Document:

exv10w19xby

 

EXHIBIT 10.19(b)

CINEMARK, INC.

STOCK OPTION AGREEMENT

     Cinemark, Inc. (the “Company”), desiring to afford an opportunity to the
undersigned optionee (the “Optionee”) to purchase certain shares of the
Company’s Class A Common Stock, par value $.001 per share (the “Common Stock”),
to provide the Optionee with an added incentive as an employee of the Company
or one or more of its Subsidiaries, hereby grants to the Optionee, and the
Optionee hereby accepts, an option to purchase the number of such shares
specified below, during a term ending at the close of business (prevailing
local time at the Company’s principal offices) on the expiration date of this
Option specified below, at the Option exercise price specified below, subject
to and upon the following terms and conditions:

     1. Grant of Option. The Company hereby grants to the Optionee effective
as of the date set forth in Section 19 hereof (the “Date of Grant”), the right
and option (the “Option”) to purchase up to the aggregate number of shares the
Common Stock set forth in Section 19 hereof, subject to adjustment pursuant to
Section 3 hereof and subject to the Optionee’s acceptance and agreement to all
of the terms and conditions and restrictions described in the Cinemark, Inc.
2004 Long Term Incentive Plan (the “Plan”), a copy of which has been made
available to the Optionee, and to the further terms, conditions and
restrictions set forth below.

     2. Exercise Price. Subject to adjustment pursuant to Section 3, the
exercise price payable by the Optionee upon exercise of this Option is set
forth in Section 19 hereof.

     3. Adjustments to Number of Shares and Option Price. The number of shares
of Common Stock issuable under the Option and exercise price for such shares
shall be subject to adjustments as provided in Section 9.4 of the Plan.

     4. Tax Status. This Option will be treated as a non-qualified stock
option within the meaning of the Internal Revenue Code of 1986, as amended (the
“Code”). There is no tax consequence to the Optionee at the time the option is
granted. Under the Code, the Optionee will realize ordinary income upon
exercise of the Options to the extent that the Fair Market Value of the Common
Stock at the time of exercise exceeds the exercise price, multiplied by the
number of shares covered by the Option or portion thereof being exercised, and
such exercise by the Optionee will be subject to applicable withholding rules.

     5. Exercise of Option. Subject to the terms of the Plan and this Option
Agreement, the Options will vest ratably on a daily basis over a period of five
years only so long as the Optionee is employed by the Company or any
Subsidiary, and the vested portion may be exercised, in whole or in part, by
written notice to the Company at any time and from time to time after the date
of grant. An Option may not be exercised for a fraction of a share of Common
Stock.

     6. Expiration of Option. This Option shall expire and cease to be
exercisable on the tenth anniversary of the Date of Grant or such earlier date
as may be specified in the Plan.

     7. Termination of Affiliation.

          (a) Subject to the following provisions of this Section 7 and
Article VI of the Plan, this Option may not be exercised unless at the
time of exercise the Optionee is an Employee of the Company or a
Subsidiary.

          (b) Termination for Cause. In the event that Optionee is an
Employee and the Optionee’s employment by the Company or a Subsidiary
shall terminate for Cause (as defined in the Plan), this Option shall
terminate immediately and shall be of no further force or effect.

 

 

          (c) Death or Disability.

               (i) In the event that an Optionee’s Service to the Company or
a Subsidiary is terminated because of Optionee’s death or
Disability, the Optionee or his estate or legal representative, as
applicable, shall have the right to exercise the Option at any time
within one year of termination of the Optionee’s employment by the
Company or a Subsidiary due to death or six months after the date
of termination of Service due to Disability unless a longer period
is otherwise required by the Code (but in no event later than the
date on which the Option otherwise would have expired by its terms)
only to the extent the Optionee was entitled to exercise his or her
Option immediately prior to the date of death or such Disability,
as applicable; provided that, in addition to the Options held by
such Optionee that have already vested, the lesser of (i) an
additional twenty percent (20%) of the number of shares covered by
the Option and (ii) the remaining amount of unvested shares covered
by the Option shall become vested and exercisable on the date of
termination due to death or Disability. To the extent that this
Option is not so exercised as specified above, it shall expire at
the end of the applicable period. For purposes of this Option
Agreement, Disability shall be as defined in the Plan.

               (ii) If the Optionee dies during the three-month period after
the termination of his or her Service to the Company or a
Subsidiary and at the time of his or her death the Optionee was
entitled to exercise this Option, this Option shall expire one year
after the date on which his Service to the Company or a Subsidiary
terminated, but in no event, later than the date on which this
Option would have expired if the Optionee had lived. Until the
expiration of such period, this Option may be exercised by the
Optionee’s executor or administrator or by any person or persons
who shall have acquired the Option directly from the Optionee by
will or in accordance with the laws of descent and distribution,
upon delivery of written notice thereof, a copy of the will, or
such other evidence as the Administrator may determine necessary to
establish the validity of the transfer, but only to the extent that
the Optionee was entitled to exercise the Option at the date of his
or her death and, to the extent the Option is not so exercised, it
shall expire at the end of such period.

          (d) Other Termination. In the event that termination of Service to
the Company or a Subsidiary terminates for reasons other than for Cause,
or death or Disability pursuant to Sections 7(b) or 7(c) above, as
applicable, the Optionee shall have the right to exercise this Option at
any time within three months after such termination to the extent the
Optionee was entitled to exercise the same immediately prior to such
termination. To the extent that this Option is not so exercised, it
shall expire at the end of such three-month period beginning on the
termination date.

