the Closing is subject to the satisfaction as of the Closing of the
following conditions:
(a) Representations and Warranties; Covenants. The
representations and warranties contained in Section 4 hereof shall be true and
correct in all material respects at and as of the Closing as though then made,
except to the extent of changes caused by the transactions
expressly contemplated herein, and the Company shall have performed in all
material respects all of the covenants required to be performed by it hereunder
prior to the Closing.
(b) Merger Agreement. The Merger Agreement shall be in full
force and effect as of the Closing, and the closing contemplated by the Merger
Agreement shall have been completed simultaneously in accordance with the terms
of the Merger Agreement.
(c) Closing Documents. The Company shall have delivered to
each Purchaser all of the following documents:
(i) an Officer's Certificate, dated the date of the
Closing, stating that the conditions specified in Section 1 and
Sections 2(a) and 2(b), inclusive, have been fully satisfied;
(ii) certified copies of the resolutions duly adopted
by the Company's board of directors authorizing the execution, delivery
and performance of this Agreement, the Merger Agreement and the other
agreements contemplated in connection therewith (collectively, the
"TRANSACTION DOCUMENTS"), the issuance and sale of the Class A Common
Stock, and the consummation of the transactions contemplated by this
Agreement; and
(iii) certified copies of the Company's Certificate
of Incorporation and Bylaws, each as in effect at the Closing.
(d) Waiver. Any condition specified in this Section 2 may be
waived if consented to by each Purchaser.
Section 3. Transfer of Restricted Securities.
(a) Restricted Securities are transferable only pursuant to
(i) public offerings registered under the Securities Act, (ii) Rule 144 of the
Securities and Exchange Commission (or any similar rule or rules then in force)
if such rule is available, (iii) the applicable terms and conditions of the
Stockholders Agreement, and (iv) subject to the conditions specified below, any
other legally available means of transfer.
(b) In connection with the transfer of any Restricted
Securities (other than a transfer described in Section 4(a)(i) or (ii) above),
the holder thereof shall deliver written notice to the Company describing in
reasonable detail the transfer or proposed transfer, together with an opinion of
counsel which (to the Company's reasonable satisfaction) is knowledgeable in
securities law matters to the effect that such transfer of Restricted Securities
may be effected without registration of such Restricted Securities under the
Securities Act. In addition, if the holder of the Restricted Securities delivers
to the Company an opinion of counsel which (to the Company's reasonable
satisfaction) is knowledgeable in securities law matters that no subsequent
transfer of such Restricted Securities shall require registration under the
Securities Act, the Company shall promptly upon such contemplated transfer
deliver new certificates for such Restricted Securities which do not bear the
Securities Act legend set forth in Section 7(f). If the Company is not required
to deliver new certificates for such Restricted Securities not bearing such
legend, the holder thereof shall not transfer the same until the prospective
transferee
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has confirmed to the Company in writing its agreement to be bound by the
conditions contained in this Section 3 and Section 7(f).
Section 4. Representations and Warranties of the Company. As a material
inducement to the Purchasers to enter into this Agreement and acquire shares of
Class A Common Stock hereunder, the Company hereby represents and warrants that:
(a) Organization and Corporate Power. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of Delaware and is qualified to do business in every jurisdiction in which its
ownership of property or conduct of business requires it to qualify. The Company
has all requisite corporate power and authority and all material licenses,
permits and authorizations necessary to own and operate its properties, to carry
on its businesses as now conducted and presently proposed to be conducted and to
carry out the transactions contemplated by this Agreement.
(b) Capital Stock and Related Matters. As of the Closing after
giving effect to the Merger, the authorized capital stock of the Company shall
consist of 40,000,000 shares of Class A Common Stock, of which approximately
27,720,000 shares shall be issued and outstanding, and approximately 3,080,000
shares shall be reserved for issuance upon exercise of stock options under the
stock option plan to be authorized by the Board. As of the Closing, the Company
shall not have outstanding any stock or securities convertible or exchangeable
for any shares of its capital stock, nor shall it have outstanding any rights or
options to subscribe for or to purchase its capital stock or any stock or
securities convertible into or exchangeable for its capital stock, except for
the employee stock options to be granted pursuant to the terms of the Executive
Employment Agreements and the Brazilian Put Agreements. As of the Closing, the
Company shall not be subject to any obligation (contingent or otherwise) to
repurchase or otherwise acquire or retire any shares of its capital stock or any
warrants, options or other rights to acquire its capital stock. As of the
Closing, all of the outstanding shares of the Company's capital stock shall be
validly issued, fully paid and nonassessable.
