EXHIBIT 4.6
AMENDED AND RESTATED
STOCKHOLDERS' AGREEMENT
This Amended and Restated Stockholders' Agreement (this "Agreement") is
entered into as of June 27, 2002, by and among (i) Cinemark, Inc., a Delaware
corporation (the "Company"), (ii) Xxx Xxx Xxxxxxxx ("Xxxxxxxx"), (iii) CGI
Equities, Ltd., (iv) Xxxxxxxx and Xxxx Xxxxxxxxxxx as Co-Trustees for the Trusts
set forth on the signature page hereto, (v) Cypress Merchant Banking Partners
L.P., a Delaware limited partnership ("CMBP"), and (vi) Cypress Pictures Ltd., a
Cayman Islands exempted company with limited liability ("CP" and together with
CMBP, "Cypress").
RECITALS:
X. Xxxxxxxx, the Trusts, Cypress and the Company are parties to that
certain Stockholders' Agreement dated as of May 17, 2002 (the "STOCKHOLDERS'
AGREEMENT"), regulating certain aspects of the Stockholders' relationships with
regard to each other and the Company.
X. Xxxxxxxx, the Trusts and Cypress exchanged shares of the capital
stock of Cinemark USA, Inc. ("Cinemark USA") owned by Xxxxxxxx, the Trusts and
Cypress for shares of the Company (the "Exchange") pursuant to that certain
Share Exchange Agreement dated as of May 17, 2002 (the "Exchange Agreement") by
and among the Company, Cinemark USA, Xxxxxxxx, the Trusts, Cypress and the other
stockholders party thereto.
X. Xxxxxxxx, the Trusts and Cypress desire to enter into this Agreement
for the purpose of amending certain of the provisions of the Stockholders'
Agreement.
AGREEMENT:
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and for other good and valuable consideration, the Company and
Stockholders agree as follows:
Section 1. Definitions. As used herein, the following terms shall have
the following meanings:
"Acquisitions" means the purchase of capital stock, property or other
assets by the Company or any Subsidiary other than (i) any purchase or exchange
of assets by or between the Company and any Subsidiary or between any
Subsidiaries or (ii) purchase or exchange of assets in the ordinary course of
business, including without limitation, the acquisition or lease of real or
personal property in connection with new theatre development.
"Applicable Percentage" shall mean the percentage obtained by dividing
the total number of issued and outstanding shares of Common Stock held by
Cypress (together with its Related Parties) by the total number of the issued
and outstanding Common Stock of the Company.
"Asset Disposition" means any sale, conveyance, transfer or other
disposition by the Company, directly or indirectly, of any capital stock of a
Subsidiary, or any property or other assets by the Company or any Subsidiaries
whether for cash or other consideration, other than (i)
a disposition by a Subsidiary to the Company or another Subsidiary, (ii) a
disposition by the Company to a Subsidiary or (iii) dispositions made in the
ordinary course of business.
"Brazilian Investors" shall mean (i) NN Participacoes Ltda., a
Brazilian corporation, (ii) Venture II Equity Holdings Corporation, Inc., a
British Virgin Island corporation, (iii) Xxxxxxx Holdings Limited, a British
Virgin Island corporation, (iv) Rovato Financial Ltd., B.V.I., Xxxxx Xxxxxx,
Xxxxxx Xxxxxx, Xxxxxxxx Xxxxxxx, Xxxxxxx Xxxxxx, or Xxxxxxx Xxxx Leme Klabin, or
a company owned or controlled by Xxxxx Xxxxxx, Xxxxxx Xxxxxx, Xxxxxxxx Xxxxxxx,
Xxxxxxx Xxxxxx, or Xxxxxxx Xxxx Leme Klabin and (v) the Latin American
Enterprise Fund ("LAEF") or Latin American Enterprise Fund II ("XXXX XX") or to
the original stockholders of LAEF or XXXX XX or to any such person or entity
appointed by such stockholders, which is an Affiliate of such stockholders, upon
the expiration of the term of LAEF or XXXX XX, in accordance with their
respective charter documents.
"CALP" means Cypress Associates L.P., a Delaware limited partnership.
In the event that CALP is no longer the general partner of CMBP, "CALP" shall
mean the current general partner of CMBP"
"Certificate of Incorporation" means the Certificate of Incorporation
of the Company, as amended and restated to the dated hereof, as filed with the
Secretary of State of Delaware.
"Change of Control" means (i) the occurrence of any event resulting in
Xxxxxxxx (together with his Related Parties) owning a number of issued and
outstanding shares of Common Stock which is less than the number of issued and
outstanding shares of Common Stock owned by Cypress (together with its Related
Parties) or (ii) the death or total disability of both Xxxxxxxx and Xxxxx
Xxxxxxxx. For purposes of clause (i) above, no shares of Common Stock or rights
or options to acquire shares of Common Stock acquired after the date hereof by
Xxxxxxxx or his Related Parties or by Cypress or its Related Parties shall be
taken into account in determining the relative percentage of Common Stock
ownership used to determine whether a Change of Control has occurred (other than
(x) shares of Common Stock acquired by way of any stock split in respect of, or
dividend on, the Common Stock and (y) in the case of Xxxxxxxx and his Related
Parties, shares of Common Stock acquired from Cypress or its Related Parties).
As used herein, "total disability" means illness or other physical or mental
disability of a Person which shall continue for a period of at least six
consecutive months and which such illness or disability shall make it impossible
for such Person to perform any of his or her duties and responsibilities to the
Company. If a disagreement arises as to whether a Person is suffering from a
"total disability" the question of such Person's disability shall be determined
by such Person's physician.
"Common Stock" means the Class A Common Stock, par value $.001 per
share, and the Class B Common Stock, par value $.001 per share, of the Company
and any other capital stock of the Company into which such Common Stock is
reclassified or reconstituted.
"Cypress Shares" means the shares of Common Stock held at any time by
Cypress.
"Director" means a member of the Board of Directors of the Company.
"Director Options" means options to purchase 162,000 shares of Class A
Common Stock of the Company granted to Directors of the Company who are not
employees of the Company.
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"EBITDA" shall mean operating income (as currently calculated in the
Company's audited financial statements) plus depreciation and amortization
(including amortization of advance rent), deferred lease expense and amortized
compensation expense for options granted under the Nonqualified Stock Option
Plan and the Director Options and any compensation expense relating to any bonus
or tax payment plan implemented by the Company in connection with the exercise
or repurchase of options granted pursuant to the Nonqualified Stock Option Plan
or the Directors Options.
"Exchange Option Agreement" shall mean that certain Exchange Option
Agreement by and among Cinemark USA and the Brazilian Investors.
"Exempt Transfer" shall have the meaning specified in Section 2(e).
"Family Donee" shall mean with respect to any Stockholder which is an
individual, such Stockholder's spouse, siblings, descendants or parents or the
estate of such Stockholder or any trust established by the Stockholder or any
trustee (including a trustee of a voting trust), custodian, executor, fiduciary
or foundation which will hold Common Stock for charitable purposes or for the
benefit of the Stockholder or such Stockholder's spouse, siblings, descendants
or parents or the estate of such Stockholder.
"Five Year Plan" means the five year plan of Cinemark USA or any
amended five year plan approved by the Board of Directors including the Cypress
designees.
"Fully Diluted Basis" with respect to the Common Stock means the number
of shares of Common Stock which are issued and outstanding at the date of
determination plus the number of shares of Common Stock issuable pursuant to any
securities (other than Common Stock), rights or options then outstanding,
convertible into or exercisable for (whether or not subject to contingencies or
passage of time, or both), Common Stock.
"Independent Director" shall mean any individual who is elected as a
Director of the Company and satisfies all of the requirements for independence
under (i) the standards of any Exchange (as defined in Section 7 hereof) on
which the Company's Common Stock is publicly traded, (ii) Rule 16b-3 under the
Exchange Act and (iii) Section 162(m) of the Internal Revenue Code of 1986, as
each may be amended from time to time.
"Xxxxxx Loan" means that certain Loan Agreement, dated as of December
15, 2000, by and between Xxxxxx Brothers Bank FSB and Cinema Properties, Inc.,
an indirect wholly-owned subsidiary of the Company in the principal amount of
$77,000,000 or the proposed financing pursuant to that certain $250,000,000
Credit Agreement by and among the Company and Cinemark USA, Inc. (as borrower)
and the several lenders from time to time parties thereto, Xxxxxx Brothers Inc.
(as arranger), [_________] (as syndication agent) and Xxxxxx Commercial Paper
Inc. (as administrative agent).
"Minimum Return Price" means, with respect to Cypress Shares required
to be sold by Cypress pursuant to Section 2(d), a 25% pre-tax compound annual
return from the date hereof through the date of the closing of such sale by
Cypress of the Cypress Shares.
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"Xxxxxxxx Group" shall mean Xxxxxxxx, Xxxxx Xxxxxxxx, the Trusts or any
Family Donee or Affiliate (other than the Company or any of its direct or
indirect subsidiaries) or Related Party of Xxxxxxxx or the Trusts.
"Xxxxxxxx Group Stockholders" shall mean the members of the Xxxxxxxx
Group who are Stockholders.
"Xxxxxxxx Shares" means the shares of Common Stock held at any time by
a Xxxxxxxx Group Stockholder.
"Long Term Incentive Plan" means the Company's Long Term Incentive Plan
assumed by the Company as in effect on the date hereof, pursuant to which
options to purchase 1,570,050 shares of Class A Common Stock have been granted
to certain employees of the Company.
"Person" means any individual, partnership, corporation, association,
joint stock company, trust, joint venture, unincorporated organization or
governmental entity or department, agency or political subdivision thereof.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the Securities and Exchange Commission from time to
time promulgated thereunder.
"Shares" means (i) any shares of the capital stock of the Company and
(ii) any securities convertible into, and any rights, options or warrants
exchangeable or exercisable for, any of the shares of the capital stock of the
Company, in either case, at any time outstanding.
"Stockholders" means the Persons identified on the signature page
hereto as "Stockholders" and such other Persons who become parties hereto
pursuant to a Supplemental Agreement.
"Subsidiary" of any specified Person or entity means a corporation or
other entity of which a majority of the voting power of the equity securities or
other equity interests is owned, directly or indirectly, by such specified
Person.
"Supplemental Agreement" means an agreement in the form of Exhibit A
hereto pursuant to which a transferee of Shares agrees to become a party to, and
be bound by, the terms of this Agreement.
