SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------------
FORM T-3
FOR APPLICATIONS FOR QUALIFICATION
OF INDENTURES UNDER THE TRUST INDENTURE ACT OF 1939
-----------------------------
CINEMARK MEXICO (USA), INC.
CINEMARK DE MEXICO, S.A. DE C.V.
(Name of Applicant)
7502 Greenville Avenue, Suite 800
Dallas, Texas 75231
(Address of Principal Executive Offices)
-----------------------------
<TABLE>
<CAPTION>
SECURITIES ISSUED UNDER
THE INDENTURE TO BE QUALIFIED
Title of Class Amount
<S> <C>
12% Series A Senior Subordinated
P1K Notes due 2003 $662,600
12% Series B Senior Subordinated
P1K Notes due 2003 $33,129,100
12% Series C Senior Subordinated
P1K Notes due 2003 $2,168,200
12% Series D Senior Subordinated
P1K Notes due 2003 $2,168,200
</TABLE>
Approximate Date of Proposed Public Offering: On the effective date of the
applicant's supplemental indenture containing proposed amendments to the
applicant's existing indenture.
Name and Address of Agent
for Service of Process:
Lee Roy Mitchell
Cinemark Mexico (USA), Inc.
7502 Greenville Avenue, Suite 800
Dallas, Texas 75231
with a copy to:
Michael D. Cavalier
Associate General Counsel
Cinemark USA, Inc.
7502 Greenville Avenue, Suite 800
Dallas, Texas 75231
The applicant hereby amends this application for qualification on such date
or dates as may be necessary to delay its effectiveness until (i) the 20th day
after the filing of a further amendment which specifically states that it shall
supersede this amendment, or (ii) such date as the Securities and Exchange
Commission (the "Commission"), acting pursuant to Section 307(c) of the Trust
Indenture Act of 1939 (the "Act"), may determine upon the written request of the
applicant.
This Document Consists of 78 Pages
Exhibit Index Begins on Page 14
<PAGE>
GENERAL
1. General Information. Furnish the following as to the applicant:
(a) Form of organization: Cinemark Mexico (USA), Inc. (the "Company")
is a corporation.
(b) State or other sovereign power under the laws of which organized:
Texas
2. Securities Act Exemption Applicable. State briefly the facts relied
upon by the applicant as a basis for the claim that registration of the
indenture securities under the Securities Act of 1933 is not required.
The Company made an offer upon the terms and subject to the conditions
set forth in the Exchange Offer and Consent Solicitation dated August 30, 1996
filed herewith as Exhibit T3E-1 (the "Exchange Offer") and in the applicable
accompanying Consent and Letter of Transmittal, the form of which are filed
herewith as Exhibit T3E-2 (the "Letters of Transmittal" and together with the
Exchange Offer, the "Offers"), to exchange (i) with respect to each $1,000
principal amount of its 12% Series A Senior Subordinated Notes due 2003 (the
"Existing Series A Notes") outstanding in the aggregate principal amount of
$400,000, $1,000 principal amount of its 12% Series A Senior Subordinated PIK
Notes due 2003 (the "New Series A Notes") proposed to be outstanding in an
aggregate principal amount of $400,000, (ii) with respect to each $1,000
principal amount of its 12% Series B Senior Subordinated Notes due 2003 (the
"Existing Series B Notes") outstanding in the aggregate principal amount of
$20,000,000, $1,000 principal amount of its 12% Series B Senior Subordinated PIK
Notes due 2003 (the "New Series B Notes") proposed to be outstanding in an
aggregate original principal amount of $20,000,000, (iii) with respect to each
$1,000 principal amount of its 12% Series C Senior Subordinated Notes due 2003
(the "Existing Series C Notes") outstanding in the aggregate principal amount of
$2,000,000, $1,000 principal amount of its 12% Series C Senior Subordinated PIK
Notes due 2003 (the "New Series C Notes") proposed to be outstanding in an
aggregate original principal amount of $2,000,000 and (iv) with respect to each
issued and outstanding warrant to purchase one share of the common stock of the
Company the "Existing Warrants"), $3.757 original principal amount of its 12%
Series D Senior Subordinated PIK Notes due 2003 (the "New Series D Notes")
outstanding in an aggregate original principal amount of $1,422,800. The
Existing Series A Notes, the Existing Series B Notes and the Existing Series C
Notes are collectively referred to herein as the "Existing Notes", and the
Existing Notes and the Existing Warrants are collectively referred to herein as
the "Existing Securities." The New Series A Notes, the New Series B Notes, the
New Series C Notes and the New Series D Notes are collectively referred to
herein as the "New Securities". The Exchange Offer is being made only to the
registered holders of all outstanding Existing Securities (each a "Holder" and
collectively, the "Holders").
In conjunction with the Offers, the Company solicited (the "Consent
Solicitation") consents (the "Consents") to the adoption of Proposed Amendments
(as defined herein) to the Indenture dated as of July 30, 1993 between the
Company, Cinemark de Mexico, S.A. de C.V., as guarantor, and United States Trust
Company of New York as Trustee as amended by the First Supplemental Indenture
dated as of May 2, 1994 and the Second Supplemental Indenture dated as of August
30, 1995 (the "Indenture"). The Offers and Solicitations are part of a
refinancing plan (the "Refinancing Plan") pursued by the Company to enhance the
Company's, and its subsidiary Cinemark de Mexico, S.A. de C.V.'s, financial and
operating flexibility.