     8. Procedure to Exercise. The Optionee (or other person entitled to
exercise this Option) may purchase shares of Common Stock of the Company
subject hereto by the payment to the Company of the Exercise Price in full. To
the extent that the right to purchase shares has become exercisable in
accordance with the terms of the Plan and this Option Agreement, Options may be
exercised from time to time by written notice to the Administrator, stating the
full number of shares with respect to which the Option is being exercised and
the proposed time of delivery thereof (which shall be at least five (5) days
after the giving of such notice, unless an earlier date shall have been
mutually agreed upon by the Optionee (or other person entitled to exercise the
Option) and the Administrator), accompanied by payment to the Company of the
Exercise Price in full . Such payment shall be effected (i) by certified or
official bank check, (ii) if so permitted by the Administrator, by the delivery
of a number of shares of Common Stock owned by the Participant for at least six
months (or such other period as may be established from time to time by the
Administrator or required by generally accepted accounting principles) (the
“Requisite Holding Period”) duly endorsed for transfer to the Company (plus
cash if necessary) having a Fair Market Value equal to the amount of such
Exercise Price (iii) if so permitted by the Administrator, by payment with
financial assistance from the Company in accordance with the provisions of
Section 7.4 of the Plan or (iv) in the case of an Option, during any period for
which the Common Stock is publicly traded (i.e., the Common Stock is listed on
any established stock exchange or a national market system, including without
limitation the Nasdaq National Market, or if the Common Stock is quoted on the
Nasdaq System (but not on the Nasdaq National Market) or any similar system
whereby the stock is regularly quoted by a recognized securities dealer but
closing sale prices are not reported), by a copy of instructions to a broker
directing such broker to sell the Common Stock for which such Option is
exercised, and to remit to the Company the aggregate Exercise Price of such
Options (a “Cashless Exercise”) ; provided, however, a Cashless Exercise by a
Director or executive officer that involves or may involve a direct or indirect
extension of credit or arrangement of an extension of credit by the Company or
a Subsidiary in violation of Section 402(a) of the Sarbanes-Oxley Act (codified
as Section 13(k) of the Securities Exchange Act of 1934, 15 U.S.C. § 78m(k))
shall be prohibited. In addition to payment of the Exercise Price, the
Optionee shall be

 

 

required to include payment of the amount of all federal, state, local or other
income, excise or employment taxes subject to withholding (if any) by the
Company or a Subsidiary as a result of the exercise of an Option. The Optionee
may pay all or a portion of the tax withholding by cash or check payable to the
Company, or, at the discretion of the Administrator, upon such terms as the
Administrator shall approve, by (i) certified or official bank check (ii)
Cashless Exercise, if the Stock is publicly traded and the cashless exercise
does not violate Section 402(a) of the Sarbanes-Oxley Act; (iii) tendering
Common Stock owned by the Optionee meeting the Requisite Holding Period, duly
endorsed for transfer to the Company, with a Fair Market Value on the date of
delivery equal to the withholding due for the number of shares being exercised
or purchased; (iv) in the case of an Option, by paying all or a portion of the
tax withholding for the number of shares being purchased by withholding shares
from any transfer or payment to the Optionee (“Stock Withholding"); or (v) a
combination of one or more of the foregoing payment methods. The Administrator
will, as soon as reasonably possible, notify the Optionee (or such Optionee’s
representative) of the amount of employment tax and other withholding tax that
must be paid under federal, state and local law due to the exercise of the
Option. At the time of delivery, the Company shall, without transfer or issue
tax to the Optionee (or other person entitled to exercise the Option), deliver
to the Optionee (or to such other person) at the principal office of the
Company, or such other place as shall be mutually agreed upon, a certificate or
certificates for the Option Shares after the Exercise Price and all federal,
state, local or other income, excise or employment taxes subject to withholding
have been paid; provided, however, that the time of delivery may be postponed
by the Administrator for such period as may be required for it with reasonable
diligence to comply with any requirements of law.

     9. Nontransferability of Option. This Option shall be exercisable during
the Optionee’s lifetime only by the Optionee. Notwithstanding the foregoing,
this Option may be assignable or transferable by the Optionee pursuant to the
laws of descent and distribution provided that the Company shall have been
furnished with written notice thereof and a copy of the will and/or such other
evidence as the Administrator may determine necessary to establish the validity
of the Transfer. Such assignee or transferee shall be subject to the same
requirements, obligations and restrictions as applied to the Optionee under
this Agreement, the Plan or any other undertaking of Optionee either as an
Optionee or as a Shareholder. All transfers of an Option must comply with the
provisions of Section 5.5(c) of the Plan.

     10. Continued Employment or Retention. Subject to the terms of any
Service Agreement between the Company or any Subsidiary and the Optionee,
nothing in this Option Agreement shall in any manner be construed to limit in
any way the right of the Company or any Subsidiary to terminate an Optionee’s
Service at any time, without regard to the effect of such termination on any
rights such Optionee would otherwise have under the Plan or this Option
Agreement, or to give any right to the Optionee to remain employed or retained
by the Company or a Subsidiary in any particular position or at any particular
rate of compensation.

     11. Rights as Stockholder. Neither any Optionee nor the legal
representatives, heirs, legatees, distributees or Permitted Transferees of any
Optionee shall be deemed to be the holder of, or to have any of the rights of a
holder with respect to, any Option Shares unless and until such shares of
Common Stock are issued to such Person and such Person has received a
certificate or certificates therefor. Upon the issuance and receipt of such
certificate or certificates, such Option holder shall have absolute ownership
of the shares of Common Stock evidenced thereby, including the right to vote
such shares, to the same extent as any other owner of shares of Common Stock,
and to receive dividends thereon, subject, however, to the terms, conditions
and restrictions of the Plan, the Stockholders Agreement if the Optionee
becomes a party thereto, and any other undertakings of such holder of Common
Stock.

     12. Interpretation. If and when questions arise from time to time as to
the intent, meaning or application of the provisions hereof or of the Plan,
such questions shall be decided by the Administrator in its sole discretion, as
applicable, and any such decision shall be conclusive and binding on the
Optionee. The Optionee hereby agrees that this Option is granted and accepted
subject to such condition and understanding. This Option is subject to, and
the Company and the Optionee agree to be bound by, all of the terms and
conditions of the Plan under which this Option was granted, as the same may
have been amended from time to time in accordance with Section 7.1 of the Plan.
A copy of the Plan in its present form is available for inspection during
business hours by the Optionee or other persons entitled to exercise this
Option at the Company’s principal office.