(c) Authorization; No Breach. The execution, delivery and
performance of the Transaction Documents to which the Company is a party have
been duly authorized by the Company. Each of the Transaction Documents to which
the Company is a party constitutes a valid and binding obligation of the
Company, enforceable in accordance with its terms. The execution and delivery by
the Company of each of the Transaction Documents to which the Company is a
party, the offering, sale and issuance of the Class A Common Stock hereunder and
the fulfillment of and compliance with the respective terms hereof and thereof
by the Company, do not (i) conflict with or result in a material breach or
violation of, or (ii) require any material authorization, consent, approval,
exemption or other action by or notice to any court or administrative or
governmental body pursuant to, any material law, statute, rule or regulation to
which the Company is subject or any material agreement, instrument, order,
judgment or decree to which the Company is subject, except as disclosed in the
Merger Agreement.
Section 5. Effective Date. This Agreement shall become effective
automatically without any further actions by any of the parties hereto
simultaneously with the closing of the Merger under the Merger Agreement.
However, prior thereto, this Agreement shall terminate
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and become null and void automatically without further actions by any of the
parties hereto immediately upon the termination of the Merger Agreement pursuant
to its terms.
Section 6. Definitions. For the purposes of this Agreement, the
following terms have the meanings set forth below:
"AFFILIATE" means any Person which directly or indirectly
controls, is controlled by or is under common control with another
Person and Persons which have received distributions of securities from
a partnership holding such securities or in the case of any Investor
that is a trust, any beneficiary trust for the benefit of the
beneficiary or successor trust.
"BOARD" means the Company's board of directors.
"CLASS A COMMON STOCK" has the meaning set forth in Section
1(a).
"CLOSING" has the meaning set forth in Section 1(c).
"EXECUTIVE EMPLOYMENT AGREEMENTS" means each of the Employment
Agreements, dated as of the date hereof, between the Company and each
of Xxxx Xxxxx, Xxxxxx Xxxxxx, Xxxxxxx Xxxxxx and Xxxxxxx Xxxxxxxx.
"MDCP" has the meaning set forth in Section 1(d).
"MERGER" has the meaning set forth in Section 1(c).
"MERGER AGREEMENT" has the meaning set forth in Section 1(c).
"PERSON" means an individual, a partnership, a corporation, an
association, a joint stock company, limited liability company, a trust,
a joint venture, an unincorporated organization or a governmental
entity or any department, agency or political subdivision thereof.
"RESTRICTED SECURITIES" means (i) the Class A Common Stock
issued hereunder and (ii) any securities issued with respect to the
Class A Common Stock referred to in clause (i) above by way of a stock
dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization. As to
any particular Restricted Securities, such securities shall cease to be
Restricted Securities when they have (i) been effectively registered
under the Securities Act and disposed of in accordance with the
registration statement covering them, (ii) become eligible for sale
pursuant to Rule 144(k) (or any similar provision then in force) under
the Securities Act or been otherwise transferred and new certificates
for them not bearing the Securities Act legend set forth in Section
9(f) have been delivered by the Company in accordance with Section
4(b). Whenever any particular securities cease to be Restricted
Securities, the holder thereof shall be entitled to receive from the
Company, at the Company's expense, new securities of like tenor not
bearing a Securities Act legend of the character set forth in Section
9(f).
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"SECURITIES ACT" means the Securities Act of 1933, as amended,
or any similar federal law then in force.
"SECURITIES EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended, or any similar federal law then in force.
"SECURITIES AND EXCHANGE COMMISSION" includes any governmental
body or agency succeeding to the functions thereof.
"STOCKHOLDERS AGREEMENT" means the Stockholders Agreement
dated as of the date hereof among the Company, the Purchasers and other
stockholders of the Company, as amended from time to time in accordance
with its terms.