The proposed Amendments with respect to the Indenture (i) provide for
the issuance of the New Securities and (ii) extends the operation of certain
financial covenants (the "Proposed Amendments"). A third supplemental indenture
providing for the Proposed Amendments to the Indenture (the "Third Supplemental
Indenture") is filed herewith as Exhibit T3C-4. Holders who tendered their
Existing Securities in the Offers were obligated to consent to the Proposed
Amendments. Except as amended in the Third Supplemental Indenture, the
Indentures remain in full force and effect.
The Company relied on the exemption from registration under the
Securities Act provided by Section 3(a)(9) thereof ("Section 3(a)(9)"). Section
3(a)(9) exempts from the registration provisions of the Securities Act any
security exchanged by an issuer with its existing security holders exclusively
where no commission or other remuneration is paid or given directly or
2
<PAGE>
indirectly for soliciting such exchange. As discussed above, the New Securities
were exchanged for Existing Securities. Pursuant to the terms and conditions of
the Exchange Offer, the Offers and Solicitations were made only with respect to
current Holders. Holders will not make cash payments or pay any proceeds to the
Company in connection with the exchange of the Existing Securities for New
Securities. The Company has not paid and will not pay any commission or other
remuneration to any broker, dealer, salesman or other person for soliciting
Consents to the Proposed Amendments. Certain officers, directors and regular
employees of the Company, who will not receive additional compensation therefor,
may solicit Consents from Holders. Furthermore, there were no sales of the
Existing Securities by the Company or by or through an underwriter at or about
the same time as, or at any time during the pendency of, the time that the
Offers and the Solicitations are being made.
The Company retained United States Trust Company of Texas, N.A. as the
Exchange Agent in connection with the Offers and the Solicitations (the
"Exchange Agent"). The Exchange Agent accepted the tender of the Existing
Securities and received the Existing Securities, all Letters of Transmittal,
Notices of Guaranteed Delivery and other documents required to be delivered by
tendering Holders, establish book-entry transfer facilities as specified in the
Exchange Offer and perform certain incidental services. The Company has agreed
to pay the Exchange Agent for its reasonable out-of-pocket expenses in
connection therewith.
In connection with the Offers and the Solicitations, directors,
officers and regular employees of the Company (who will not be specifically
compensated for such services) solicited tenders and Consents by use of the
mails, personally or by telephone, telegram messages, or mailgram messages.
AFFILIATIONS
3. Affiliates. Furnish a list or diagram of all affiliates of the
applicant and indicate the respective percentages of voting securities or other
bases of control.
Cinemark International, Inc. (f/k/a Cinemark II, Inc., "Cinemark
International") holds 97.4% of the outstanding common stock of the Company (the
"Common Stock"), and as a result, has the power to control matters requiring
shareholder approval. Cinemark International is a wholly owned subsidiary of
Cinemark USA, Inc. Cinemark USA, Inc. is controlled by Mr. Lee Roy Mitchell, the
Chairman of the Board of the Company.
The following table and the accompanying footnotes set forth, as of
September 30, 1996, the beneficial ownership of the Company's common stock by
(i) each person who is known to the Company to own beneficially more than 5% of
the Company's outstanding common stock, (ii) each director of the Company and
Cinemark de Mexico and (iii) all officers and directors of the Company and
Cinemark de Mexico as a group:
<TABLE>
<S> <C> <C>
Number
of Percent
Names and Addresses(1) Shares of Shares
Cinemark International, Inc.(2) 4,500,969 97.4%
7502 Greenville Avenue
Suite 800, LB-9
Dallas, TX 75231
New Wave Corporation, A.V.V. 118,314 2.6%
c/o Mees Pierson Trust (Aruba) N.V.
P.O. Box 3889
Curacao, Netherlands Antilles
Lee Roy Mitchell(3) 4,500,969 97.4%
Tandy Mitchell(4) - -
3
<PAGE>
Alan W. Stock - -
Jeffrey J. Stedman - -
Guillermo (William) Jenkins(5) 118,314 6.1%
Heriberto Guerra - -
Margaret E. Richards - -
Directors and Officers as 4,500,969 100.0%
a Group (7 persons)
</TABLE>
(1) Unless otherwise indicated, the Company believes the beneficial owner has
both sole voting and investment powers over such shares.
(2) Cinemark International is a wholly owned subsidiary of Cinemark USA. See
the table on pages 4 and 5 of this application for a listing of the
beneficial ownership of Cinemark USA's common stock.
(3) The Company is a subsidiary of Cinemark International. Cinemark
Internatioanl is a wholly owned subsidiary of Cinemark USA. Mr. Mitchell, a
director of Cinemark USA, Cinemark International and the Company, is the
majority shareholder of Cinemark USA. As a result, Mr. Mitchell may be
deemed to beneficially own the 4,500,969 shares of the common stock owned
by Cinemark International. Mr. Mitchell disclaims beneficial ownership of
the common stock of the Company owned by Cinemark International.
(4) Excludes any shares owned by Mr. Mitchell that Mrs. Mitchell may be deemed
to own as a result of community property laws.