     13. Investment Representation. At such time or times as the Optionee may
exercise this Option, the Optionee shall, upon the request of the Company,
represent in writing (i) that the shares being acquired by the Optionee under
this Option will not be sold except pursuant to an effective registration
statement, or applicable exemption from registration, under the Securities Act
of 1933, as amended, (ii) that it is the Optionee’s intention to

 

 

acquire the shares being acquired for investment only and not with a view to
distribution thereof, and (iii) other customary representations as the Company
deems necessary or advisable. No shares will be issued to the Optionee unless
the Optionee provides such representations and agreements and the Company is
satisfied as to the accuracy of such representations and agreements. If so
requested by the Company, Optionee hereby agrees to provide a lock-up agreement
in accordance with Section 9.8 of the Plan.

     14. Repurchase; Restriction on Transfer; Right of First Refusal. All
shares of Common Stock purchased by the Optionee or his or her Permitted
Transferee and exercisable Options held by the Optionee at the time of
termination of Service to the Company or any Subsidiary shall be subject to
right of repurchase, transfer restrictions and rights of first refusal as set
forth in Section 9.3 of the Plan.

     15. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if delivered personally,
mailed certified or registered mail (return receipt requested, postage prepaid)
or sent by a nationally recognized overnight delivery service, to the Optionee
at the address on the signature page hereof and to the Company at the address
set forth below or at such other addresses as shall be specified in writing by
the parties by like notice:

	 	 	 	Cinemark, Inc.

3900 Dallas Parkway

Plano, Texas 7509

Attention: General Counsel

     16. Defined Terms. All capitalized terms used herein and not otherwise
defined shall have the meanings given them in the Plan.

     17. Confidentiality. Unless otherwise permitted by the Chairman of the
Board or the President of the Company, the Optionee agrees to keep confidential
the terms of this Option Agreement (and the terms of any other Option Agreement
with any other Employee or Director of the Company known to Optionee) and shall
not disclose such terms to any other Employee or otherwise.

     18. Specified Information. This Option Agreement shall apply with respect
to the following specific information:

	 	(a)	 	Date of Grant: [   ]
	 
	 	(b)	 	Name of Optionee:
	 
	 	(c)	 	Number of Shares Covered by Option:
	 
	 	(d)	 	Option Exercise Price Per Share:
	 
	 	(e)	 	Expiration Date: [   ]

     19. Rules of Construction. This Option Agreement shall be construed and
enforced in accordance with the laws of the State of Delaware, other than any
choice of law rules calling for the application of laws of another
jurisdiction. Should there be any inconsistency or discrepancy between the
provisions of this Option and the terms and conditions of the Plan under which
this Option is granted, the provisions in the Plan shall govern and prevail.

     IN WITNESS WHEREOF, the undersigned have executed this Option Agreement to
be effective as of the Date of Grant set forth above.

	 	 	 
	CINEMARK, INC.
	By:

	 	

	Name:

	 	

	Title:

	 	

	OPTIONEE

	 	

	Name:

	 	

	Optionee’s Address:exv10w20xay

 

EXHIBIT 10.20(a)

STOCK PURCHASE AGREEMENT

     THIS STOCK PURCHASE AGREEMENT (this “Agreement”), dated as of August 18,
2004 is among (i) Cinemark Empreendimentos e Participacoes, Ltda (the
“Purchaser”), (ii) Venture II Equity Holdings Corporation, Inc. (“Venture II”),
and (iii) Kristal Holdings Limited (“Kristal”); Venture II and Kristal are
sometimes referred to individually as a “Seller” and collectively as the
“Sellers”.

R E C I T A L S

     A. Cinemark USA, Inc., Lee Roy Mitchell, Venture II, Kristal and NN are
parties to that certain Option and Voting Agreement dated November 13, 2001, as
amended to the date hereof (the “Option Agreement”), pursuant to which Venture
II, Kristal and NN Participacoes Ltda (“NN”) would have the right to cause
Cinemark USA, Inc. and/or Lee Roy Mitchell to purchase shares of Cinemark
Brasil S.A. owned by Venture II, Kristal and NN (the “Liquidity Option”) upon
the occurrence of certain events.

     B. Cinemark USA, Inc. has notified Venture II, Kristal, and NN of the
occurrence of an event which triggered the Liquidity Option.

     C. Venture II, Kristal and NN have exercised the Liquidity Option in
accordance with the terms of the Option Agreement.

     D. The parties hereto have agreed upon the price per share to be paid for
the shares of Cinemark Brasil S.A.

     E. The Parties have agreed that Purchaser would be the entity acquiring
all of the shares of common stock of Cinemark Brasil S.A. (as defined herein)
owned by Venture II and Kristal.

     F. Sellers have agreed to sell such stock to the Purchaser in accordance
with the terms and conditions contained herein;

     ACCORDINGLY, in consideration of the premises and the mutual agreements,
covenants, representations and warranties hereafter set forth, and for other
good and valuable consideration the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:

1. DEFINITIONS.

     1.1 Defined Terms. Unless the context otherwise requires, the following
terms shall have the meanings herein specified for all purposes of this
Agreement, applicable to both the singular and plural forms of any of the terms
herein defined.

     “Affiliates” of any person or entity means any other person or entity
directly or indirectly controlling, controlled by, or under common control
with, such person or entity, whether through the ownership of voting
securities, by voting agreement or otherwise. For purposes of this definition,
“control”, as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting securities, by
contract or otherwise.

     “Charter Documents” means the certificate or articles of incorporation,
bylaws, partnership certificate and agreement, or other similar instrument of
an entity pursuant to which such entity was formed.

     “Cinemark Brasil” means Cinemark Brasil S.A., a company organized under
the laws of Brazil.

     “Cinemark Brasil Common Stock” means the common stock of Cinemark Brasil.