"SUBSIDIARY" means, with respect to any Person, any
corporation, partnership, association, limited liability company,
trust, joint venture, unincorporated organization, or other business
entity of which (i) if a corporation, a majority of the total voting
power of shares of stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or
trustees thereof is at the time owned or controlled, directly or
indirectly, by that Person or one or more of the other Subsidiaries of
that Person or a combination thereof, or (ii) if a partnership, limited
liability company, joint stock company, association or other business
entity, a majority of the partnership or other similar ownership
interest thereof is at the time owned or controlled, directly or
indirectly, by that Person or one or more Subsidiaries of that Person
or a combination thereof. For purposes hereof, a Person or Persons
shall be deemed to have a majority ownership interest in a partnership,
limited liability company, joint stock company, association or other
business entity if such Person or Persons shall be allocated a majority
of partnership, limited liability company, joint stock company,
association or other business entity gains or losses or shall be or
control the managing director or general partner of such partnership,
limited liability company, joint stock company, association or other
business entity.
"TRANSACTION DOCUMENTS" has the meaning set forth in Section
2(c)(ii).
Section 7. Investment Representations. As a material inducement to
cause the Company to enter into this Agreement and to issue the Class A Common
Stock to the Purchasers hereunder, each Purchaser for solely himself, herself or
itself and not jointly and severally, hereby represents and warrants to the
Company as follows:
(a) Illiquidity of Shares. Such Person understands that (i)
the offering and sale of the Class A Common Stock is intended to be exempt from
registration under the Securities Act pursuant to Section 4(2) and Regulation D
of the Securities Act and (ii) there is no existing public or other market for
the Class A Common Stock and there can be no assurance that such Person shall be
able to sell or dispose of the Class A Common Stock.
(b) Investment Intent. The Restricted Securities to be
acquired by such Person pursuant to this Agreement is being acquired for such
Person's own account with the present intention of holding the Class A Common
Stock for purposes of investment, and that such Person has no intention of
selling the Class A Common Stock in a public distribution in
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violation of the federal securities laws or any applicable state securities
laws; provided that nothing contained herein shall prevent such Person and
subsequent holders of Restricted Securities from transferring the Restricted
Securities in compliance with Section 4.
(c) Investor Sophistication. Such Person has sufficient
knowledge and experience in financial and business matters so as to be capable
of evaluating the merits and risks of his, her, or its investment in the Class A
Common Stock and is capable of bearing the economic risks of such investment for
an indefinite period, including a complete loss of its investment in the Class A
Common Stock.
(d) Access to Information. Such Person has had the opportunity
to ask questions of, and receive answers from, the Company concerning the terms
and conditions of the Class A Common Stock, this Agreement and all other
agreements contemplated hereby. Such Person further acknowledges that the
Company has made available to such Person or his, her, or its agents all
documents and information relating to an investment in the Class A Common Stock
requested by or on behalf of such Person.
(e) Accredited Investor Status. Such Person is an accredited
investor within the meaning of Rule 501(a) of Regulation D under the Securities
Act.
(f) Required Legend. Each certificate for Restricted
Securities shall be imprinted with a legend in substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED
ON MARCH __ 2004, AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED. THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE IS SUBJECT TO THE CONDITIONS SPECIFIED IN THE STOCK
PURCHASE AGREEMENT, DATED AS OF MARCH __, 2004, BETWEEN THE ISSUER (THE
"COMPANY") AND CERTAIN INVESTORS, AND THE COMPANY RESERVES THE RIGHT TO
REFUSE THE TRANSFER OF SUCH SECURITIES UNTIL SUCH CONDITIONS HAVE BEEN
FULFILLED WITH RESPECT TO SUCH TRANSFER. A COPY OF SUCH CONDITIONS
SHALL BE FURNISHED BY THE COMPANY TO THE HOLDER HEREOF UPON WRITTEN
REQUEST AND WITHOUT CHARGE."
(g) Equity Financing. Madison Dearborn Capital Partners IV,
L.P. ("MDCP") has sufficient equity financing to fund the purchase of securities
contemplated herein on the terms and conditions contemplated by this Agreement
and to consummate the transactions contemplated hereby.
Section 8. Miscellaneous.
(a) Expenses. The Company agrees to pay, and hold MDCP and its
Affiliates harmless against liability for the payment of, its reasonable fees
and expenses incurred in connection with the negotiation and execution of this
Agreement and the Merger Agreement and the consummation of the transactions
contemplated by this Agreement and the Merger
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Agreement (including, without limitation, the fees and expenses of Xxxxxxxx &
Xxxxx LLP, Xxxxx & XxXxxxxx, Xxxxx & Xxxxx LLP and Xxxxx & Company LLC and the
costs and expenses of forming Popcorn Merger Corp.), which shall be payable at
the Closing.