(5) Mr. Jenkins may be deemed to beneficially own shares of common stock of the
Company owned by New Wave Corporation, A.V.V. Mr. Jenkins disclaims
beneficial ownership of the common stock of the Company owned by New Wave.
The following table and the accompanying footnotes set forth, as of
September 30, 1996, the beneficial ownership of Cinemark USA, Inc.'s Common
Stock by (i) each person who is known to Cinemark USA, Inc. to own beneficially
more than 5% of either class of its outstanding Common Stock, (ii) each director
and named executive officer, and (iii) all officers and directors as a group:
<TABLE>
<CAPTION>
Number Combined
Title of of Percent Percent
Names and Addresses(1) Class Shares(2) of Class of Classes
<S> <C> <C> <C> <C>
Lee Roy Mitchell(3) Class A Common Stock 1,500 100%
7502 Greenville Avenue 42.8%
Suite 800, LB-9 Class B Common Stock 77,687 42.3%
Dallas, TX 75231
Cypress Merchant Banking Class A Common Stock
Partners L.P. 42.2%
65 East 55th St. Class B Common Stock 78,469 42.8%
New York, New York 10022
Cypress Pictures Ltd. Class A Common Stock
c/o W.S. Walker Company 2.2%
Second Floor Class B Common Stock 4,079 2.2%
Caledonian House
Mary Street, P.O. Box 265
George Town, Grand Cayman
Cayman Islands
The Mitchell Special Trust Class A Common Stock - -
7502 Greenville Avenue 7.9%
Suite 800, LB-9 Class B Common Stock 14,667 8%
Dallas, TX 75231
4
<PAGE>
Number Combined
Title of of Percent Percent
Names and Addresses(1) Class Shares(2) of Class of Classes
Tandy Mitchell(4) Class A Common Stock - -
-
Class B Common Stock - -
Alan W. Stock(5) Class A Common Stock - -
*
Class B Common Stock 1,710 *
Jeffrey J. Stedman(6) Class A Common Stock - -
Class B Common Stock 280 *
*
Gary R. Gibbs(7) Class A Common Stock - - *
*
Class B Common Stock 600 *
Margaret E. Richards (8) Class A Common Stock -
Class B Common Stock 534 * *
W. Bryce Anderson Class A Common Stock - -
-
Class B Common Stock - -
Sheldon I. Stein Class A Common Stock - -
-
Class B Common Stock - -
Heriberto Guerra, Jr. Class A Common Stock - - -
Class B Common Stock - - -
James A. Stern Class A Common Stock - - -
Class B Common Stock - - -
James L. Singleton Class A Common Stock - - -
Class B Common Stock - - -
Directors and Officers as Class A Common Stock 1,500 100.0%
a Group (13 Persons) (9) 44.6%
Class B Common Stock 81,638 44.1%
</TABLE>
- ---------------------
* Less than 1%.
(1) Unless otherwise indicated, the Company believes the beneficial owner has
both sole voting and investment powers over such shares.
(2) As of September 30, 1996, 1,500 shares of Class A Common Stock and 183, 574
shares of Class B Common Stock were issued and outstanding. Includes 7,254
shares of Class B Common Stock issuable upon the exercise of options that
may be exercised within 60 days of the date of this application.
(3) Does not include 15,937 shares of Class B Common Stock held in trust for
the benefit of certain of Mr. Mitchell's grandchildren, as to which Mr.
Mitchell disclaims beneficial ownership. Mr. Mitchell is the co- trustee of
such trusts.
(4) Excludes any shares owned by Mr. Mitchell that Mrs. Mitchell may be deemed
to own as a result of community property laws.
(5) Includes 1,817 shares of Class B Common Stock issuable upon the exercise of
options that may be exercised within 60 days of the date of this
application.
(6) Includes 205 shares of Class B Common Stock issuable upon the exercise of
options that may be exercised within 60 days of the date of this
application.
(7) Includes 510 shares of Class B Common Stock issuable upon the exercise of
options that may be exercised within 60 days of the date of this
application.
(8) Includes 453 shares of Class B Common Stock issuable upon the exercise of
options that may be exercised within 60 days of the date of this
application
5
<PAGE>
(9) Includes 3,406 shares of Class B Common Stock issuable upon the exercise of
options that may be exercised within 60 days of the date of this
application
The following list sets forth all the wholly-owned or controlled
subsidiaries of the Company. All of the voting securities of each such
subsidiary are owned directly or indirectly by the Company.
Names of Wholly-owned or Controlled Subsidiaries of the Company:
Cinemark de Mexico, S.A. de C.V.
Servicios Cinemark, S.A. de C.V.
Cinemark del Norte, S.A. de C.V.
MANAGEMENT AND CONTROL
4. Directors and Executive Officers. List the names and complete mailing
addresses of all directors and executive officers of the applicant and all
persons chosen to become directors or executive officers. Indicate all offices
with the applicant held or to be held by each person named.