"Transfer" means, with respect to a particular Stockholder, any direct
or indirect sale, transfer, assignment, grant of participation interest in,
option, pledge, hypothecation, encumbrance or other disposition (including,
without limitation, through a Transfer Change of Control of such Stockholder, or
the general partner, manager or controlling stockholder, interest holder or
member, as the case may be, of such Stockholder); other than a pledge or other
grant of security interest necessary in connection with a Company debt financing
transaction, including, without limitation, the Xxxxxx Loan.
"Transfer Change of Control" with respect to a particular Person, means
any transaction or event (or series of related transactions or events) occurring
as a result of which (i) any person
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or entity, acting singly or as a party of a "partnership, limited partnership,
syndicate or group" (within the meaning of Section 13(d)(3) of the Exchange
Act), acquires (by purchase, reorganization, merger, combination, consolidation
or otherwise) or for the first time controls or is able to vote (directly or
through nominees, beneficial ownership, proxy or contract) fifty percent (50%)
or more of the aggregate of all outstanding equity securities of such Person on
a fully diluted basis; (ii) the sale, disposition, lease, exchange, or other
transfer of all or substantially all the assets of such Person; or (iii) the
approval by the stockholders, partners, or members, as the case may be, of such
Person of any plan or proposal for the liquidation or dissolution of such
Person.
"Trusts" shall mean The Xxxxxxxx Special Trust, The Xxxxxxxx
Grandchildren Trust for Xxxxxxx Xxx Xxxxxxx, The Xxxxxxxx Grandchildren Trust
for Cassie Xxx Xxxxxxx, The Xxxxxxxx Grandchildren Trust for Lasey Xxxxx Xxx,
The Xxxxxxxx Grandchildren Trust for Ashley Xxx Xxx, and The Xxxxxxxx
Grandchildren Trust for Skyler Xxxx Xxxxxxxx.
Section 2. Transfer of Securities.
(a) General Prohibition on Transfer.
(i) No Stockholder shall Transfer any Shares other than
Exempt Transfers where the transferee in such Exempt Transfer (if other than the
Company or a transferee pursuant to Section 2(e)(iv) hereof) has executed a
Supplemental Agreement unless (1) such Stockholder has complied with the
provisions of this Section 2, (2) the transferee has executed a Supplemental
Agreement, and (3) such Stockholder has delivered to the Company an opinion of
such Stockholder's counsel, in form and substance reasonably satisfactory to the
Company, to the effect that such Transfer is either exempt from the registration
requirements of the Securities Act and the applicable securities laws of any
state or that such registration requirements have been complied with. Any
Transfer made other than in accordance with this Section 2 shall be void and
without effect.
(ii) Notwithstanding the provisions of clause (a)(i) above,
so long as the Xxxxxx Loan is outstanding, no Stockholder shall Transfer any
Shares (or solicit any offers to buy or otherwise acquire, or to take a pledge
of any Shares), except for Transfers that will not cause an Event of Default (as
defined in the Xxxxxx Loan) under the mortgages or deeds of trust securing the
indebtedness under the Xxxxxx Loan.
(b) Right of First Offer.
(i) Subject to clause (a) above, if (i) a Xxxxxxxx Group
Stockholder desires to Transfer any or all of the Xxxxxxxx Shares then owned by
such Xxxxxxxx Group Stockholder to any Person other than pursuant to an Exempt
Transfer, or (ii) if Cypress desires to transfer any or all of the Cypress
Shares then owned by Cypress to any Person other than pursuant to an Exempt
Transfer (in either event, such Shares subject to such proposed transfer shall
herein be referred to as the "Transfer Stock"), the proposed transferor
("Seller") shall reduce to writing the terms pursuant to which such Seller
desires to Transfer the Transfer Stock (a "Transfer Offer"). The Transfer Offer
shall identify the Transfer Stock, the price of the Transfer Stock, the identity
of any third party offeror (the "Third Party"), if any, and all the other
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material terms and conditions of such Transfer Offer. The Seller shall, as soon
as reasonably practicable, provide written notice (the "Transfer Notice") of
such Transfer Offer to the Company and the other Stockholders (the "Transfer
Offerees"). The Transfer Notice shall contain an irrevocable offer (a "First
Offer") to sell the Transfer Stock to the Transfer Offerees at a price equal to
the price and upon substantially the same terms and conditions as the terms and
conditions contained in such Transfer Offer; provided, however, that in the
event the terms of the Transfer Offer entitle the Third Party to purchase the
Transfer Stock for securities of such Third Party (the "Offered Securities") or
other property, the Transfer Offerees shall be entitled to purchase the Transfer
Stock for an amount of cash equal to the fair market value, as determined by a
nationally recognized investment banking firm selected by the Seller of the
Transfer Stock, of the Offered Securities or such other property. Upon receipt
of the Transfer Notice, the Transfer Offerees shall have the irrevocable right
and option (the "Right of First Offer"), exercisable as provided below, to
accept the First Offer for all shares of the Transfer Stock (subject to the
provisions set forth below) at the price specified in the Transfer Notice. In
the event there is more than one Transfer Offeree, then the First Offer shall be
allocated among the Transfer Offerees in such proportion as the Transfer
Offerees shall determine, or if such Transfer Offerees are unable to determine
such allocation, the Transfer Stock shall be prorated among the Transfer
Offerees based upon their respective percentage ownership of Shares (on a Fully
Diluted Basis) of the Transfer Offerees electing to purchase Transfer Stock;
provided that, unless the Seller shall have consented to the purchase of less
than all of the Transfer Stock, the Transfer Offerees may not purchase any
Transfer Stock unless all the Transfer Stock is to be purchased. If the Transfer
Offeree desires to exercise such option with respect to a First Offer, the
Transfer Offeree shall provide the Seller with an irrevocable written notice of
acceptance which shall be binding on said Transfer Offeree. The notice of
acceptance must be provided to the Seller within thirty (30) days after the date
the Transfer Notice is given (the "Notice Period"), and a copy of which notice
of acceptance shall simultaneously be provided to the Company.
(ii) The closing of the purchase of the Transfer Stock by
the Transfer Offeree which has exercised the options granted pursuant to this
Section 2(b) shall take place at the principal office of the Company within
thirty (30) days after the expiration of the Notice Period (or as soon
thereafter as practicable, in the event any required governmental consents shall
not have been obtained within such thirty (30) day period. At such closing, the
Transfer Offeree shall deliver by wire transfer of federal or other immediately
available funds the appropriate amount to an account designated by Seller
against delivery of certificates representing the Transfer Stock so purchased,
duly endorsed in blank by the person or persons in whose name a stock
certificate is registered or accompanied by a duly executed assignment separate
from the certificate.
(iii) With respect to the sale by a Xxxxxxxx Group
Stockholder of Xxxxxxxx Shares which are subject to this Section 2(b), if the
Transfer Offeree has not elected to purchase the Transfer Stock within the
specified Notice Period, such Xxxxxxxx Group Stockholder shall have 90 days from
the end of the Notice Period (the "Xxxxxxxx Sales Period") in which to Transfer
any or all of the Transfer Stock to any third party at a price not less than and
on terms no more favorable to such third party than were contained in the
Transfer Notice. With respect to the sale by Cypress of Cypress Shares which are
subject to this Section 2(b), if the Transfer Offeree has not elected to
purchase the Transfer Stock within the specified Notice Period, Cypress shall
have 90 days from the end of the Notice Period (the "Cypress Sales Period") in
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which to transfer any or all of the Transfer Stock to a third party at a price
not less than and on terms no more favorable to such third party than were
contained in the Transfer Notice; provided, however, if, during the Cypress
Sales Period, Cypress receives an offer to purchase the Transfer Stock from a
third party which is a competitor of the Company or any Subsidiary in the motion
picture exhibition industry or is a controlling stockholder of a competitor of
the Company or any Subsidiary in the motion picture exhibition industry, Cypress
shall provide Xxxxxxxx with notice (the "Second Transfer Notice") specifying the
identity of the third party offeror and containing an irrevocable offer (a
"Second Offer") to sell the Transfer Stock to any member of the Xxxxxxxx Group
on the same terms and conditions contained in the Transfer Offer. Upon receipt
of the Second Transfer Notice, any member of the Xxxxxxxx Group, and/or a
designee of any member of the Xxxxxxxx Group, shall have the irrevocable right
and option to accept the Second Notice for all of the shares of the Transfer
Stock at the price specified in the Transfer Notice. If any member of the
Xxxxxxxx Group desires to exercise such option with respect to the Second Offer,
such person or their designee, shall provide Cypress with an irrevocable notice
of acceptance which shall be binding on such member of the Xxxxxxxx Group and/or
such designee. The notice of acceptance must be provided to Cypress within
fifteen (15) days after the Second Transfer Notice is given, and a copy of such
notice of acceptance shall simultaneously be provided to the Company.
(iv) No Transfer may be made to any third party other than
an Exempt Transfer pursuant to Section 2(e)(iv) hereof unless such third party
executes and delivers a Supplemental Agreement. Promptly after any sale pursuant
to this Section 2(b), the Seller shall notify the Company and the other
Stockholders of the consummation thereof and shall furnish such evidence of the
completion (including time of completion) of such sale and of the terms thereof
as the Company may reasonably request. If, at the termination of the Xxxxxxxx
Sales Period or the Cypress Sales Period, as applicable, the Seller has not
completed the sale of all the Transfer Stock, such Seller shall no longer be
permitted to Transfer such Transfer Stock pursuant to this Section 2(b) without
again fully complying with the provisions of this Section 2(b), and all of the
applicable restrictions on Transfer contained in this Agreement shall again be
in effect with respect to all such Seller's Transfer Stock.
(c) Tag-Along Right.
(i) Subject to clause (a) above, in the event that a
Xxxxxxxx Group Stockholder proposes to Transfer (in a single Transfer or a
series of related Transfers) Shares other than as an Exempt Transfer and Cypress
has elected to not exercise its Right of First Offer in connection therewith,
then Cypress shall have the right (the "Tag-Along Right") to participate on a
pro rata basis with such Xxxxxxxx Group Stockholder in such Transfer and, in
connection therewith, to require the proposed transferee to purchase from
Cypress a number of Cypress Shares (the "Tag-Along Shares") which represents,
with respect to Cypress, the same percentage of Cypress Shares (on a Fully
Diluted Basis) held by Cypress as the Xxxxxxxx Shares being transferred by such
Xxxxxxxx Group Stockholder in the proposed sale represent to the aggregate
number of Xxxxxxxx Shares (on a Fully Diluted Basis) held by such Xxxxxxxx Group
Stockholder before giving effect to the proposed sale. Any Cypress Shares sold
by Cypress pursuant to this Section 2(c) shall be sold by Cypress for the same
consideration per share and upon the same terms and conditions as such proposed
Transfer by such Xxxxxxxx Group Stockholder (the "Transfer Terms").