 

 

     “Damages” mean all demands, claims, actions or causes of action,
assessments, losses, damages, liabilities, costs and expenses, including,
without limitation, interest, penalties, judgments, assessments, court costs
and reasonable attorneys’ fees and expenses.

     “Governmental Body” means any federal, state, local, foreign or other
governmental or quasi-governmental, or self regulatory national securities
association, agency, authority, department, commission, court, board, bureau,
instrumentality or body.

     “Laws” mean, as to any Person, all applicable treaties, laws, rules,
regulations, orders, ordinances, judgments, decrees, orders, writs and
injunctions of all Governmental Bodies (federal, state, local, foreign or
otherwise), in each case applicable to or binding upon such Person or any of
its property or to which such Person or any of its property is subject.

     “Lien” means any charge, mortgage, pledge, hypothecation, assignment,
encumbrance, lien (statutory or other), security interest or other encumbrance
of any kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement or any financing lease
having substantially the same economic effect as any of the foregoing).

     “Material Adverse Effect” means a material adverse effect on the business,
operations, property or financial condition of a Person and its Subsidiaries
taken as a whole.

     “Person” means any individual, partnership, corporation, association,
joint stock company, trust, joint venture, unincorporated organization,
exempted company with limited liability, other entity or governmental entity or
department, agency or political subdivision thereof.

     “Purchaser Group” means the Purchaser, the directors, officers,
shareholders, employees and Affiliates of the Purchaser.

     “Related Agreements” mean any instruments and agreements contemplated
herein required to be executed and delivered pursuant to this Agreement,
including the Agreement to Terminate Agreements and the resignation of the
directors required by Section 7.1 hereof.

     “Sellers” mean Venture II and Kristal collectively.

     “Subsidiary” of any specified Person 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.

     1.2 Certain Other Defined Terms. The following terms have the meanings
specified in the sections of this Agreement set forth below:

	 	 	 	 	 
	Term
	 	Section

	Indemnitee
	 	 	8.4.1	 
	Indemnitee’s Certificate
	 	 	8.4.1	 
	Indemnitor
	 	 	8.4.1	 
	Kristal Purchase Price
	 	 	2.2	 
	Kristal Shares
	 	 	2.2	 
	Rules
	 	 	9.13.2	 
	Venture II Purchase Price
	 	 	2.1	 
	Venture II Shares
	 	 	2.1	 

2. PURCHASE OF STOCK.

     2.1 Cinemark Brasil Common Stock Owned by Venture II. On the date hereof,
subject to the terms and conditions of this Agreement, Venture II sells to the
Purchaser, and the Purchaser purchases from Venture II, an

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aggregate of 122,282 shares of Cinemark Brasil Common Stock owned by
Venture II (which includes one share of Cinemark Brasil Common Stock held of
record by each of Jairo Loureiro and Geoffrey Cleaver) (the “Venture II
Shares”). The total purchase price for the Venture II Shares is
US$17,799,837.85 (the “Venture II Purchase Price”).

     2.2 Cinemark Brasil Common Stock Owned by Kristal. On the date hereof,
subject to the terms and conditions of this Agreement, Kristal sells to the
Purchaser, and the Purchaser purchases from Kristal, an aggregate of 62,489
shares of Cinemark Brasil Common Stock owned by Kristal (the “Kristal Shares”).
The total purchase price for the Kristal Shares is US$9,096,284.55 (the
“Kristal Purchase Price”).

     2.3 Taxes. Sellers are solely responsible for the payment of any and all
taxes that may become payable as a result of the consummation of the
transactions contemplated herein, except for the Brazilian Income Tax which
shall be withheld by Purchaser on the payment of, and deducted from, (i) the
Venture II Purchase Price (US$95,456.93) and (ii) the Kristal Purchase Price
(US$19,585.64). The withholding tax is for the account of the Purchaser, and
its Reais value equivalent to the above mentioned dollar values shall be
deducted from the applicable purchase price. Sellers shall indemnify and hold
Purchaser harmless from and against any taxes payable by Sellers as a result of
the transactions contemplated herein (including, but not limited to any
additional Brazilian Income Tax) as well as any penalties and accrued interest
thereon in accordance with the provisions contained in Section 8.

3. PRICE AND TERMS.

     3.1 Payment for Venture II Shares. Subject to the terms and conditions of
this Agreement, and in consideration of the sale and delivery of the Venture II
Shares, the Purchaser delivers to Venture II on the date hereof in full payment
for the sale and delivery of the Venture II Shares free and clear of all Liens,
the Venture II Purchase Price, net of any tax withholdings required under
applicable Brazilian law, in U.S. dollars by wire transfer to accounts
designated in writing by Venture II. Transfer of shares shall occur on the same
date of payment subject to confirmation (acknowledging receipt of the price
through an electronic bank credit) of the bank indicated by Venture II and the
Purchaser.

     3.2 Payment for Kristal Shares. Subject to the terms and conditions of
this Agreement, and in consideration of the sale and delivery of the Kristal
Shares, the Purchaser delivers to Kristal on the date hereof in full payment
for the sale and delivery of the Kristal Shares free and clear of all Liens,
the Kristal Purchase Price, net of any tax withholdings required under
applicable Brazilian law, in U.S. Dollars, by wire transfer to accounts
designated in writing by Kristal, except for the value of US$145.25, which is
paid to an attorney-in-fact duly empowered by Kristal in Brazil, in payment of
one of the Kristal Shares that is not registered with the Central Bank of
Brazil. Transfer of shares shall occur on the same date of payment subject to
confirmation (acknowledging receipt of the price through an electronic bank
credit) of the bank indicated by Kristal and the Purchaser.