Present Position(s)
Name Age with the Company
Lee Roy Mitchell 59 Vice Chairman of the Board; Chief
Executive Officer; Director
Alan W. Stock 36 President; Chief Operating Officer;
Director
Tandy Mitchell 46 Chairman of the Board; Secretary;
Director
Jeffrey J. Stedman 34 Vice President; Treasurer; Chief
Financial Officer; Assistant Secretary
Margaret E. Richards 37 Vice President-Real Estate; Assistant
Secretary
Guillermo (William) Jenkins 64 Director
Heriberto Guerra, Jr. 46 Director
The mailing address of the directors and executive officers of the
Company is 7502 Greenville Avenue, Suite 800, Dallas, Texas 75231.
5. Principal Owners of Voting Securities. Furnish the following information
as to each person owning 10 percent or more of the voting securities of the
applicant.
As of the date of filing of this Form T-3, Cinemark International holds
97.4% of the issued and outstanding Common Stock (4,500,969 shares) of the
Company. By virtue of such ownership, Cinemark International has the power to
control matters requiring shareholder approval, including the power to designate
a majority of the Company's Board of Directors. Cinemark International's mailing
address is 7502 Greenville Avenue, Suite 800, Dallas, Texas 75231.
UNDERWRITERS
6. Underwriters. Give the name and complete mailing address of (a) each
person who, within three years prior to the date of filing the application,
acted as an underwriter of any securities of the obligor which were outstanding
on the date of filing the application, and (b)
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<PAGE>
each proposed principal underwriter of the securities proposed to be offered. As
to each person specified in (a), give the title of each class of securities
underwritten.
(a) Within three years prior to the date of filing of this Form T-3, no
person has acted as an underwriter of any securities of the Company which are
outstanding on the date of filing of this Form T-3.
(b) There was no underwriter for the New Securities.
CAPITAL SECURITIES
7. Capitalization. (a) Furnish the following information as to each
authorized class of securities of the applicant.
The securities of the Company outstanding as of the date of filing of
this Form T-3 were as follows:
<TABLE>
<CAPTION>
Amount Amount
Title of Class Authorized Outstanding
<S> <C> <C> <C>
Common Stock, $.001 par 100,000,000shares 4,500,969 shares
value
Warrants to Purchase N/A 22,222 warrants
Shares of Common Stock
12% Series A Senior $662,600 $434,400
Subordinated PIK Notes due 2003
12% Series B Senior $33,129,100 $21,761,100
Subordinated PIK Notes due 2003
12% Series C Senior $3,313,000 $2,176,000
Subordinated PIK Notes due 2003
12% Series D Senior $2,168,200
$1,422,800
Subordinated PIK Notes due 2003
</TABLE>
The Outstanding warrants, issued July 30, 1993 which permit the holder,
upon the occurance of certainevents to purchase shares or Common Stock of the
Company at an initial exercise price of $.01 per share, subject to certain
adjustments.
(b) Give a brief outline of the voting rights of each class of voting
securities referred to in paragraph (a) above.
Holders of shares of Common Stock are entitled to one vote for each share
owned on any matter on which a holder of shares of Common Stock is entitled to
vote, and no shares have cumulative voting rights. Holders of the Existing
Securities do not have any voting rights by reason of ownership of those
securities.
Pursuant to a Shareholders Agreement dated as of July 30, 1993 among the
Company Cinemark Entertainment and New Wave A.V.V., Cinemark International
agreed to vote for the election of William Jenkins to the Board of Directors of
the Company.
7
<PAGE>
INDENTURE SECURITIES
8. Analysis of Indenture Provisions. Insert at this point the analysis of
indenture provisions required under Section 305(a)(2) of the Act.
Items (a) through (e) below set forth only the provisions of the
Indenture required to be analyzed by Section 305(a)(2) of the Act. The following
does not purport to set forth all of the provisions of the Indenture. Reference
is made to the full provisions of the Indenture for a complete description of
the provisions of the Indenture. Capitalized terms used herein and not otherwise
defined shall have the same meaning ascribed to them in the New Notes Indenture.