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(ii) In the event Cypress does not elect to exercise its
Right of First Offer pursuant to clause (b) above, the Tag-Along Right may be
exercised by Cypress upon delivery of a written notice to such Xxxxxxxx Group
Stockholder before the expiration of the Notice Period specified in clause (b)
above, proposing to sell Tag-Along Shares (the "Tag-Along Notice"). The
Tag-Along Notice shall state the number of Cypress Shares that Cypress proposes
to include in such Transfer (not to exceed the number of Tag-Along Shares).
(iii) The closing of the purchase of the Tag-Along Shares
shall take place concurrently with and at the location of the closing of the
Xxxxxxxx Shares being transferred pursuant to this Section 2(c) within thirty
(30) days after the Tag-Along Notice. At such closing, the purchaser thereof
shall deliver the consideration to be paid to Cypress by wire transfer of
federal or other immediately available funds in the appropriate amount to an
account designated by Cypress against delivery of the certificates representing
the Tag-Along Shares so purchased, duly endorsed in blank by the person or
persons in whose name a stock certificate is registered or accompanied by a duly
executed assignment separate from certificate.
(d) Obligation of Co-sale. If the Xxxxxxxx Group Stockholders
receive a written offer from any bona fide third party prospective purchaser(s)
(such purchaser excluding, without limitation, an Affiliate, Family Donee or
Related Party of Xxxxxxxx) to acquire all of the Xxxxxxxx Shares and Cypress
Shares (the "Co-Sale Offer") at a price per share that is not less than the
Minimum Return Price for the Cypress Shares, and provided Cypress has not
exercised the Right of First Offer granted pursuant to Section 2(b), if the
Xxxxxxxx Group Stockholders intend to accept such offer with respect to the
Xxxxxxxx Shares, then, subject to compliance with Section 2(b) above, Xxxxxxxx
shall give Cypress notice (the "Co-Sale Offer Notice") in writing at least
thirty days in advance of such proposed sale specifying the sales price, the
proposed purchaser and other terms of sale and representing to Cypress that the
proposed sales price per share is not less than the Minimum Return Price. If
Cypress does not exercise its Right of First Offer pursuant to Section 2(b),
then at the option of Cypress and expense of the Company, Xxxxxxxx shall obtain
a fairness opinion by a nationally recognized investment banking firm mutually
acceptable to Xxxxxxxx and Cypress stating that such a transaction is fair to
Cypress from a financial point of view. Cypress must exercise its option to
require a fairness opinion within five (5) days after receipt by Cypress of the
Co-Sale Offer Notice. Upon receipt of any requested fairness opinion, Cypress
shall be obligated to, and hereby agrees, to sell all of the Cypress Shares to
such prospective purchaser(s) for the same price per share and upon the same
terms of sale as shall be accepted by the Xxxxxxxx Group Stockholders with
respect to the sale of the Xxxxxxxx Shares; provided, however, that the Co-Sale
Offer provides that Cypress shall receive cash or a combination of cash, cash
equivalents or unrestricted securities of a company listed on a nationally
recognized securities exchange as consideration for the Cypress Shares. No
transferee or assignee of the Xxxxxxxx Shares other than a Related Party of
Xxxxxxxx shall acquire any rights under this Section 2(d).
(e) Exempt Transfer. The following transactions shall constitute
"Exempt Transfers" for the purpose of Sections 2 (a), 2(b) and 2(c): (i) subject
to Section 5(c)(viii), a Transfer of Shares by a Stockholder to the Company,
(ii) a Transfer by a Stockholder of Shares by will or intestate succession to
such Stockholder's executors, administrators, testamentary trustees, legatees or
beneficiaries, (iii) a Transfer of Shares by a Stockholder to any Related Party
of such Stockholder; provided that in the event such transferee ceases to be a
Related Party, such
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transferee shall either transfer the Common Stock then held by such transferee
to another Related Party of the transferor or execute a Supplemental Agreement,
(iv) a Transfer of Shares by a Stockholder to the public or any underwriters
pursuant to an effective registration statement under the Securities Act or a
transfer of Shares pursuant to Rule 144 promulgated thereunder, or (v) a
Transfer by a Stockholder that results from a Transfer Change of Control of such
Stockholder, or the general partner, manager or controlling stockholder,
interest holder or member, as the case may be, of such Stockholder.
(f) Related Party. As used herein, the term "Related Party" with
respect to any Stockholder means: (A) any Person that directly or indirectly,
through one or more intermediaries, has control of or is controlled by, or is
under common control with, the Person specified (an "Affiliate"); (B) a trust,
corporation, partnership, joint venture or other entity, the beneficiaries,
stockholders, partners, or owners, or Persons holding a controlling interest of
which consist of (x) such Stockholder, (y) a Family Donee and/or (z) such other
persons or entities referred to in the immediately preceding clause (A); (C) any
Family Donee with respect to any Stockholder which is an individual, such
Stockholder's spouse, siblings, children or parents; (D) with respect to any
Stockholder which is a partnership, such Stockholders' partners as of the date
such partnership becomes a Stockholder; (E) any limited partners of Cypress
subsequent to any public offering of Shares and (F) with respect to any member
of the Xxxxxxxx Group, any Related Party of Xxxxxxxx. Each Stockholder agrees
that it shall not make any Transfer of Shares indirectly which such Stockholder
could not make directly, other than in compliance with the terms hereby
applicable to such Transfer on a direct basis.
Section 3. Preemptive Right.
(a) The Company hereby grants to each Stockholder the right to
purchase, pro rata, all or any part of New Securities (as defined in Section
3(b)(i) below) which the Company may, from time to time, propose to sell or
issue. A pro rata portion, for purposes of this Agreement, is the ratio of the
number of shares of Common Stock held by such Stockholder immediately prior to
any purchase to the total number of shares of Common Stock of the Company issued
and outstanding at such time on a Fully Diluted Basis; provided, however, that
the aggregate number or amount of New Securities that may be purchased by the
Xxxxxxxx Group Stockholders may be purchased by any or all of such Xxxxxxxx
Group Stockholders in such ratios as such Xxxxxxxx Group Stockholders may
determine.
(b) New Securities.
(i) For the purpose of this Section 3, "New Securities"
shall mean shares of Common Stock of the Company and rights, options or warrants
to purchase such Common Stock, and securities of any kind whatsoever that are,
or may become, convertible into or exchangeable for such Common Stock; provided,
however, that the preemptive right provided for in Section 3(a) shall apply at
the time of issuance of the right, warrant, option or convertible or
exchangeable security and not to the conversion, exchange or exercise thereof;
and provided, further, that the term "New Securities" shall not include: (A) any
securities of the Company offered pursuant to a registration statement which has
been declared effective under the Securities Act, whereby such securities shall
be publicly traded on a national securities exchange or quoted on the National
Association of Securities Dealers, Inc., Automatic Quotation System
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or National Market System ("NASDAQ") or otherwise broadly distributed to the
general public, (B) shares of Common Stock of the Company or options to purchase
such Common Stock granted or to be granted under (i) the Long Term Incentive
Plan, (ii) the Director Options, or (iii) any other executive or director
compensation plans approved pursuant to Section 5(c)(xi), (C) shares of Common
Stock of the Company issued to acquire all or substantially all of the assets or
securities of another entity (the "Acquired Company") if such shares of Common
Stock are issued directly to the Acquired Company or to those persons owning
securities of the Acquired Company in connection with the acquisition of such
Acquired Company, (D) shares of Common Stock of Cinemark USA or any affiliate
thereof issued to the Brazilian Investors pursuant to the Exchange Option
Agreement, and (E) shares of capital stock of the Company or rights, options,
warrants or other securities convertible into or exchangeable or exercisable for
shares of capital stock of the Company issued in the manner provided for in
Section 3 of Article IV of the Certificate of Incorporation.
(ii) In the event the Company proposes to issue New
Securities, it shall give each Stockholder written notice of such intention,
describing the type of New Securities, the price and the terms upon which the
Company proposes to issue the same. Each Stockholder shall have fifteen (15)
business days from the date of receipt of any such notice (the "Preemptive Right
Period") to agree to purchase its pro rata share of such New Securities (or any
portion thereof) for the price and upon the terms specified in the notice by
giving written notice to the Company and stating therein the quantity of New
Securities to be purchased. The closing of the purchase of the New Securities by
the Stockholders exercising their preemptive rights pursuant to this Section 3
shall take place twenty (20) business days after the expiration of the
Preemptive Right Period (the "Preemptive Closing"). At the Preemptive Closing,
the purchaser thereof shall deliver the consideration to be paid to the Company
by wire transfer of federal or other immediately available funds in the
appropriate amount to an account designated by the Company against delivery of
the certificates representing the New Securities so purchased.
(iii) Subject to the rights of the Xxxxxxxx Group
Stockholders to allocate among such Xxxxxxxx Group Stockholders the aggregate
number or amount of New Securities purchased by such Xxxxxxxx Group
Stockholders, in the event that the Stockholders fail to exercise their
preemptive rights with respect to all of the New Securities proposed to be sold
by the Company within the Preemptive Right Period and Cypress has agreed to
purchase its pro rata share of the New Securities, the Company shall deliver a
notice to Cypress stating the number of remaining New Securities. Cypress shall
have the option for five (5) business days following the date such notice was
sent to elect to purchase all, but not less than all, of the remaining New
Securities not purchased by the other Stockholders. If Cypress elects to
purchase all of the remaining New Securities, Cypress shall purchase all such
remaining New Securities at the Preemptive Closing. If Cypress elects not to
purchase the remaining New Securities, the Company shall have 90 days thereafter
to sell or enter into an agreement (pursuant to which the sale of New Securities
covered thereby shall be consummated within 90 days from the date of said
agreement) to sell the New Securities respecting which the Stockholders'
preemptive rights were not exercised, at a price and upon general terms no more
favorable to the purchasers thereof than specified in the Company's notice. In
the event the Company has not sold such New Securities within said 90-day period
(or sold and issued New Securities in accordance with the foregoing within 90
days from the date of said agreement), the Company shall not thereafter
10
issue or sell any New Securities, without first offering such securities to the
Stockholders in the manner provided above.
Section 4. Registration Rights.
(a) Piggyback Registration Rights.