     3.3 Deliveries by Venture II. On the date hereof, and upon the payment to
Venture II referred to in Section 3.1, Venture II shall deliver to the
Purchaser the following:

          (a) Transfer Notification. Evidence of the execution by Venture II of the
transfer terms in the Share Transfer Book of Cinemark Brasil;

          (b) Stock Registry. Venture II shall cause the appropriate officer or
agent of Cinemark Brasil S.A. to register the Venture II Shares in the name of
the Purchaser in the stock registry of Cinemark Brasil;

          (c) Related Agreements. Counterparts of the Related Agreements duly
executed by Venture II;

          (d) Certificate. A certificate of Venture II duly executed by its
authorized officer certifying the Charter Documents of Venture II and the
corporate authorization for the party to sign on behalf of Venture II;

          (e) Termination of Inter-Shareholders Agreement. Evidence satisfactory to
Purchaser of termination of that certain agreement between Venture II, Kristal
and NN related to their respective shares of Cinemark Brasil Common Stock; and

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          (f) Deutsche Bank Fees. Evidence of payment of the fees related to
services rendered by Deutsche Bank in connection with the Venture II Shares.

     3.4 Deliveries by Kristal. On the date hereof, and upon the payment to
Kristal referred to in Section 3.2, Kristal shall deliver to the Purchaser the
following:

          (a) Transfer Notification. Evidence of the execution by Kristal of the
transfer terms in the Share Transfer Book of Cinemark Brasil;

          (b) Stock Registry. Kristal shall cause the appropriate officer or agent
of Cinemark Brasil S.A. to register the Kristal Shares in the name of the
Purchaser in the stock registry of Cinemark Brasil;

          (c) Related Agreements. Counterparts of the Related Agreements duly
executed by Kristal;

          (d) Certificate. A certificate of Kristal duly executed by its authorized
officer certifying the Charter Documents of Kristal and the corporate
authorization for the party to sign on behalf of Kristal;

          (e) Termination of Inter-Shareholders Agreement. Evidence satisfactory to
Purchaser of termination of that certain agreement between Venture II, Kristal
and NN related to their respective shares of Cinemark Brasil Common Stock; and

          (f) Deutsche Bank Fees. Evidence of payment of the fees related to
services rendered by Deutsche Bank in connection with the Kristal Shares.

     3.5 Deliveries by the Purchaser. On the date hereof, the Purchaser
delivers to Venture II the Venture II Purchase Price and to Kristal the Kristal
Purchase Price, in accordance with the terms contained herein.

4. REPRESENTATIONS AND WARRANTIES BY VENTURE II. Venture II hereby represents
and warrants to the Purchaser that:

     4.1 Organization and Good Standing. It is a corporation duly organized
and validly existing under the laws of the British Virgin Islands, is in good
standing in that jurisdiction and is qualified to do business and is in good
standing as a foreign corporation in any other jurisdiction where the failure
to be so qualified or in good standing would have a material adverse effect on
the validity or enforceability of this Agreement or its ability to timely
perform its obligations thereunder;

     4.2 Authority. It has the power and authority to enter into this
Agreement and the Related Agreements and will at all times have the corporate
power and authority to perform its obligations under this Agreement and the
Related Agreements;

     4.3 Validity. This Agreement and the Related Agreements have been duly
authorized by all requisite action on its part, have been executed and
delivered by it, and this Agreement and the Related Agreements constitute its
valid and binding obligation, enforceable in accordance with the terms of this
Agreement and the Related Agreements;

     4.4 Ownership. The Venture II Shares are owned by Venture II free and
clear of any Lien, claim or encumbrance of any kind or nature whatsoever, and
the Purchaser acquires valid, indefeasible and marketable title to the Venture
II Shares, free and clear of any Lien, claim or encumbrance of any kind or
nature whatsoever. Venture II has properly registered foreign investment
capital with the Central Bank of Brazil for its investment in Cinemark Brasil
in the amount of US$17,418,010.11.

     4.5 No Violation. Neither the execution, delivery or performance by
Venture II of this Agreement or any other Related Agreement to which Venture II
is a party nor the consummation of the transactions contemplated hereby or
thereby and compliance by Venture II with any of the provisions hereof or
thereof (a) violates any

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provision of the Charter Documents of Venture II, (b) requires any
consent, approval or notice under, violates, conflicts with, or results in a
breach of any provisions of, or constitutes a default (or any event which, with
notice or lapse of time or both, would constitute a default) under, or results
in the termination of, or accelerates the performance required by, or results
in a right of termination or acceleration or results in the creation of any
Lien upon any of the properties or assets of Venture II under, in each case,
any of the terms, conditions or provision of any agreement, instrument,
undertaking or arrangement to which Venture II is a party or by which the
Venture II Shares are bound or (c) violates any Laws.

5. REPRESENTATIONS AND WARRANTIES BY KRISTAL. Kristal hereby represents and
warrants to the Purchaser that:

     5.1 Organization and Good Standing. It is a corporation duly organized
and validly existing under the laws of the British Virgin Islands, is in good
standing in that jurisdiction and is qualified to do business and is in good
standing as a foreign corporation in any other jurisdiction where the failure
to be so qualified or in good standing would have a material adverse effect on
the validity or enforceability of this Agreement or its ability to timely
perform its obligations thereunder.

     5.2 Authority. It has the power and authority to enter into this
Agreement and the Related Agreements and will at all times have the corporate
power and authority to perform its obligations under this Agreement and the
Related Agreements.

     5.3 Validity. This Agreement and the Related Agreements have been duly
authorized by all requisite action on its part, have been executed and
delivered by it, and this Agreement and the Related Agreements constitute its
valid and binding obligation, enforceable in accordance with the terms of this
Agreement and the Related Agreements.

     5.4 Ownership. The Kristal Shares are owned by Kristal free and clear of
any Lien, claim or encumbrance of any kind or nature whatsoever, and the
Purchaser acquires valid, indefeasible and marketable title to the Kristal
Shares, free and clear of any Lien, claim or encumbrance of any kind or nature
whatsoever. Kristal has properly registered foreign investment capital with the
Central Bank of Brazil for its investment in Cinemark Brasil in the amount of
US$9,017,942.00.