(a) Events of Default. Pursuant to Section 5.1 of the Indenture,
Events of Default under the Indenture occur if:
(1) default in the payment of any interest upon any Security when
it becomes due and payable, and continuance of such default for a period
of 30 days; or
(2) default in the payment of the principal of (or premium, if
any, on) any Security at its Maturity; or
(3) default in the performance, or breach, of Section 10.14 and
the continuance of such default for 60 days after the end of any two
consecutive fiscal quarters that do not coincide with the end of the
Company's fiscal year or 105 days after the end of any two consecutive
fiscal quarters that coincide with the end of the Company's fiscal year;
or
(4) default in the payment of principal and interest pursuant to
an Offer to Purchase pursuant to Sections 10.11, 10.13 and 10.18; or
(5) default in the performance, or breach, of Section 8.1; or
(6) default in the performance, or breach, of any covenant,
representation or warranty of the Company in this Indenture (other than a
covenant or warranty a default in whose performance or whose breach is
elsewhere in this Section specifically dealt with) and continuance of
such default or breach for a period of 30 days after there has been
given, by registered or certified mail, to the Company by the Trustee or
to the Company and the Trustee by the Holders of at least 25% in
principal amount of the Outstanding Securities a written notice
specifying such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder; or
(7) a default or defaults under any bond(s); debenture(s), note(s)
or other evidence(s) or indebtedness by the Company or any Subsidiary of
the Company or under any mortgage(s), indenture(s) or instrument(s) under
which there may be issued or by which there may be secured or evidenced
any indebtedness of such type by the Company or any such Subsidiary with
a principal amount then outstanding, individually or in the aggregate, in
excess of $1 million, whether such indebtedness now exists or is created
hereafter, which default shall constitute a failure to pay principal of
such indebtedness when due at the final maturity thereof or shall have
resulted in such indebtedness becoming or being declared due and payable
prior to the date on which it would otherwise have become due and
payable; or
(8) a final judgment or final judgments for the payment of money
are entered against the Company or any Subsidiary in an aggregate amount
in excess of $1 million by a court or courts of competent jurisdiction,
which judgments remain undischarged, unstayed or unbonded for a period
(during which execution shall not be effectively stayed) of 60 days after
the right to appeal all such judgments has expired; or
(9) the entry by a court having jurisdiction in the premises of
(A) a decree or order for relief in respect of the Company or any of its
Subsidiaries whose aggregate assets constitute more than 10% of the
assets of the consolidated group ("Material Subsidiaries") in an
involuntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or (B) a
decree or order adjudging the Company or any of its Material Subsidiaries
a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of
8
<PAGE>
or in respect of the Company or any of its Material Subsidiaries or of
any substantial part of its property, or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree or
order for relief or any such other decree or order unstayed and in effect
for a period of 90 consecutive days;
(10) the commencement by the Company or any of its Material
Subsidiaries of a voluntary case or proceeding under any applicable
Federal or State bankruptcy, insolvency, reorganization or other similar
law or of any other case or proceeding to be adjudicated a bankrupt or
insolvent, or the consent by it to the entry of a decree or order for
relief in respect of the Company or any of its Material Subsidiaries in
an involuntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against
it, or the filing by it of a petition or answer or consent seeking
reorganization or relief under any applicable Federal or State law, or
the consent by it to the filing of such petition or to the appointment of
or taking possession by a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of the Company or any of
its Material Subsidiaries or of any substantial part of its property, or
the making by it of an assignment for the benefit of creditors, or the
admission by it in writing of its inability to pay its debts generally as
they become due, or the taking of corporate action by the Company or any
of its Material Subsidiaries in furtherance of any such action; or
(11) any Guaranty shall cease to be in full force and effect
(except as contemplated by the terms thereof) or any Guarantor shall deny
or disaffirm its obligations under its Guaranty.
Section 5.2 of the Indenture provides that an Event of Default (other
than an Event of Default specified in Section 5.1(8) or (9)) occurs and is
continuing, then and in every such case the Trustee or the Holders of not less
than 25% in principal amount of the Outstanding Securities may declare the
Default Amount of all the Securities to be due and payable immediately, by a
notice in writing to the Company and to the Trustee if given by Holders), and
upon any such declaration such Default Amount and any accrued interest shall,
subject to Section 16.1 hereof, become immediately due and payable. If an Event
of Default specified in Section 5.1(8) or (9) occurs, the Default Amount of and
any accrued interest on the Securities then Outstanding shall, subject to
Section 16.1 hereof, become immediately due and payable without any declaration
or other Act on the part of the Trustee or any Holder.
In respect of any particular Security, the "Default Amount" shall equal
the Accreted Value of such Security as of any particular date of acceleration
thereafter.
At any time after such a declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter in this Article provided, the Holders of a majority
in principal amount of the Outstanding Securities, by written notice to the
Company and the Trustee, may rescind and annul such declaration and its
consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Securities,
(B) the principal of (and premium, if any, on) any
Securities which have become due otherwise than by such
declaration of acceleration (including any Securities required to
have been purchased on the Purchase Date pursuant to an Offer to
Purchase made by the Company) and interest thereon at the rate
provided by the Securities (but not to exceed the maximum rate
permitted by applicable law),
(C) interest upon overdue interest at the rate provided by
the Securities but not to exceed the maximum rate permitted by
applicable law, and
(D) all sums paid or advanced by the Trustee hereunder and
the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel; and
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<PAGE>
(2) all Events of Default, other than the non-payment of the
principal of Securities which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 5.13.
No such rescission shall affect any subsequent default or impair any
right consequent thereon.
(b) Execution and Authentication. Section 3.3 of the Indenture provides
that the Securities shall be executed on behalf of the Company by its Chairman
of the Board, any Vice Chairman, its President or one of its Vice Presidents,
under its corporate seal reproduced thereon attested by its Secretary or one of
its Assistant Secretaries. The signature of any of these officers on the
Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities executed by the Company to
the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities; and the Trustee in accordance
with such Company Order shall authenticate and deliver such Securities as in
this Indenture provided and not otherwise.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Series B Securities executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Series B Securities and a like principal
amount of Series A Securities for cancellation in accordance with Section 2.9 of
this Indenture, and the Trustee in accordance with the Company Order shall
authenticate and deliver such Securities. In authenticating such Series B
Securities, and accepting the additional responsibilities under this Indenture
in relation to such Securities, the trustee shall be entitled to receive, and
(subject to Section 6.1) shall be fully protected in relying upon, an Opinion of
Counsel stating:
(1) that such Series B Securities have been duly and validly
issued in accordance with the terms of this Indenture, and are entitled
to all the rights and benefits set forth herein; and
(2) that the issuance of the Series B Securities in exchange for
the Series A Securities has been effected in compliance with the
registration requirements of the Securities Act of 1933, as amended, and
that the Indenture has been duly qualified under the Trust Indenture Act.