(i) Right to Piggyback. Subject to the last sentence of this
subsection (i), whenever the Company proposes to register any shares of Common
Stock (or securities convertible into or exchangeable for, or options, warrants
or other rights to acquire, Common Stock) with the Securities and Exchange
Commission (the "Commission") under the Securities Act (other than registrations
on Form S-4 or Form S-8 or any successor or similar form) and the registration
form to be used may be used for the registration of the Registrable Securities
(as defined in subsection (i) below) (a "Piggyback Registration"), the Company
will give written notice to all Stockholders, at least 35 days prior to the
anticipated filing date, of its intention to effect such a registration, which
notice will specify the proposed offering price, the kind and number of
securities proposed to be registered, the distribution arrangements and such
other information that at the time would be appropriate to include in such
notice, and will, subject to subsection(a)(ii) below, include in such Piggyback
Registration all Registrable Securities with respect to which the Company has
received written requests for inclusion therein within 15 business days after
the receipt of the Company's notice. Except as may otherwise be provided in this
Agreement, Registrable Securities with respect to which such request for
registration has been timely received will be registered by the Company and
offered to the public in a Piggyback Registration pursuant to this Section 4 on
terms and conditions at least as favorable as those applicable to the
registration of shares of Common Stock (or securities convertible into or
exchangeable or exercisable for Common Stock) to be sold by the Company and by
any other Person selling under such Piggyback Registration.
(ii) Priority on Piggyback Registrations. If the managing
underwriter or underwriters, if any, advise the holders of Registrable
Securities in writing that in its or their reasonable opinion or, in the case of
a Piggyback Registration not being underwritten, the Company shall reasonably
determine (and notify the holders of Registrable Securities of such
determination), after consultation with an investment banker of nationally
recognized standing, that the number or kind of securities proposed to be sold
in such registration (including Registrable Securities to be included pursuant
to subsection (a)(i) above) will materially adversely affect the success of such
offering (including, without limitation, a material impact on the selling
price), the Company shall include in such registration the number of securities,
if any, which, in the opinion of such underwriter or underwriters, or the
Company, as the case may be, can be sold without a material impact on the
selling price, as follows: (i) first, the shares the Company proposes to sell
and (ii) second, the Registrable Securities requested to be included in such
registration by the Stockholders and the Brazilian Investors, pro rata among
such requesting Stockholders and the Brazilian Investors on the basis of their
respective holdings of Common Stock.
(iii) Selection of Underwriters. If any Piggyback
Registration is an underwritten offering, the Company (by action of the Board of
Directors) will select a managing underwriter or
11
underwriters to administer the offering, which managing underwriter or
underwriters will be of nationally recognized standing and acceptable to the
holders of a majority of the Registrable Securities included therein, such
acceptance not to be unreasonably withheld or delayed.
(b) Demand Registration Rights.
(i) Right to Demand Registration. Cypress shall have the
right on any three occasions after the earlier to occur of the (i) expiration of
any lock-up period (not to exceed the later of 90 days or such longer lock-up
period as may be required by the underwriters) required by the underwriters
after the first registration by the Company of Common Stock under the Securities
Act (other than any registrations on Form S-4 or Form S-8 or a similar successor
form) or (ii) third anniversary of the date of this Agreement to make a written
request of the Company for registration with the Commission, under and in
accordance with the provisions of the Securities Act, of all or part of their
Registrable Securities (a "Demand Registration"); provided that (1) the Company
shall not effect a Demand Registration unless the Registrable Securities which
are the subject of such Demand Registration shall either represent all of the
Cypress Shares or constitute at least 5% of the issued and outstanding Common
Stock of the Company on the date of such written request, (2) if the Board of
Directors determines in the exercise of its reasonable judgment that to effect
such Demand Registration at such time would have a material adverse effect on
the Company, the Company may defer such Demand Registration for a single period
not to exceed 180 days, (3) the Company shall not be obligated to obtain audited
financial statements for any period other than at and as of the end of a fiscal
year of the Company nor shall the Company be obligated to prepare unaudited
financial statements for any period at or ending on a fiscal year end of the
Company, except to the extent that any applicable Laws adopted after the date
hereof require such financial statements for all registration statements on the
applicable form filed with the Commission, (4) the Company shall not be required
to file a registration statement with the Commission for a Demand Registration
during any lock-up period (not to exceed the later of 90 days or such longer
lock-up period as may be required by the underwriters) required by the
underwriters after a registration by the Company of Common Stock under the
Securities Act and (5) the Company shall be obligated to effect only the number
of Demand Registrations set forth in subsection 4(b)(ii) below. Within ten days
after receipt of the request for a Demand Registration, the Company will send
written notice (the "Notice") of such registration request and its intention to
comply therewith to all Stockholders who are holders of Registrable Securities
and, subject to subsection (iii) below, the Company will include in such
registration all Registrable Securities of such Stockholders with respect to
which the Company has received written requests for inclusion therein within 15
business days after the effectiveness of the Notice. All requests made pursuant
to this subsection (b)(i) will specify the aggregate number of Registrable
Securities requested to be registered and will also specify the intended methods
of disposition thereof.
(ii) Number of Demand Registrations. Cypress shall be
entitled to three Demand Registrations. A Demand Registration shall not be
counted as a Demand Registration hereunder until such Demand Registration has
been declared effective by the Commission and maintained continuously effective
for a period of at least three months or such shorter period when all
Registrable Securities included therein have been sold in accordance with such
Demand Registration. If the Company elects to issue and sell and ultimately
sells any equity securities pursuant to any Registration Statement filed in
connection with a Demand
12
Registration, then such Registration shall be deemed to be a Demand Registration
for purposes of determining the number of Demand Registrations granted by this
Agreement only so long as all of the Cypress Shares requested to be included in
such Demand Registration are sold pursuant thereto. If the managing underwriter
or underwriters, if any, advise the Company and the holders of Registrable
Securities in writing that in its or their reasonable opinion or, in the case of
a Demand Registration not being underwritten, the Company shall reasonably
determine (and notify the holders of Registrable Securities of such
determination), after consultation with an investment banker of nationally
recognized standing, that the number or kind of securities proposed to be sold
in such registration will materially adversely affect the success of such
offering (including, without limitation, a material impact on the selling
price), the Company shall include in such registration the number of securities,
if any, which in the opinion of such underwriter or underwriters, or the
Company, as the case may be, can be sold without a material impact on the
selling price, as follows: (1) first, the Shares the Company proposes to sell,
(2) second, the Registrable Securities requested to be included in such
registration by Cypress and (3) third, the Registrable Securities requested to
be included in such registration by the remaining Stockholders and the Brazilian
Investors, pro rata among such requesting Stockholders and the Brazilian
Investors on the basis of their respective holdings of Common Stock.
(iii) Selection of Underwriters. If a Demand Registration is
an underwritten offering, the Company and Cypress will select a mutually
acceptable managing underwriter or underwriters of recognized national standing
to administer the offering.
(c) Registration Procedures. With respect to any Piggyback
Registration or Demand Registration (generically, a "Registration"), the Company
will, as expeditiously as practicable:
(i) prepare and file with the Commission, within 60 days
after mailing the applicable Notice, a registration statement or registration
statements (the "Registration Statement") relating to the applicable
Registration on any appropriate form under the Securities Act, which form shall
be available for the sale of the Registrable Securities in accordance with the
intended method or methods of distribution thereof; provided that the Company
will include in any Registration Statement on a form other than Form S-1 all
information that the holders of the Registrable Securities so to be registered
shall reasonably request and shall include all financial statements required by
the Commission to be filed therewith, cooperate and assist in any filings
required to be made with the National Association of Securities Dealers, Inc.
("NASD"), and use its reasonable best efforts to cause such Registration
Statement to become effective;
(ii) prepare and file with the Commission such amendments
and post-effective amendments to the Registration Statement as may be necessary
under the Securities Act to keep each Registration Statement effective for the
applicable period, or such shorter period which will terminate when all
Registrable Securities covered by such Registration Statement have been sold;
cause each prospectus related thereto (a "Prospectus") to be supplemented by any
required Prospectus supplement, and as so supplemented to be filed pursuant to
Rule 424 under the Securities Act; and comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
Registration Statement during the applicable period
13
in accordance with the intended method or methods of distribution by the sellers
thereof set forth in such Registration Statement, the Prospectus or supplement
to the Prospectus;
(iii) notify the selling holders of Registrable Securities
and the managing underwriters, if any, promptly, and (if requested by any such
person or entity) confirm such advice in writing, (A) when the Prospectus or any
Prospectus supplement or post effective amendment has been filed, and, with
respect to the Registration Statement or any post-effective amendment, when the
same has become effective, (B) of any request by the Commission for amendments
or supplements to the Registration Statement or the Prospectus or for additional
information, (C) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or the initiation of any
proceedings for that purpose, (D) of the receipt by the Company of any
notification with respect to the suspension of the qualification of the
Registrable Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose and (E) of the happening of any
event which makes any statement made in the Registration Statement, the
Prospectus, any supplements, any post-effective amendments or any document
incorporated therein by reference untrue in any material respect or which
requires the making of any changes in the Registration Statement, the
Prospectus, any supplements, any post-effective amendments or any document
incorporated therein by reference in order to make the statements or omissions
therein not materially misleading;
(iv) make reasonable efforts to obtain the withdrawal of any
order suspending the effectiveness of the Registration Statement at the earliest
possible date;
(v) furnish to each selling holder of Registrable Securities
and each managing underwriter, without charge, at least one signed copy of the
Registration Statement and any amendment thereto, including financial statements
and schedules, all documents incorporated therein by reference and exhibits
(including those incorporated by reference);
(vi) deliver to each selling holder of Registrable
Securities and the underwriters, if any, without charge, as many copies of the
Registration Statement, the Prospectus (including each preliminary prospectus)
and any amendment or supplement thereto as such selling holder of Registrable
Securities and underwriters may reasonably request;
(vii) prior to any public offering of Registrable
Securities, register or qualify or cooperate with the selling holders of
Registrable Securities, the underwriters, if any, and their respective counsel
in connection with the registration or qualification of such Registrable
Securities for offer and sale under the securities or "blue sky" laws of such
jurisdictions as any seller or underwriter reasonably requests in writing,
considering the amount of Registrable securities proposed to be sold in each
such jurisdiction; provided that the Company will not be required to qualify
generally to do business in any jurisdiction where it is not then so qualified
or to take any action that would subject it to general service of process or tax
liabilities in any such jurisdiction where it is not then so subject;
(viii) cooperate in all reasonable respects with the selling
holders of Registrable Securities and the managing underwriters, if any, to
facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold and not bearing any
14
restrictive legends and to be in such denominations and registered in such names
as the managing underwriters may request at least two business days prior to any
sale of Registrable Securities to the underwriters;
(ix) upon the occurrence of any event contemplated by
subsection (iii)(E) above, prepare a supplement or post-effective amendment to
the Registration Statement or the related Prospectus or any document
incorporated therein by reference or file any other required document so that,
as thereafter delivered to the purchasers of the Registrable Securities, the
Prospectus will not contain an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein not misleading;
(x) cause all Registrable Securities covered by any
Registration Statement to be listed on each securities exchange on which similar
securities issued by the Company are then listed, or cause such Registrable
Securities to be listed for trading on the New York Stock Exchange, Inc., the
American Stock Exchange, Inc., or be authorized for trading on the NASDAQ
National Market System and to provide a transfer agent and registrar for
Registrable Securities covered by such Registration Statement, no later than the
effective date thereof, if requested by the holders of a majority of such
Registrable Securities or the managing underwriters, if any; and
(xi) enter into such customary agreements (including an
underwriting agreement in customary form) and take all such other actions as the
Holders of a majority (by number of shares) of the Registrable Securities being
sold or the underwriters retained by the Company, if any, reasonably request in
order to expedite or facilitate the disposition of such Registrable Securities,
including customary indemnification;
(xii) make available for inspection by any Holder of
Registrable Securities covered by such registration statement, any underwriter
participating in any disposition pursuant to such registration statement, and
any attorney, accountant or other agent retained by any such Holder or
underwriter (collectively, the "Inspectors"), all financial and other records,
pertinent corporate documents and properties of the Company and its Subsidiaries
(collectively, "Records"), if any, as shall be reasonably necessary to enable
them to exercise their due diligence responsibility, and cause the Company's and
its subsidiaries' officers, directors and employees to supply all information
and respond to all inquiries reasonably requested by any such Inspector in
connection with such registration statement. Notwithstanding the foregoing, the
Company shall have no obligation to disclose any Records to the Inspectors (i)
in the event the Company determines that such disclosure is reasonably likely to
have an adverse effect on the Company's ability to assert the existence of an
attorney-client privilege with respect thereto or (ii) to the extent such
Records are deemed confidential or proprietary by the Company or are subject to
confidentiality agreements with any Person, unless such Inspectors execute
confidentiality agreements in form satisfactory to the Company and to any such
Person;
(xiii) use its reasonable best efforts to obtain a "cold
comfort" letter from the Company's independent public accountants in customary
form and covering such matters of the type customarily covered by "cold comfort"
letters as the Holders of a majority (by number of shares) of the Registrable
Securities being sold reasonably request, and provided that such request is
reasonable in the underwriter's point of view;
15
(xiv) otherwise use its reasonable best efforts to comply
with all applicable rules and regulations of the SEC, and make available to its
security holders, as soon as reasonably practicable, an earnings statement
covering a period of at least 12 months, beginning with the first month after
the effective date of the registration statement (as the term "effective date"
is defined in Rule 158 (c) under the Securities Act), which earnings statement
shall satisfy the provision of Section 11(a) of the Securities Act and Rule 158
thereunder; and
(xv) provide a CUSIP number for all Registrable Securities,
not later than the effective date of the applicable Registration Statement.