     5.5 No Violation. Neither the execution, delivery or performance by
Kristal of this Agreement or any other Related Agreement to which Kristal is a
party nor the consummation of the transactions contemplated hereby or thereby
and compliance by Kristal with any of the provisions hereof or thereof (a)
violates any provision of the Charter Documents of Kristal, (b) requires any
consent, approval or notice under, violates, conflicts with, or results in a
breach of any provisions of, or constitutes a default (or any event which, with
notice or lapse of time or both, would constitute a default) under, or results
in the termination of, or accelerates the performance required by, or results
in a right of termination or acceleration or results in the creation of any
Lien upon any of the properties or assets of Kristal under, in each case, any
of the terms, conditions or provision of any agreement, instrument, undertaking
or arrangement to which Kristal is a party or by which the Kristal Shares are
bound or (c) violates any Laws.

6. REPRESENTATIONS AND WARRANTIES BY THE PURCHASER. The Purchaser hereby
represents and warrants to Seller the following:

     6.1 Organization and Good Standing. Purchaser is a corporation,
incorporated, validly existing and in good standing under the laws of the
jurisdiction of its formation.

     6.2 Authority. Purchaser has all requisite corporate power and authority
to execute and deliver this Agreement and the Related Agreements, and to
consummate the transactions contemplated hereby or thereby. The execution,
delivery and performance by the Purchaser of this Agreement and each of the
Related Agreements has been duly authorized by the Purchaser, and no other act
or proceeding on the part of the Purchaser is necessary to authorize this
Agreement or any of the Related Agreements or the transactions contemplated
hereby or thereby.

- 5 -

 

This Agreement is, and each of the other Related Agreements executed and
delivered to the Seller by the Purchaser, is a valid and legally binding
obligation of the Purchaser, enforceable against the Purchaser in accordance
with its terms, except as limited by applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting the enforcement of
creditors’ rights generally and by general principles of equity (regardless of
whether such enforcement is sought in a proceeding in equity or at law).

     6.3 No Violation. Neither the execution, delivery or performance by the
Purchaser of this Agreement or any of the Related Agreements, nor the
consummation by the Purchaser of the transactions contemplated hereby or
thereby: (a) violates any provision of the Charter Documents of Purchaser; or
(b) (i) violates, or be in conflict with, or constitutes a default (or an event
or condition which, with notice or lapse of time or both, would constitute a
default) under, or breach of, or (ii) results in the termination of, or
accelerates the performance required by, or causes the acceleration of the
maturity of any liability or obligation.

     6.4 Lehman Fees. Purchaser’s affiliate has paid or will pay all amounts
owed to Lehman Brothers Inc. for the services related to the Cinemark Brasil
Common Stock.

7. OTHER AGREEMENTS.

     7.1 Resignation of Directors. On the date hereof, and upon the payment
referred to in Sections 3.1 and 3.2, Jairo Loureiro and all of his alternates
shall execute and deliver resignations from the Board of Directors of Cinemark
Brasil effective as of the date hereof.

     7.2 Termination of Agreements. On the date hereof, and upon the payment
referred to in Sections 3.1 and 3.2, Purchaser and Sellers shall execute the
Agreement to Terminate Agreements attached hereto as Exhibit “A”.

     7.3 Intentionally Deleted.

     7.4 Approval of Transaction by CADE. Purchaser will promptly cause
Cinemark Brasil to file such information and seek such approvals of the
Brazilian antitrust authorities, CADE, as shall be required with respect to the
transactions contemplated herein under the antitrust laws and regulations of
Brazil. Any costs associated with the filing with the CADE, including but not
limited to attorney’s fees and filing fees, shall be borne by Purchaser,
provided however that Purchaser and Sellers agree, at their own cost and
expense, to make available or cause to be made available promptly to Cinemark
Brasil or each other (as applicable) such information as may reasonably be
requested relative to the businesses, assets and property of Purchaser, Sellers
or Cinemark Brasil (as the case may be), as may be required to prepare such
filings and to file any additional information requested by such agencies under
such laws, rules or regulations.

     7.5 Waiver of Right of First Refusal. Venture II and Kristal each waive
their respective rights of first refusal each may have pursuant to the Amended
and Restated Shareholders’ Agreement dated November 13, 2001 between the
shareholders of Cinemark Brasil S.A..

8. INDEMNIFICATION.

     8.1 Survival of Representations. All representations and warranties made
by any party to this Agreement or pursuant hereto or the Related Agreements
shall survive the date hereof.

     8.2 Venture II and Kristal’s Agreement to Indemnify. Subject to the terms
and conditions of this Section 8, Venture II and Kristal hereby jointly and
severally agree to indemnify, defend and hold harmless the Purchaser Group at
any time after consummation of the transactions contemplated by this Agreement,
from and against all Damages, asserted against, resulting to, imposed upon or
incurred by the Purchaser Group or any member thereof, directly or indirectly,
by reason of or resulting from a breach of any representation, warranty or
agreement of Venture II and Kristal contained in this Agreement or the Related
Agreements or any facts or circumstances constituting such a breach.

- 6 -

 

     8.3 The Purchaser’s Agreement to Indemnify. Subject to the terms and
conditions of this Section 8, the Purchaser agrees to indemnify, defend and
hold harmless Sellers, Jairo Loureiro, Geoffrey Cleaver and Roberto Luz
Portella at any time after consummation of the transactions contemplated by
this Agreement, from and against all Damages asserted against, resulting to,
imposed upon or incurred by the Sellers or any member thereof, directly or
indirectly, by reason of or resulting from a breach of any representation,
warranty or agreement of the Purchaser contained in this Agreement or the
Related Agreements or any facts or circumstances constituting such a breach.