(b) Consent to Amendments. Except as otherwise expressly
provided herein, the provisions of this Agreement may be amended and the Company
may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, only if the Company has obtained the written
consent of the holders of a majority of the Class A Common Stock issued
hereunder.
(c) Successors and Assigns. Except as otherwise expressly
provided herein and except for transfers in violation of the terms and
conditions of the Stockholders Agreement, all covenants and agreements contained
in this Agreement by or on behalf of any of the parties hereto shall bind and
inure to the benefit of the respective successors and permitted assigns of the
parties hereto whether so expressed or not. Notwithstanding anything to the
contrary contained herein, prior to the Closing, MDCP may assign its rights
hereunder to purchase shares of Class A Common Stock to any of its Affiliates or
other co-investors (other than motion picture exhibitors or their Affiliates) so
long as MDCP and its Affiliates acquire shares of Class A Common Stock hereunder
with an aggregate purchase price of at least $350 million, and any such assignee
of MDCP shall execute and deliver a counterpart of this Agreement and be bound
hereby as a Purchaser hereunder and obtain the rights of a Purchaser hereunder.
(d) Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
the validity, legality or enforceability of any other provision of this
Agreement in such jurisdiction or affect the validity, legality or
enforceability of any provision of this Agreement in any other jurisdiction, but
this Agreement shall be reformed, construed and enforced in such jurisdiction as
if such invalid, illegal or unenforceable provision had never been contained
herein.
(e) Entire Agreement. Except as otherwise expressly set forth
herein, this Agreement embodies the complete agreement and understanding among
the parties hereto with respect to the subject matter hereof and supersedes and
preempts any prior understandings, agreements or representations by or among the
parties, written or oral, which may have related to the subject matter hereof in
any way.
(f) Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, anyone of which need not contain the
signatures of more than one party, but all such counterparts taken together
shall constitute one and the same Agreement.
(g) Descriptive Headings; Interpretation. The descriptive
headings of this Agreement are inserted for convenience only and do not
constitute a Section of this Agreement. The use of the word "including" in this
Agreement shall be by way of example rather than by limitation.
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(h) Governing Law. All issues and questions concerning the
construction, validity, interpretation, and enforceability of this Agreement and
the exhibits and schedules hereto shall be governed by, and construed in
accordance with, the laws of the State of Delaware, without giving effect to any
choice of law or conflict of law rules or provisions (whether of the State of
Delaware or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of Delaware.
(i) No Strict Construction. The language used in this
Agreement shall be deemed to be the language chosen by the parties hereto to
express their mutual intent, and no rule of strict construction shall be applied
against any Person.
(j) Notices. All notices, demands or other communications to
be given or delivered under or by reason of this Agreement shall be in writing
and shall be either personally delivered, sent by telecopy (with hard copy to
follow via regular mail), or mailed certified or registered mail (return receipt
requested and postage prepaid) or sent to the recipient by reputable overnight
courier service (charges prepaid). Notices shall be deemed to have been given
hereunder when delivered personally, the day sent by telecopy, five business
days after deposit in the U.S. mail and one day after deposit with a reputable
overnight courier service. Such notices, demands, and other communications shall
be sent to each Purchaser at the address indicated on the Schedule of Purchasers
and to the Company at the address indicated below:
Cinemark, Inc.
0000 Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Fax: (000) 000-0000
or to such other address or to the attention of such other Person as the
recipient party has specified by prior written notice to the sending party.
* * * * *
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first written above.
CINEMARK, INC.
By: /s/ Xxx Xxx Xxxxxxxx
------------------------------------
Its: Chief Executive Officer
MADISON DEARBORN CAPITAL PARTNERS IV, L.P.
By: Madison Dearborn Partners IV, L.P.
Its: General Partner
By: Madison Dearborn Partners, LLC.
Its: General Partner
By: /s/ Xxxxxxxx Xxxxxxxxx
--------------------------------------
Its: Managing Director
SCHEDULE OF PURCHASERS
Madison Dearborn Capital Partners IV, L.P. Total Shares of Class A Common Stock Purchased
Three First National Plaza
00 Xxxx Xxxxxxx Xxxxxx, Xxxxx 0000 A number of shares equal to $518,245,013 divided by the
Xxxxxxx, XX 00000 Merger Consideration
Attention: Xxxxxxxx X. Xxxxxxxxx