The Company may require each seller of Registrable Securities as
to which any Registration is being effected to furnish to the Company a properly
completed and executed selling stockholder questionnaire in form and substance
as may be requested by the Company and such information regarding the proposed
distribution of such securities as the Company may from time to time reasonably
request in writing.
Each holder of Registrable Securities agrees by acquisition of
such Registrable Securities that, upon receipt of any notice from the Company of
the happening of any event of the kind described in subsection (iii)(E) of this
subsection (c), such holder will forthwith discontinue disposition of
Registrable Securities pursuant to the Registration Statement until such
holder's receipt of copies of the supplemented or amended Prospectus as
contemplated by subsection (ix) of this subsection (c), or until it is advised
in writing (the "Advice") by the Company that the use of the Prospectus may be
resumed, and has received copies of any additional or supplemental filings that
are incorporated by reference in the Prospectus, and, if so directed by the
Company, such holder will deliver to the Company all copies, other than
permanent file copies then in such holder's possession, of the Prospectus
covering such Registrable Securities current at the time of receipt of such
notice.
(d) Restrictions on Public Sale. To the extent not inconsistent
with applicable law, each Stockholder, if requested by the managing underwriter
or underwriters for any such Registration, agrees not to effect any public sale
or distribution of Common Stock (or securities convertible into or exchangeable
or exercisable for Common Stock), including a sale pursuant to Rule 144 (or any
similar provision then in force) under the Securities Act, during the 15
business days prior to, and during the lock-up period (not to exceed the later
of 90 days or such longer lock-up period as may be required by the underwriters)
required by the managing underwriter for the offering covered by such
Registration Statement beginning on, the effective date of the applicable
Registration Statement (except as part of such Registration).
(e) Registration Expenses. All expenses incident to the
Company's performance of or compliance with this Agreement will be borne by the
Company, including, without limitation, all registration and filing fees, the
fees and expenses of the counsel and accountants for the Company (including the
expenses of any "cold comfort" letters and special audits required by or
incident to the performance of such persons), all other costs and expenses of
the Company incident to the preparation, printing and filing under the
Securities Act of the Registration Statement (and all amendments and supplements
thereto) and furnishing copies thereof and of the Prospectus or Prospectus
supplement included therein, the costs and expenses incurred by the Company in
connection with the qualification of the Registrable Securities under
16
the state securities or "blue sky" laws of various jurisdictions, the costs and
expenses associated with filings required to be made with the NASD (including,
if applicable, the fees and expenses of any "qualified independent underwriter"
and its counsel as may be required by the rules and regulations of the NASD),
the costs and expenses of listing the Registrable Securities for trading on a
national securities exchange or authorizing them for trading on NASDAQ and all
other costs and expenses incurred by the Company in connection with any
Registration hereunder; provided, that, each Stockholder shall bear the costs
and expenses of all SEC and blue sky registration and filing fees attributable
to the Registrable Securities of such Stockholder, any underwriters'
commissions, brokerage fees or transfer taxes relating to the Registrable
Securities sold by such Stockholders and the fees and expenses of any counsel,
accountants or other representative retained by Stockholder.
(f) Indemnification.
(i) Indemnification by the Company. The Company agrees to
indemnify, and agrees to hold harmless, to the full extent permitted by law,
each Stockholder, its officers, directors, partners (general and limited, and
the directors, officers, Affiliates and Controlling Persons thereof), members
and agents and each Person who controls such Stockholder (within the meaning of
the Securities Act and the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) (collectively, the "Indemnified Parties"), against all losses,
claims, damages, liabilities and expenses (including any amounts paid in
settlement effected with the Company's consent to which such Indemnified Parties
may become subject under the Securities Act, state securities or blue-sky laws,
common law or otherwise), insofar as such losses, claims, damages, liabilities
or expenses arise out of or are based upon (i) any untrue or alleged untrue
statement of a material fact contained in any Registration Statement (or any
amendment or supplement thereto), Prospectus or preliminary or summary
Prospectus or any omission or alleged omission to state therein a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading and the Company will reimburse such
Indemnified Party for any legal or other expenses reasonably incurred by it in
connection with investigating or defending any such loss, claim, liability,
action or proceeding, except insofar as the same arise out of or is based upon
any untrue statement or alleged untrue statement or omission or alleged omission
made in such Registration Statement, Prospectus or preliminary or summary
Prospectus in reliance on and in conformity with written information with
respect to such Stockholder furnished to the Company by such Stockholder or its
representative expressly for use therein.
(ii) Indemnification by Holders of Registrable Securities.
In connection with any Registration in which a Stockholder is participating,
each such Stockholder will furnish to the Company in writing such information
with respect to such Stockholder as the Company reasonably requests for use in
connection with any Registration Statement or Prospectus and agrees to
indemnify, to the full extent permitted by law, the Company, the directors and
officers of the Company and each person who controls the Company (within the
meaning of the Securities Act and the Exchange Act) against any losses, claims,
damages, liabilities and expenses resulting from any untrue statement of a
material fact or any omission to state a material fact required to be stated
therein or necessary to make the statements in the Registration Statement or
Prospectus or preliminary Prospectus (in the case of the Prospectus or any
preliminary Prospectus, in light of the circumstances under which they were
made) not
17
misleading, to the extent, but only to the extent, that such untrue statement or
omission is contained in any information with respect to such Stockholder so
furnished in writing by such Stockholder or its representative specifically for
inclusion therein. In no event shall the liability of any selling holder of
Registrable Securities hereunder be greater in amount than the dollar amount of
the proceeds received by such holder upon the sale of the Registrable Securities
giving rise to such indemnification obligation. The Company shall be entitled to
receive indemnities from underwriters, selling brokers, dealer managers and
similar securities industry professionals participating in the distribution, to
the same extent as provided above with respect to information with respect to
such persons or entities so furnished in writing by such persons or entities or
their representatives specifically for inclusion in any Prospectus or
Registration Statement.
(iii) Conduct of Indemnification Proceedings. Any person or
entity entitled to indemnification hereunder will (i) give prompt written notice
to the indemnifying party after the receipt by the indemnified party of a
written notice of the commencement of any action, suit, proceeding or
investigation or threat thereof made in writing for which such indemnified party
will claim indemnification or contribution pursuant to this Agreement; provided,
however, that the failure of any indemnified party to give notice as provided
herein shall not relieve the indemnifying party of its obligations under the
preceding clauses f(i) and f(ii), except to the extent that the indemnifying
party is actually prejudiced by such failure to give notice and (ii) unless in
such indemnified party's reasonable judgment a conflict of interest may exist
between such indemnified and indemnifying parties with respect to such claim,
permit such indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party. Whether or not such defense is
assumed by the indemnifying party, the indemnifying party will not be subject to
any liability for any settlement made without its consent (but such consent will
not be unreasonably withheld). No indemnifying party will consent to the entry
of any judgment or enter into any settlement that does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect of such claim or
litigation. An indemnifying party who is not entitled to, or elects not to,
assume the defense of a claim will not be obligated to pay the fees and expenses
of more than one counsel in any one jurisdiction for all parties indemnified by
such indemnifying party with respect to such claim, unless in the reasonable
judgment of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim, in which event the indemnifying party shall be obligated to pay the fees
and expenses of such additional counsel or counsels.
(iv) Contribution. If for any reason the indemnification
provided for in the preceding clauses f(i) and f(ii) is unavailable to an
indemnified party as contemplated by the preceding clauses f(i) and f(ii), then
the indemnifying party in lieu of indemnification shall contribute to the amount
paid or payable by the indemnified party as a result of such loss, claim,
damage, liability or expense in such proportion as is appropriate to reflect not
only the relative benefits received by the indemnified party and the
indemnifying party from the offering of the Registrable Securities (taking into
account the portion of the proceeds realized by each), but also the relative
fault of the indemnified party and the indemnifying party, as well as any other
relevant equitable considerations, provided that no Stockholder shall be
required to contribute in an amount greater than the difference between the net
proceeds received by such Stockholder
18
with respect to the sale of any Shares and all amounts already contributed by
such Stockholder with respect to such claims, including amounts paid for any
legal or other fees or expenses incurred by such Stockholder.