     8.4 Procedures for Resolution and Payment of Claims for Indemnification.

          8.4.1 Notice Claims Between the Parties. If a person or entity entitled
to be indemnified under this Section 8 (the “Indemnitee”) shall incur any
Damages or determine that it is likely to incur any Damages, and believes that
it is entitled to be indemnified against such Damages by a party hereunder (the
“Indemnitor”), such Indemnitee shall deliver to the Indemnitor a certificate
(an “Indemnitee’s Certificate”) signed by the Indemnitee, which Indemnitee’s
Certificate shall:

                    (a) state that the Indemnitee has paid or properly accrued Damages for
which such Indemnitee is entitled to indemnification pursuant to this
Agreement; and

                    (b) if and to the extent practicable, specify in reasonable detail each
individual item of Damages included in the amount so stated, the date such item
was paid or properly accrued, the basis for any anticipated liability and basis
upon which the claim for indemnification is being made and the computation of
the amount to which such Indemnitee claims to be entitled hereunder.

          8.4.2 Agreed Claims. Claims for Damages specified in any Indemnitee’s
Certificate to which an Indemnitor shall not timely object in writing within
thirty (30) days after receipt of such Indemnitee’s Certificate and claims for
Damages the validity and amount of which shall have been the subject of a final
judicial determination are hereinafter referred to, collectively, as “Agreed
Claims”.

          8.4.3 Right to Defend. The Indemnitor shall have the right to undertake,
conduct and control, through counsel of its own choosing and at the sole
expense of the Indemnitor, the conduct and settlement of any third party claim
giving rise to indemnification hereunder, and the Indemnitee shall cooperate
with the Indemnitor in connection therewith; provided that (i) the Indemnitor
agrees to undertake such defense as an Agreed Claim hereunder without waiver of
any claim or right the Indemnitor may have against the Indemnitee with respect
to such claim, including termination of indemnification in the event that facts
or circumstances become known to the Indemnitor following the undertaking of
such defense that would terminate the Indemnitor’s obligation to indemnify the
Indemnitee hereunder, and (ii) the Indemnitor shall permit the Indemnitee to
participate in such conduct or settlement through counsel chosen by the
Indemnitee, but the fees and expenses of such counsel shall be borne by the
Indemnitee.

          8.4.4 Settlement. Anything in this Section 8.4 to the contrary
notwithstanding, (i) if there is a reasonable probability that a third party
claim may materially and adversely affect the Indemnitee other than as a result
of money damages or other money payments for which the Indemnitee would be
entitled to receive indemnification, the Indemnitee shall have the right, at
its own cost and expense, to defend, compromise or settle such claim; provided,
however, that if such claim is settled without the Indemnitor’s consent (which
consent shall not be unreasonably withheld), the Indemnitee shall be deemed to
have waived all rights hereunder against the Indemnitor for money damages
arising out of such claim, and (ii) the Indemnitor shall not, without the
written consent of the Indemnitee, settle or compromise any claim or consent to
the entry of any judgment which does not include as an unconditional term
thereof the giving by the claimant or the plaintiff to the Indemnitee a release
from all liability in respect to such claim.

     8.5 Remedies Cumulative. Except as herein expressly provided, the
remedies provided herein shall be cumulative and shall not preclude assertion
by any party hereto of any other rights or the seeking of any other remedies
against any other party hereto.

9. MISCELLANEOUS.

- 7 -

 

     9.1 Expenses. Sellers and the Purchaser shall pay all their respective
expenses (including, without limitation, expenses of their attorneys,
accountants, investment bankers, consultants and travel) incurred in connection
with the transactions contemplated by this Agreement and the Related
Agreements.

     9.2 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,
and the legality, validity and enforceability of the remaining provisions
hereof shall not in any way be affected or impaired thereby.

     9.3 Further Assurances. Each party hereto shall, from time to time after
the date hereof, at the request of any other party hereto and without further
consideration, promptly execute and deliver such other instruments of
conveyance, assignments, transfer and assumption, and take such other actions,
as such other party may reasonably request to more effectively consummate the
transactions contemplated by this Agreement.

     9.4 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 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 ten (10) 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 Venture II or Kristal:
	 	Venture II Equity Holdings Corporation
	

	 	 	 	c/o Demarest e Almeida Advogados
	

	 	 	 	Av. Pedroso de Moraes, 1.201
	

	 	 	 	São Paulo-SP 05419-001-Brazil
	

	 	 	 	Attention: Roberto Luz Portella
	

	 	 	 	Facsimile Number: 55-11-888-1700
	 
	 	 	 	 
	

	 	 	 	Kristal Holdings Limited
	

	 	 	 	c/o Demarest e Almeida Advogados
	

	 	 	 	Av. Pedroso de Moraes, 1.201
	

	 	 	 	São Paulo-SP 05419-001-Brazil
	

	 	 	 	Attention: Roberto Luz Portella
	

	 	 	 	Facsimile Number: 55-11-888-1700
	 
	 	 	 	 
	

	 	 	 	The Latin American Enterprise Fund, L.P.
	

	 	 	 	c/o Demarest e Almeida Advogados
	

	 	 	 	Av. Pedroso de Moraes, 1.201
	

	 	 	 	São Paulo-SP 05419-001-Brazil
	

	 	 	 	Attention: Roberto Luz Portella
	

	 	 	 	Facsimile Number: 55-11-888-1700
	 
	 	 	 	 
	

	 	If to Purchaser:
	 	Cinemark Empreendimentos Participacoes Ltda.
	

	 	 	 	c/o Cinemark, Inc.
	

	 	 	 	3900 Dallas Parkway, Suite 500
	

	 	 	 	Plano, Texas 75093
	

	 	 	 	Attention: Michael Cavalier, Vice President-General Counsel
	

	 	 	 	Facsimile Number 972-665-1004

- 8 -

 

     9.5 Headings. The headings of sections contained in this Agreement are
for convenience only and shall not be deemed to control or affect the meaning
or construction of any provision of this Agreement.

     9.6 Waiver. The failure of any party to insist, in any one or more
instances, upon performance of any of the terms, covenants or conditions of
this Agreement shall not be construed as a waiver or a relinquishment of any
right or claim granted or arising hereunder or of the future performance of any
such term, covenant, or condition, and such failure shall in no way affect the
validity of this Agreement or the rights and obligations of the parties hereto.