If such form or terms have been so established, the Trustee shall be
required to authenticate such Series B Securities unless the issue of such
Series B Securities pursuant to this Indenture will affect the Trustee's own
rights, duties or immunities under the Series B Securities and this Indenture or
otherwise in a manner which is not acceptable to the Trustee.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder.
There will be no proceeds from the exchange of the New Securities for the
Existing Securities.
(c) Termination of Guaranty. Section 15.3 of the Indenture provides that
concurrently with any sale, lease, transfer or other disposition permitted by
and in accordance with the terms of this Indenture (other than to the Company or
any Affiliate of the Company), by way of merger,
10
<PAGE>
consolidation or otherwise, of all or substantially all of the assets of a
Guarantor or all of the Capital Stock of a Guarantor owned by the Company and
its Affiliates, such Guarantor (in the event of such a sale, lease, transfer or
other disposition of all such Capital Stock) or the corporation acquiring the
property (in the event of such a sale, lease, transfer or other disposition, by
way of a merger, consolidation or otherwise, of all or substantially all of the
assets of such Guarantor) shall be released and relieved of its Guaranty
Obligations. Upon delivery by the Company to the Trustee of any Officers'
Certificate and an Opinion of Counsel to the effect that such sale, lease,
transfer or other disposition was made by the Company as permitted by and in
accordance with the provisions of this Indenture, the Trustee shall execute any
documents reasonably required to evidence the release of such Guarantor from its
Guaranty Obligations.
(d) Satisfaction and Discharge. Sections 4.1 and 4.2 of the Indenture
provide that this Indenture shall cease to be of further effect (except as to
any surviving rights of registration of transfer or exchange of Securities
herein expressly provided for), and the Trustees, on demand of and at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture (including, but not limited to,
Article XII hereof), when
(1) either
(A) all Securities theretofore authenticated and delivered (other
than (i) Securities which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section 3.6 and (ii) Securities
for whose payment money has theretofore been deposited in trust and
thereafter repaid to the Company or discharged from such trust, as
provided in Section 10.3) have been delivered to the Trustee for
cancellation; or
(B) all such Securities not theretofore delivered to the Trustee
for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity
within one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice
of redemption by the Trustee in the name, and at the expense, of
the Company, and the Company, in the case of (i), (ii) or (iii)
above, has deposited or caused to be deposited with the Trustee as
trust funds in trust for the purpose an amount sufficient to pay
and discharge the entire indebtedness on such Securities not
theretofore delivered to the Trustee for cancellation, for
principal (and premium, if any) and interest to the date of such
deposit (in the case of Securities which have become due and
payable) or to the Stated Maturity or Redemption Date, as the case
may be and at the time of such deposit the condition on clause
(10) of Section 13.4 is satisfied;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture have
been complied with.
Notwithstanding the satisfaction and discharge of this Indenture pursuant to
this Article IV, the obligations of the Company to the Trustee under Section 6.7
and, if money shall have been deposited with the Trustee pursuant to subclause
(B) of Clause (1) of this Section, the obligations of the Trustee under Section
4.2 and the last paragraph of Section 10.3 shall survive.
(e) Compliance Certificate. Section 10.19 of the Indenture provides as
follows:
(1) The Company will deliver to the Trustee, within 90 days after
the end of each fiscal year of the Company ending after the date hereof,
an Officers' Certificate, stating whether or not to the knowledge of the
signers thereof the Company is in default in the performance and
observance of any of the terms, provisions and conditions of Section 8.1
and Sections 10.4 to 10.18, inclusive, and if the Company shall be in
default, specifying all such defaults and the nature and status thereof
of which they may have knowledge.
11
<PAGE>
(2) The Company shall deliver to the Trustee, as soon as possible
and in any event within 10 days after the Company becomes aware of the
occurrence of an Event of Default or an event which, with notice or the
lapse of time or both, would constitute an Event of Default, an Officers'
Certificate setting forth the details of such Event of Default or
default, and the action which the Company proposes to take with respect
thereto.
9. Other Obligors. Give the name and complete mailing address of any person,
other than the applicant, who is an obligor upon the indenture securities.
Cinemark de Mexico, S.A. de C.V., a subsidiary of the Company ("Cinemark
de Mexico"), is the guarantor under the Indenture. Cinemark de Mexico's address
is 7502 Greenville Avenue, Suite 800, Dallas, Texas 75231.
Contents of Application for Qualification. This application for qualification
comprises:
(a) Pages numbered 1 to 78, consecutively.
(b) The Statement of Eligibility and Qualification of United States Trust
Company of New York, as trustee under the New Securities to be qualified.
(c) The following exhibits in addition to those filed as part of the
Statement of Eligibility and Qualification of the trustee.
EXHIBIT T3A - Articles of Incorporation of the Company.
EXHIBIT T3B - Bylaws of the Company.
EXHIBIT T3C-1 - Indenture dated as of July 30, 1993, between the Company,
Cinemark de Mexico and United States Trust Company of New York, as
Trustee.