(g) Rule 144. The Company agrees that at all times after it has
filed a registration statement pursuant to the requirements of the Securities
Act relating to any class of equity securities of the Company, it will file in a
timely manner all reports required to be filed by it pursuant to the Securities
Act and the Exchange Act and will take such further action as any holder of
Registrable Securities may reasonably request in order that such holder may
effect sales of Common Stock pursuant to Rule 144. At any reasonable time and
upon request of any Stockholder, the Company will furnish such stockholder with
such information as may be necessary to enable the Stockholder to effect sales
of Common Stock pursuant to Rule 144 under the Securities Act. Notwithstanding
the foregoing, the Company may reregister any class of its equity securities
under Section 12 of the Exchange Act or suspend its duty to file reports with
respect to any class of its securities pursuant to Section 15(d) of the Exchange
Act if it is then permitted to do so pursuant to the Exchange Act and the rules
and regulations thereunder.
(h) Participation in Underwritten Registrations. No Stockholder
may participate in any underwritten Registration hereunder unless such
Stockholder (i) agrees to sell its Registrable Securities on the basis provided
in any underwriting arrangements reasonably approved by the persons entitled
hereunder to select the underwriter and (ii) accurately completes in a timely
manner and executes all questionnaires, powers of attorney, custody agreements
(including delivery of Registrable Securities pursuant thereto), underwriting
agreements and other documents provided to such Stockholder which are
customarily required under the terms of such underwriting arrangements.
(i) Definition of Registrable Securities. "Registrable
Securities" means (A) the shares of Common Stock now owned or hereafter acquired
by any Stockholder or the Brazilian Investors, but with respect to any share,
only until such time as such share (i) has been effectively registered under the
Securities Act and disposed of in accordance with the Registration Statement
covering it or (ii) has been sold to the public pursuant to Rule 144 (or any
similar provision then in force) under the Securities Act and the Legend
referred to in Section 10 has been removed from the certificate representing
such share (at which time such share shall cease to be a Registrable Security).
Section 5. Governance.
(a) The Board of Directors of the Company (the "Board") shall at
all times be composed of the applicable number of Directors set forth below. The
Company and each Stockholder entitled to vote hereby agrees to take, at any time
and from time to time, all action necessary (including, without limitation,
voting the shares of the Class B Common Stock owned or controlled by such
Stockholder, calling special meetings of Stockholders and executing and
delivering written consents) to increase the size of the Board to be comprised
of eleven members.
(i) Commencing on the date hereof, the Board shall be
composed of nine (9) members. Prior to any Change of Control, Xxxxxxxx shall be
entitled to designate seven (7) Directors (each a "Xxxxxxxx Nominee" and
collectively the "Xxxxxxxx Nominees" and CALP
19
shall be entitled to designate (i) two (2) Directors (each a "CALP Nominee" and
collectively, the "CALP Nominees" and together with the Xxxxxxxx Nominees, the
"Nominees") if Cypress (together with its Related Parties) holds 10% or more of
the issued and outstanding Common Stock of the Company or (ii) one (1) Director
if Cypress (together with its Related Parties) holds at least 5% but less than
10%, of the issued and outstanding Common Stock of the Company. If Cypress holds
less than 5% of the issued and outstanding Common Stock of the Company, then
CALP shall not be entitled to designate any Directors of the Company. The
parties hereto shall (i) exercise all authority under applicable law to cause
any slate of directors presented to the stockholders of the Company for election
to the Board to consist of such Nominees and (ii) vote their shares entitled to
vote, or execute and deliver consents, as the case may be, and take all other
action necessary (including causing the Company to call a special meeting of
stockholders) to elect to the Board the Nominees.
(ii) Upon the occurrence of a Change of Control: (i) CALP
shall be entitled to designate the nearest whole number of Directors
constituting a percentage of the total number of Directors (x) as close to the
Applicable Percentage if the Applicable Percentage is 40% or less or (y) as
close to but not in excess of the Applicable Percentage if the Applicable
Percentage is greater than 40%, provided that if the foregoing calculation
results in CALP being able to designate fewer than the number of Directors in
clause 5(a)(i) above, CALP shall be entitled to designate the number of
Directors set forth in clause 5(a)(i); (ii) so long as Xxxxxxxx or Xxxxx
Xxxxxxxx (together with Xxxxxxxx'x Related Parties) own 10% or more of the
issued and outstanding Common Stock of the Company and the circumstances
referred to in clause (ii) of the definition of Change of Control shall not have
occurred, Xxxxxxxx or Xxxxx Xxxxxxxx shall be entitled to designate all other
Directors; and (iii) if Xxxxxxxx or Xxxxx Xxxxxxxx (together with Xxxxxxxx'x
Related Parties) hold less than 10% of the issued and outstanding Common Stock
of the Company or the circumstances referred to in clause (ii) of the definition
of Change of Control shall have occurred, then the holder or holders of a
majority of the Xxxxxxxx Shares held by Related Parties of Xxxxxxxx shall be
entitled to designate the nearest whole number of Directors (not in excess of
the result obtained by subtracting the number of Directors CALP is entitled to
designate pursuant to clause (i) above from the total number of Directors)
constituting a percentage of the total number of Directors as close to the
percentage obtained by dividing the total issued and outstanding shares of
Common Stock held collectively by Xxxxxxxx (together with his Related Parties)
by all of the issued and outstanding Common Stock of the Company. The Xxxxxxxx
Group Stockholders and Cypress hereby agree to vote their respective shares
entitled to vote to elect to the Board the nominees designated in accordance
with this Section 5(a)(ii). If the Applicable Percentage is at any time 5, then
the nearest whole number of Directors to be designated shall be determined by
rounding down.
(iii) Notwithstanding any provisions in Sections 5(a)(i) and
(ii) above to the contrary, in the event that the Company's Common Stock is
publicly traded on an Exchange, (as defined in Section 7 hereof), at least one
of the Directors that CALP is entitled to designate shall be an Independent
Director. Xxxxxxxx shall be required to designate that number of Independent
Directors such that there are a total of at least three Independent Directors at
all times.
(b) No Director may be removed except with the consent of the
holders of a majority of the share of Common Stock entitled to designate such
Director in accordance with
20
Section 5(a), and each Stockholder entitled to vote with respect to the election
of directors hereby agrees to take all action necessary (including, without
limitation, voting the shares of the Company's Common Stock owned or controlled
by such Stockholder, calling special meetings of stockholders and executing and
delivering written consents) for the purpose of accomplishing the purposes of
this Agreement. If a vacancy on the Board occurs by reason of the death,
removal, resignation, retirement or election not to serve as a Nominee, the
remaining Directors and the Company shall cause the vacancy thereby created to
be filled by a new Nominee as soon as possible (the "Replacement Director"), who
is designated in the manner and by the persons specified in Section 5(a), and
the Company and each Stockholder hereby agrees to take, at any time and from
time to time, all actions necessary to accomplish the same; provided, however,
that if any such person fails to designate a Nominee in accordance with Section
5(a) for a period of thirty (30) consecutive days, then such vacancy shall be
filled by a vote of all of the stockholders of the Company entitled to vote with
respect to the election of directors until such time as the Replacement Director
is designated in accordance with Section 5(a), at which time the term of the
Director not elected in accordance with 5(a) shall expire.
(c) In addition to any vote or consent of the Board or the
stockholders of the Company required by law or the Certificate of Incorporation,
the prior written consent of CALP shall be necessary for authorizing, effecting
or validating the following actions, which consent shall not be withheld for any
reason other than a rational business purpose relating to the Company or
delayed:
(i) amendments to the Certificate of Incorporation;
(ii) approval of all future annual budgets of the Company if
the Company's consolidated EBITDA for the immediately preceding fiscal year is
less than the projected consolidated EBITDA for such year set forth in the
Company's consolidated Five Year Plan and the difference between such amounts
exceeds 10%; provided, however, CALP shall have the right to approve any budget
for any period as to which there is no Five Year Plan then in effect.
(iii) Asset Dispositions for consideration paid to the
Company and/or its Subsidiaries (including assumed debt and the amount, if any,
by which the value (as determined by the Board of Directors) of any theatre
properties acquired by the Company and/or its Subsidiaries is less than the
value of any theatre properties of the Company and/or its Subsidiaries exchanged
therefor) in excess of $25,000,000 in the aggregate in any year;
(iv) Acquisitions for which the Company and/or its
Subsidiaries paid consideration (including assumed debt and the amount, if any,
by which the value (as determined by the Board of Directors) of any theatre
properties acquired by the Company and/or its Subsidiaries is greater than the
value of any theatre properties of the Company and/or its Subsidiaries exchanged
therefor) of more than $50,000,000 in the aggregate in any year;
(v) the merger or consolidation of the Company or any of its
Subsidiaries or sale, directly or indirectly, of all or substantially all the
Company's assets;
21
(vi) incurrence or redemption by the Company and its
Subsidiaries of indebtedness of more than $25,000,000 which is not accounted for
in the Five Year Plan;
(vii) payment of dividends on the capital stock of the
Company that is not pro rata for all shares of Common Stock other than as
provided in Article IV of the Certificate of Incorporation;
(viii) redemption or repurchase by the Company or its
Subsidiaries of any issued and outstanding capital stock of the Company other
than (a) a pro rata redemption of Common Stock, or (b) the repurchase of any
outstanding stock options granted under the Nonqualified Stock Option Plan or
pursuant to the Director Options or the repurchase of any Shares of Common Stock
issued upon exercise of any such options as approved by the Board of Directors;
provided, that (i) the repurchase price for any such stock options or shares of
Common Stock does not exceed the fair market value of such stock options or
shares of Common Stock, as the case may be, as determined in good faith by the
Board and (ii) the aggregate repurchase price for such stock options or shares
of Common Stock shall not exceed $10,000,000;
(ix) any direct or indirect transaction by the Company with
an Affiliate (including without limitation, the purchase, sale, lease or
exchange of any property, or rendering of any service or modification or
amendment of any existing agreement or arrangement), other than a transaction
which satisfies all three of the following criteria: such transaction (i) is in
the ordinary course of business, (ii) involves or has a potential value of
$5,000,000 or less and (iii) is no less favorable to the Company or Cinemark
USA, as the case may be, than an arm's-length transaction with a third party
which is not an Affiliate as determined in good faith by the Board;
(x) the election of any replacement Chief Executive Officer
or Chief Operating Officer or a similar officer whose responsibility is
executive oversight of the Company's consolidated domestic and international
operations in the event of a Change of Control;
(xi) approval of any new, or modification of any existing,
executive, officer and director compensation plans or agreements offered by the
Company or any of its Subsidiaries, including all executive, officer and
director stock option plans adopted after the date hereof, or grants of options
pursuant to any existing plans, if the aggregate value or potential value of
such plans, agreements or grants is or would be more than $2,000,000 in the
aggregate (for all such plans, agreements or grants) to any individual, or
$10,000,000 in the aggregate (for all such plans, agreements or grants) for all
individuals; provided, however, any compensation relating to any bonus or tax
payment plan implemented by the Company in connection with the exercise or
repurchase of options granted pursuant to the Long Term Incentive Plan or the
Directors Options shall not be subject to this Section 5(c)(xi), so long as the
Company's obligation under such bonus or tax payment plan, net of tax benefits
generated as a result of such bonus or tax payment plan does not exceed
$5,000,000;
(xii) the financing of the acquisition and/or construction
of theatres through limited partnerships;
22
(xiii) the commencement of any proceeding or the filing of
any petition in any court relating to bankruptcy, reorganization, insolvency,
liquidation or relief from debtors involving the Company or Cinemark USA;
(xiv) the settlement of material litigation creating an
obligation of the Company or any Subsidiary of the Company involving or having a
potential value of more than $5,000,000; and
(d) For so long as CALP is entitled to designate any Directors
of the Company pursuant to Section 5(a) (i) hereof, at least one member of each
Board Committee shall be a board member who is a designee of CALP, provided that
such Board member otherwise meets any eligibility requirements under applicable
laws, rules or regulations to serve on such Board Committee.