     9.7 Law Governing. This Agreement shall be governed by, construed and
enforced in accordance with the laws of the Federative Republic of Brazil
without giving effect to the conflict of laws thereof.

     9.8 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, and all of which
together shall constitute one and the same instrument notwithstanding that all
parties are not signatories to each counterpart.

     9.9 Assignability and Binding Effect. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. Sellers may not assign this Agreement nor
any of the rights and obligations hereunder to any third party without the
express written consent of Purchaser. Purchaser may assign this Agreement
without Sellers’ consent to any third party who agrees to be bound by this
Agreement.

     9.10 Amendments. This Agreement may not be modified, amended or
supplemented except by an agreement in writing signed by all of the parties
hereto.

     9.11 Number and Gender of Words. When the context so requires in this
Agreement, words of gender shall include either or both genders and the
singular number shall include the plural.

     9.12 Entire Agreement. This Agreement (including the Schedules and
Exhibits hereto) and the Related Agreements shall constitute the entire
agreement between the parties hereto with respect to the subject matter thereof
and shall supersede all prior negotiations, understandings and agreements, oral
and written with respect to the transactions contemplated hereby and thereby.

     9.13 Arbitration.

          9.13.1 The parties undertake to adopt the principle of good faith and to
use their best efforts towards an amicable solution as a definitive settlement
for any claim, controversy or dispute related to this Agreement.

     9.13.1.1 Should the parties be unable to reach an amicable
settlement within the period of fifteen days from the date of the
relevant notice sent by one party to the other in connection therewith,
any of the parties shall, without any further formality, be free to
initiate arbitration proceedings in pursuance thereof.

          9.13.2 The arbitration proceeding shall governed by Brazilian law and
shall be held in the city of São Paulo, State of São Paulo. The parties hereby
elect the Panel of Arbitrators of the Brazil-Canada Chamber of Commerce (the
“Panel of Arbitrators”) and undertake to accept its rules (“Rules”) effective
as of the date on which the arbitration request is presented, being admitted
any amendments convened between the parties. If the Rules are silent on any
procedural aspect they shall be supplemented by Brazilian procedural laws,
namely the relevant provisions of Federal Law No. 9,307, of September 23, 1996
and those of the Brazilian Civil Procedure Code.

          9.13.3 The Panel of Arbitrators shall consist of three (3) arbitrators, of
whom one (1) shall be nominated by Purchaser, one (1) by Sellers or relevant
Seller(s) and the third, who shall serve as chairman, shall be chosen by the
two party-appointed arbitrators, or, in the event the party-appointed
arbitrators are unable to designate the third arbitrator the third arbitrator
shall be appointed within the subsequent period of ten (10) days in accordance

- 9 -

 

with the Rules. The language of the arbitration shall be Portuguese. The
award of the arbitrators shall be final and binding. The parties waive any
right to appeal, to the extent that a right to appeal may lawfully be waived.
Each party retains the right to seek judicial assistance: (a) to compel
arbitration; (b) to obtain interim measures of protection rights prior to
institution of pending arbitration and any such action shall not be construed
as a waiver of the arbitration proceedings by the parties; and (c) to enforce
any decision of the arbitrators, including the final award. In case the parties
seek judicial assistance the Central Courts of the City of São Paulo shall have
jurisdiction.

          9.13.4 If any party hereto refuses to sign the arbitration covenant, the
other party may pursue the remedies provided under the applicable law to
proceed with the arbitration. If the claim is accepted, such refusal shall be
considered unjustified, and the party that refused to sign the arbitration
covenant shall reimburse the prevailing party of its attorneys fees and costs
in pursuing the claim.

     9.14 Prevailing Language. This Agreement (including the Exhibits hereto)
and the Related Agreements have been drafted in English. On the date hereof,
the Parties agreed on the Portuguese translation of this Agreement and the
Related Agreements, which is attached to this Agreement as Exhibit B. Any
translations to any other language shall be only for convenience or for
purposes of making any necessary filings. The English version of this
Agreement, including the Exhibits and Related Agreements, shall prevail in all
matters related to this Agreement, or the applicable Exhibits or Related
Agreements.

- 10 -

 

     IN WITNESS WHEREOF, the parties hereto have caused this Stock Purchase
Agreement to be executed as of the date first above written.

	 	 	 	 	 
	 	 	PURCHASER:
	 
	 	 	 	 
	 	 	CINEMARK EMPREENDIMENTOS
	 	 	E PARTICIPACOES LTDA.
	 
	 	 	 	 
	

	 	By:	 	/s/ Valmir Fernandes
	

	 	 	 	
 
	

	 	Name:	 	Valmir Fernandes
	

	 	 	 	
 
	

	 	Title:	 	Director
	

	 	 	 	
 
	 
	 	 	 	 
	

	 	By:	 	/s/ Marcelo Bertini Derezende Barbosa
	

	 	 	 	
 
	

	 	Name:	 	Marcelo Bertini Derezende Barbosa
	

	 	 	 	
 
	

	 	Title:	 	Director
	

	 	 	 	
 
	 
	 	 	 	 
	 	 	SELLERS:
	 
	 	 	 	 
	 	 	VENTURE II EQUITY HOLDINGS CORPORATION
	 
	 	 	 	 
	

	 	By:	 	/s/ Roberto Luz Portella
	

	 	 	 	
 
	

	 	Name:	 	Roberto Luz Portella
	

	 	 	 	
 
	

	 	Title:	 	Sole Director
	

	 	 	 	
 
	 
	 	 	 	 
	 	 	KRISTAL HOLDINGS LIMITED
	 
	 	 	 	 
	

	 	By:	 	/s/ Roberto Luz Portella
	

	 	 	 	
 
	

	 	Name:	 	Roberto Luz Portella
	

	 	 	 	
 
	

	 	Title:	 	Sole Director

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