EXHIBIT T3C-2 - First Supplemental Indenture dated as of May 2, 1994,
between the Company, Cinemark de Mexico and United States Trust Company
of New York, as Trustee.
EXHIBIT T3C-3 - Second Supplemental Indenture dated as of August 30, 1995
between the Company, Cinemark de Mexico and United States Trust Company
of New York, as Trustee.
EXHIBIT T3C-4 - Third Supplemental Indenture dated as of September 30,
1996 between the Company, Cinemark de Mexico and United States Trust
Company of New York, as trustee.
EXHIBIT T3D - Not Applicable.
EXHIBIT T3E-1 - Exchange Offer and Consent Solicitation.
EXHIBIT T3E-2- Form of Consent and Letter of Transmittal to holders of
the Company's 12% Series A Senior Subordinated Notes due 2003, 12% Series
B Senior Subordinated Notes due 2003, 12% Series C Senior Subordinated
Notes due 2003, and warrants to
purchase common stock of the Company.
EXHIBIT T3E-3 - Form of Notice of Guaranteed Delivery to be provided to
holders of the Company's 12% Series A Senior Subordinated Notes due 2003
same, 12% Series B Senior Subordinated Notes due 2003, 12% Series C
Senior Subordinated Notes due 2003, and warrants to purchase common stock
of the Company.
EXHIBIT T3F - A cross reference sheet showing the exact location of the
provisions of the Indenture inserted therein pursuant to Section 310
through 318(A), inclusive, of the Act.
12
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the applicant, Cinemark Mexico (USA), Inc., a corporation organized and
existing under the laws of the State of Texas, has duly caused this application
to be signed on its behalf by the undersigned, thereunto duly authorized, and
its seal to be hereunto affixed and attested, all in the City of Dallas, Texas
on the 10th day of October, 1996.
(SEAL)
CINEMARK MEXICO (USA), INC.
By /s/ Alan W. Stock
Name: Alan W. Stock
Title: President
By /s/ Jeffrey J. Stedman
Name: Jeffrey J. Stedman
Title: Treasurer and Chief Financial Officer
Attest:
/s/ Tandy Mitchell
Name: Tandy Mitchell
Title: Secretary
13
<PAGE>
EXHIBIT INDEX
EXHIBIT NO.
EXHIBIT
PAGE
EXHIBIT T3A
Articles of Incorporation of the Company........................................
Exhibit 3.1 to the
Company's
Registration
Statement (33-
72114) on Form
S-4 fo;ed pm
November 24,
1994.
EXHIBIT T3B
Bylaws of the Company...........................................................
Exhibit 3.2 tp tje
Company's
Registration
Statement (33-
72114) on Form
S-4 filed on
November 24,
1994.
EXHIBIT T3C-1
Indenture dated as of July 30, 1993 between
the Company, Cinemark de Mexico and United
States Trust Company of N.A., as Trustee........................................
Exhibit 4.1 to the Company's Registration Statement (33- 72114) on Form S-4
filed on November 24, 1994.
EXHIBIT T3C-2
First Supplemental Indenture dated as of May
2, 1994, between the Company, Cinemark de
Mexico and United States Trust Company of
New York, as Trustee............................................................
Exhibit 4.7 to the Company's Annual Report (33-72114) on Form 10-K filed on
March 27, 1995.
EXHIBIT T3C-3
Second Supplemental Indenture dated as of
August 30, 1995 between the Company,
Cinemark de Mexico and United States Trust
Company of New York, as Trustee.................................................
Exhibit 4.4 (b) to
the Company's
Annual Report
(33-72114) on
Form 10-K filed
on April 1, 1996
EXHIBIT T3C-4
Third Supplemental Indenture dated as of
September 30, 1996 between the Company,
Cinemark de Mexico and United States Trust
Company of New York, as trustee.................................................
Page_______
14
<PAGE>
EXHIBIT T3D
Not Applicable..................................................................
EXHIBIT T3E-1
Exchange Offer and Consent Solicitation.........................................
Page_______
EXHIBIT T3E-2
Form of Consent and Letter of Transmittal to holders of the Company's 12% Series
A Senior Subordinated Notes due 2003, 12% Series B Senior Subordinated Notes due
2003, 12% Series C Senior Subordinated Notes due 2003 and warrants to purchase
common stock of the
Company.........................................................................
Page_______
EXHIBIT T3E-3
Form of Notice of Guaranteed Delivery to be provided to holders of the Company's
12% Series A Senior Subordinated Notes due 2003, 12% Series B Senior
Subordinated Notes due 2003, 12% Series C Senior Subordinated Notes due 2003 and
warrants to purchase common
stock of the Company............................................................
Page_______
EXHIBIT T3F
A cross reference sheet showing the exact
location of the provisions of the Indenture
inserted therein pursuant to Section 310
through 318(A), inclusive, of the Act (included
as part of Exhibit T3C-1) . . . . . . . . . . . . .
L:\LEGAL\MDC\CMEXUSA\FORMT-3.001
15
<PAGE>
EXHIBIT T3C-4
==============================================================================
CINEMARK MEXICO (USA), INC.
Issuer,
CINEMARK DE MEXICO, S.A. de C.V.