(e) The Company shall furnish to CALP such monthly financial
information and budget and planning information with respect to the Company and
its Subsidiaries as CALP shall reasonably request. CALP shall be afforded the
opportunity to discuss such information with the management of the Company from
time to time and upon CALP's reasonable request.
(f) The rights of CALP under Section 5(c) shall terminate in
the event that Cypress, together with its Related Parties, owns less than 10% of
the issued and outstanding Common Stock of the Company. The rights of CALP under
Section 5(d) and (e) shall terminate in the event that Cypress and its Related
Parties own less than 5%, collectively, of the issued and outstanding Common
Stock of the Company. The rights of Cypress, its Related Parties and CALP
granted under this Section 5 may be exercised only by CALP notwithstanding any
transfer of Cypress Shares to any Related Party of Cypress. No transferee or
assignee of the Cypress Shares or the Xxxxxxxx Shares (other than their
respective Related Parties) shall acquire or be deemed to acquire any rights
under Section 5 of this Agreement.
(g) In the event that (i) the Company proposes to issue New
Securities (as defined in Section 3(b)) on terms that include rights of the
holders thereof to designate Directors and (ii) Cypress exercises its preemptive
rights pursuant to Section 3 hereof and purchases (x) its pro rata share of such
New Securities being issued or sold and (y) any remaining New Securities which
were not purchased by the other Stockholders, then Cypress shall be entitled to
designate the number of Directors included in the terms pursuant to which such
New Securities were proposed to be issued to a third party. In the event that
(i) Cypress does not exercise its preemptive right to purchase its pro rata
share of such New Securities and all remaining New Securities not purchased by
the other Stockholders or (ii) the Company issues Common Stock or rights,
options or warrants to purchase Common Stock or securities that are, or may
become, convertible into or exchangeable for Common Stock under the
circumstances set forth in Section 3(b)(i)(c) in connection with the acquisition
of an Acquired Company, then if such transaction results in the issuance or sale
by the Company of 20% or less (but more than 10%, it being understood that no
purchaser of 10% or less shall be entitled to designate any Directors) of the
issued and outstanding Common Stock of the Company, without the prior written
consent of CALP the Company shall not (and Xxxxxxxx and his Related Parties
shall not) permit such purchaser to designate more than one Director or (y) if
such transaction results in the issuance or sale by the Company of more than 20%
of the issued and outstanding Common Stock of the
23
Company, without the prior written consent of CALP the Company shall not (and
Xxxxxxxx and his Related Parties shall not) grant to such purchaser rights to
designate Directors of the Company unless such rights require that such third
party (and its Related Parties) hold not less than the number of shares of
Common Stock required to be held by Cypress as a condition to the rights of CALP
to designate the same number of Directors as may be designated by such third
party. The Company shall not (and Xxxxxxxx and his Related Parties shall not),
without the prior written consent of CALP, enter into any agreement or
arrangement with any third party providing for the grant, issuance or sale of,
or otherwise grant, issue or sell to any such third party any shares of Class A
Common Stock or other class of Common Stock having voting rights unless Cypress
(and its Related Parties) shall be given the opportunity in connection therewith
to convert or exchange the shares of Common Stock held by such entities into or
for Class A Common Stock or other shares of such other class, as the case may
be. In addition, the Company agrees that in any event, the Company shall not
grant to any party any governance rights more restrictive to the Company than
the restrictions on the Company set forth in Section 5(c) hereof.
(h) The Company shall take any and all necessary or appropriate
action to cause the membership of the Board of Directors of Cinemark USA to be
identical to the Board of Directors of the Company. Notwithstanding any
provisions of this Section 5(h) to the contrary, in the event that the Company's
Common Stock is publicly traded on an Exchange (as defined in Section 7 hereof),
the provisions of this Section 5(h) shall be null and void and of no further
force or effect.
(i) Cypress agrees that any information obtained from the
Company or its representatives which is not public shall be kept confidential,
and shall not be disclosed to any persons other than the directors, officers,
employees, financial advisors, legal advisors and accountants of Cypress who
reasonably need to have access to such information and who are advised of the
confidential nature of such information and agree to maintain the
confidentiality of such information; provided that the foregoing obligation of
Cypress shall not (a) relate to any information that (1) is or becomes generally
available other than as a result of unauthorized disclosure by Cypress or by
persons to whom Cypress has made such information available, or (2) is or
becomes available to Cypress on a non-confidential basis from a third party that
is not, to Cypress' knowledge, bound by any other confidentiality agreement with
the Company or its Subsidiaries, or (b) prohibit disclosure of any information
if required by law, rule, regulation, court order, or other legal or
governmental process.
Section 6. Exchange of Class B Common Stock.
(a) Cypress shall have the right to exchange each share of
Class A Common Stock issued to Cypress pursuant to the Exchange Agreement and
then held by Cypress for one fully paid and non-assessable share of Class B
Common Stock, subject to increase or decrease, as appropriate, in the event of a
subdivision or combination of the Class B Common Stock or Class A Common Stock
into a greater or lesser number of shares outstanding or a dividend paid in
shares of Class B Common Stock or Class A Common Stock only to the holders of
Class B Common Stock. No transferee or assignee of the Cypress Shares, whether
as a result of a Transfer or otherwise, (other than an Affiliate of Cypress)
shall acquire or be deemed to acquire any rights under Section 6 of this
Agreement.
24
(b) To exercise its exchange rights under Section 6(a) above,
Cypress shall surrender to the Company at its principal place of business the
certificate or certificates representing the shares of Class A Common Stock to
be exchanged, duly endorsed to the Company or endorsed in blank. Upon the
surrender of such stock certificate or certificates, the Company shall issue or
cause to be issued to Cypress a new certificate or certificates representing the
number of shares of Class B Common Stock for which such surrendered shares have
been exchanged.
(c) The Company shall at all times reserve and keep available
solely for the purpose of issuance upon exchange of Class A Common Stock, as
herein provided, such number of shares of Class B Common Stock as shall be
issuable upon exchange of all outstanding shares of Class A Common Stock issued
to Cypress pursuant to the Exchange Agreement.
Section 7. Termination.
The provisions of Sections 2, 3, 5(c) and 5(g) of this Agreement shall
terminate upon the earlier of (i) the consummation of an underwritten public
offering of Common Stock resulting in not less than 25% of the Company's issued
and outstanding Common Stock being held by the public (including, but not
limited to, being held by all Persons (other than Xxxxxxxx or his Related
Parties) holding shares of Common Stock that have been issued or sold as
consideration or sold pursuant to a registration statement under the Securities
Act), (ii) the consummation of any merger of the Company with and into a company
whose common stock is publicly traded on a national securities exchange or
NASDAQ (each an "Exchange"), in which at least 90% of the merger consideration
is comprised of registered securities listed on an Exchange and/or cash or (iii)
the 4th anniversary of the date hereof.
Section 8. Diversion of Opportunities.
Xxxxxxxx agrees that in the event any corporate opportunity is
presented to Xxxxxxxx or any of his Affiliates to acquire or to enter into any
business transaction involving the motion picture exhibition business that would
be significant to the Company or Cinemark USA, Xxxxxxxx shall submit such
opportunity to the Board for their review and consideration by appropriate
notice in writing promptly after presentation of the opportunity to Xxxxxxxx and
that Xxxxxxxx shall take no action with respect to such opportunity until the
first to occur of (i) a decision by the Board not to pursue the opportunity so
presented by Xxxxxxxx or (ii) the expiration of thirty (30) days after receipt
of the notice from Xxxxxxxx to the Board describing such opportunity.
Notwithstanding anything else to the contrary contained herein, Xxxxxxxx may
invest his personal assets in such a manner and otherwise engage in business
transactions consistent with practices in competing business ventures in which
he owns an interest as of the date hereof.
Section 9. Miscellaneous.
(a) Legend. The certificates representing the capital stock of
the Company held by each of the Stockholders shall bear the following legend:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT
BE SOLD OR TRANSFERRED UNLESS THERE IS AN
25
EFFECTIVE REGISTRATION STATEMENT COVERING SUCH SECURITIES OR SUCH SALE OR
TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF
SUCH ACT AND ANY SIMILAR REQUIREMENTS OF ANY APPLICABLE STATE SECURITIES LAW.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS SET FORTH IN A STOCKHOLDERS' AGREEMENT DATED AS OF MAY 17, 2002, A
COPY OF WHICH IS AVAILABLE UPON REQUEST FROM THE SECRETARY OF THE COMPANY."
In connection with any Transfer of shares of any capital stock
of the Company pursuant to any public offering registered under the Securities
Act or pursuant to Rule 144 (or any similar rule or rules then in effect
promulgated under the Securities Act) if such rule is available or if the holder
of any shares of capital stock of the Company delivers to the Company an opinion
of counsel reasonably acceptable to the Company that no subsequent transfer of
such shares shall require registration under the Securities Act, the Company
shall promptly upon such Transfer deliver new certificates for such shares which
do not bear the legend set forth in this Section 10(a).
(b) Successors, Assigns and Transferees. Except as provided in
Section 5(f), this Agreement shall be binding upon and inure to the benefit of
the parties hereto, their respective legal representatives, heirs, legatees,
successors and assigns (including any party to which any Stockholder has
transferred shares if such party is required under Section 2(a) to become bound
hereby). Each such Supplemental Agreement shall become effective upon its
execution by the Company and such person acquiring such Shares, and it shall not
require the signatures or the consent of any other party hereto. Upon such
execution such person shall be bound by all the restrictions placed on the
Stockholders by this Agreement and all actions taken by the Stockholders and the
Company pursuant to this Agreement prior to the execution of such Supplemental
Agreement, shall be subject to any additional restrictions set forth in such
Supplemental Agreement and shall enjoy only such rights as specifically set
forth in such Supplemental Agreement. Notwithstanding anything to the contrary
set forth herein, shares sold to the public pursuant to an effective
registration statement or pursuant to Rule 144 shall no longer be subject to any
of the provisions of this Agreement.
(c) Governing Law. This Agreement shall be governed by,
construed and enforced in accordance with the laws of the State of Delaware
without giving effect to the conflict of laws rules or choice of laws rules
thereof.
(d) Headings. The headings of the sections contained in this
Agreement are for convenience only for the purpose of reference, are not part of
the agreement of the parties and shall not be deemed to control or affect the
meaning or construction of any provisions of this Agreement.
(e) Notices. Any notice or other communication required or
permitted to be given hereunder shall be in writing and shall be sent by
certified mail, return receipt requested (or by the most nearly comparable
method if mailed from or to a location outside of the United States), or by
cable, telex, telegram or facsimile transmission, or delivered by hand or by
overnight or similar delivery service, fees prepaid, to the party to whom it is
to be given at the address of such party set forth below or to such other
address for notice as such party shall
26
provide in accordance with the terms of this section. Except as otherwise
specifically provided in this Agreement, notice so given shall, in the case of
notice given by certified mail (or by such comparable method) be deemed to be
given and received three business days after the time of certification thereof
(or comparable act), in the case of notice so given by overnight delivery
service, on the date of actual delivery, and, in the case of notice so given by
cable, telegram, facsimile transmission, telex or personal delivery, on the date
of actual transmission or, as the case may be, personal delivery.
If to CMBP: Cypress Merchant Banking Partners L.P.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxx
If to CP or its subsidiaries: Cypress Pictures Ltd.
c/o X.X. Xxxxxx Company
Second Floor
Caledonian House
Xxxx Street, P.O. Box 265
Xxxxxx Town, Grand Cayman
Cayman Islands
With a copy to: Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxx.
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxxx
If to the Company, Cinemark, c/o Cinemark USA, Inc.
Xxxxxxxx or the Trusts: 0000 Xxxxxx Xxxxxxx
Xxxxx 000
Xxxxx, Xxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx, Vice
President and General Counsel
With a copy to: Akin, Gump, Strauss, Xxxxx & Xxxx,
L.L.P.
0000 Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: Xxxxx X. Xxxxxx, P.C.
(f) Inspection and Compliance with Law. Copies of this
Agreement will be available for inspection or copying by any Stockholder at the
offices of the Company through the Secretary of the Company.
(g) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this paragraph (g), may not be amended, modified or
supplemented, and waivers of or consents to departures from the provisions
hereof may not be given, except by a written instrument executed by the parties
hereto. The waiver by any party hereto of any
27
provision of this Agreement shall not operate or be construed as waiver of any
other provision and no failure by any party to exercise any right or privilege
hereunder shall be deemed a waiver of such party's rights or privileges
hereunder or shall be deemed a waiver of such party's rights to exercise the
same at any subsequent time or times hereunder.
(h) Transfers Void. Any Transfer of any security of the Company
in violation of this Agreement shall be null and void and the Company covenants
and agrees that it will not register or otherwise recognize a Transfer (whether
for the purposes of stockholder voting or in connection with the distribution of
dividends or other corporate assets) of any securities which it has reason to
believe was effected in violation of this Agreement.
(i) Specific Performance. Each of the parties acknowledges that
a breach of this Agreement by any other party will cause irreparable harm to
such party for which there may be no adequate remedy at law, and such party
agrees that such other parties shall be entitled, in addition to any other
remedies specifically described in this Agreement, to specific performance by
such party of Sections 2(d) and 7 of this Agreement. Each party hereby waives
the right to assert as a defense to any action for specific performance that any
other party have an adequate remedy at law.
(j) Counterparts. This Agreement may be executed in one or more
counterparts, by the original parties hereto and any successor in interest, each
of which shall be deemed to be an original and all of which together shall be
deemed to constitute one and the same agreement.
(k) Reformation and Severability. If any provision of this
Agreement is held to be illegal, invalid or unenforceable under present or
future laws effective during the term hereof in lieu of such illegal, invalid or
unenforceable provision, there shall be added automatically as a part of this
Agreement a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and enforceable,
the legality, validity and enforceability of the remaining provisions hereof
shall not in any way be affected or impaired thereby.
[SIGNATURE PAGE FOLLOWS]
28
IN WITNESS WHEREOF, the parties hereto have caused this Amended and
Restated Stockholders' Agreement to be executed as of the date first above
written.
COMPANY:
CINEMARK, INC.
By: /s/ XXXXXXX XXXXXXXX
-----------------------------------------
Name: Xxxxxxx Xxxxxxxx
---------------------------------------
Title: Secretary
--------------------------------------
/s/ XXX XXX XXXXXXXX
--------------------------------------------
Xxx Xxx Xxxxxxxx
CGI EQUITIES LTD.
By: CGI Investments, LLC
By: /s/ XXXXXX XXXXXX
-----------------------------------------
Name: Xxxxxx Xxxxxx
---------------------------------------
Title: Vice President
--------------------------------------
CYPRESS MERCHANT BANKING
PARTNERS L.P.
By: Cypress Associates L.P.,
its general partner
By: The Cypress Group L.L.C.,
its general partner
By: /s/ XXXXX X. XXXXX
----------------------------------
Name: Xxxxx X. Xxxxx
--------------------------------
Title: Member
-------------------------------
CYPRESS PICTURES LTD.
By: /s/ XXXXX X. XXXXXXXX
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
---------------------------------------
Title: Member
--------------------------------------
29
TRUSTS:
THE XXXXXXXX SPECIAL TRUST
/s/ XXX XXX XXXXXXXX
-------------------------------------------
Xxx Xxx Xxxxxxxx, Trustee
/s/ XXXX XXXXXXXXXXX
-------------------------------------------
Xxxx Xxxxxxxxxxx, Trustee
XXXXXXXX GRANDCHILDREN'S TRUST FOR
XXXXXXX XXX XXXXXXX
/s/ XXX XXX XXXXXXXX
-------------------------------------------
Xxx Xxx Xxxxxxxx, Trustee
/s/ XXXX XXXXXXXXXXX
-------------------------------------------
Xxxx Xxxxxxxxxxx, Trustee
XXXXXXXX GRANDCHILDREN'S TRUST FOR
CASSIE XXX XXXXXXX
/s/ XXX XXX XXXXXXXX
-------------------------------------------
Xxx Xxx Xxxxxxxx, Trustee
/s/ XXXX XXXXXXXXXXX
-------------------------------------------
Xxxx Xxxxxxxxxxx, Trustee
XXXXXXXX GRANDCHILDREN'S TRUST FOR
LACEY XXXXX XXX
/s/ XXX XXX XXXXXXXX
-------------------------------------------
Xxx Xxx Xxxxxxxx, Trustee
/s/ XXXX XXXXXXXXXXX
-------------------------------------------
Xxxx Xxxxxxxxxxx, Trustee
S-2
XXXXXXXX GRANDCHILDREN'S TRUST FOR
ASHLEY XXX XXX
/s/ XXX XXX XXXXXXXX
-------------------------------------------
Xxx Xxx Xxxxxxxx, Trustee
/s/ XXXX XXXXXXXXXXX
-------------------------------------------
Xxxx Xxxxxxxxxxx, Trustee
XXXXXXXX GRANDCHILDREN'S TRUST FOR
SKYLER XXX XXXXXXXX
/s/ XXX XXX XXXXXXXX
-------------------------------------------
Xxx Xxx Xxxxxxxx, Trustee
/s/ XXXX XXXXXXXXXXX
-------------------------------------------
Xxxx Xxxxxxxxxxx, Trustee
Xxxxx Xxxxxxxx, the wife of Xxx Xxx Xxxxxxxx, hereby joins in and
ratifies and confirms the foregoing Stockholders' Agreement as to any and all
interests she may have with respect to any right, title or interest owned by her
in shares of Common Stock registered in her spouse's name, whether derivative of
the community property laws of the State of Texas, or otherwise.
/s/ XXXXX XXXXXXXX
-------------------------------------------
Xxxxx Xxxxxxxx
S-3
EXHIBIT "A"
SUPPLEMENTAL AGREEMENT
This Supplemental Agreement ("Supplemental Agreement") is made as of
this _____ day of __________________________________________, 20___, by and
between ____________________________________ (the "New Stockholder"), Cinemark,
Inc. (the "Company") and the other signatories (the "Stockholders") to that
certain Amended and Restated Stockholders' Agreement dated as of
____________________, 2002 as amended, modified or supplemented from time to
time (the "Agreement"). Capitalized terms not otherwise defined herein have the
meaning ascribed to such term in the Agreement.
WITNESSETH:
WHEREAS, the Stockholders and the Company entered into the Agreement to
impose certain restrictions and obligations upon themselves and the shares of
Common Stock of the Company; and
WHEREAS, the Agreement requires that unless otherwise expressly
provided in the Agreement, all Persons acquiring Common Stock from a Stockholder
must enter into a Supplemental Agreement binding such Person to the Agreement to
the extent expressly provided in the Agreement, so as to promote the mutual
interests of the Company, the Stockholders and the New Stockholder;
NOW THEREFORE, in consideration of the mutual promises of the parties,
and as a condition for the transfer of Common Stock to the New Stockholder, the
New Stockholder acknowledges and agrees that the New Stockholder has read the
Agreement, and agreed to be bound by, and to have the benefit of, all the terms
and conditions set out in the Agreement to the extent that such terms and
conditions are applicable to the New Stockholder as a transferee of a
Stockholder in accordance with the express terms of the Agreement. This
Supplemental Agreement shall be attached to and become a part of the Agreement.
-------------------------------------------
NEW STOCKHOLDER
EXHIBIT "B"
FIVE YEAR PLAN