Guarantor
AND
UNITED STATES TRUST COMPANY OF NEW YORK
as Trustee
--------------------------------
THIRD SUPPLEMENTAL INDENTURE
Dated as of September 30, 1996
--------------------------------
12% Senior Subordinated PIK Notes
due 2003
==============================================================================
16
<PAGE>
THIRD SUPPLEMENTAL INDENTURE
THIS THIRD SUPPLEMENTAL INDENTURE (the "Third Supplemental Indenture"),
dated as of September 30, 1996, among Cinemark Mexico (USA), Inc., a Texas
corporation (the "Issuer"), Cinemark de Mexico, S.A. de C.V., a Mexican
corporation (the "Guarantor"), and United States Trust Company of New York, as
Trustee (the "Trustee").
RECITALS
A. Issuer, Guarantor and the Trustee executed an indenture, dated as of
July 30, 1993 (the "Original Indenture"), relating to the Issuer's 12% Senior
Subordinated Notes due 2003 (the "Securities"), which was amended by (i) the
First Supplemental Indenture dated as of May 2, 1994 (the "First Supplemental
Indenture") and (ii) the Second Supplemental Indenture dated as of August 30,
1995 (the "Second Supplemental Indenture") (the original Indenture as amended by
the First Supplemental Indenture and the Second Supplemental Indenture is
hereinafter referred to as the "Indenture").
B. Issuer and Guarantor, with the consent of holders of more than 50%
of the aggregate principal amount of the Securities outstanding, exclusive of
any Securities owned by Issuer, Guarantor or their respective affiliates, desire
to amend and/or restate certain Sections of the Indenture in connection with the
creation of a new Series D of the Securities and the increase of the maximum
original principal amount of Securities that may be issued, authenticated and
delivered under the Indenture.
C. The holders of all of the aggregate principal amount of the
Securities outstanding, exclusive of the Securities owned, if any, by Issuer,
Guarantor or their respective affiliates, desire to exchange (the "Exchange")
their respective Securities for new promissory notes (the "Exchange Notes"). The
Exchange Notes shall contain provisions permitting the Issuer to elect, for the
period through and including February 1, 2000, to pay all accrued and unpaid
interest on each interest payment date by issuing additional notes of the same
series (the "Additional Securities") in an aggregate principal amount equal to
the interest that would have been payable during such period assuming the
principal on the applicable Securities accrued interest for such period at an
interest rate equal to 13% per annum.
D. Issuer and Guarantor, with the consent of holders of all of the
aggregate principal amount of the Securities now outstanding, exclusive of any
Securities owned by Issuer, Guarantor and their respective affiliates, desire to
amend and/or restate certain Sections of the Indenture in connection with the
Exchange.
E. All conditions precedent provided for in the Indenture relating to
this Third Supplemental Indenture have been complied with. Capitalized items
used herein shall have the meanings assigned to them in the Indenture unless
otherwise defined herein.
NOW, THEREFORE, THIS THIRD SUPPLEMENTAL INDENTURE WITNESSETH,
that for and in consideration of the premises and of the covenants contained
herein, the Issuer and Guarantor hereby covenant and agree with the Trustee, for
the equal benefit of all the present and future holders of the Securities
without preference, priority or distinction of any of the Securities over any of
the others by reason of priority in time of issuance, negotiation or maturity
thereof, or otherwise, and for the benefit of the Trustee and its successors and
assigns, as follows:
ARTICLE I
AMENDMENTS TO INDENTURE
1.1 Amendment to Recitals. The first paragraph of THE RECITALS OF
THE COMPANY is hereby amended and restated in its entirety as follows:
The Company has duly authorized the creation of an issue of
up to $39,272,900 aggregate original principal amount of its (a) 12%
Series A Senior Subordinated Notes due 2003 (the "Series A
Securities"), (b) 12% Senior Subordinated Notes due 2003 (the "Series B
Securities"), 12% Series C Senior Subordinated Notes due 2003 (the
"Series C Securities"), (d) 12% Series D Senior Subordinated Notes due
2003 (the "Series D
17
<PAGE>
Securities" and, collectively with the Series A Securities, the Series
B Securities and the Series C Securities, the "Securities") of
substantially the tenor and amount hereinafter set forth, and to
provide therefor the Company has duly authorized the execution and
delivery of this Indenture.
1.2 Amendments to Section 1.1
(a) Definition of "Accreted Value". The definition of
"Accreted Value" in Section 1.1 of the Indenture is hereby amended and rested in
its entirety to read as follows:
"Accreted Value" as of any date from and after
September 30, 1996, shall mean the aggregate principal amount of any
Securities Outstanding.
(b) Definitions. The following definitions are hereby
added after the definition of "Additional Interest" in Section 1.1 of the
Indenture.
"Additional Securities" means the Additional
Series A Securities, the Additional Series B Securities, the Additional
Series C Securities or the Additional Series D Securities, as
applicable.
"Additional Series A Securities" means the
additional Series A Securities issued on an Interest Payment Date in lieu of
making a cash interest payment on the Series A Securities pursuant to Section
2.2.
"Additional Series B Securities" means the
additional Series B Securities issued on an Interest Payment Date in lieu of
making a cash interest payment on the Series B Securities pursuant to Section
2.2.
"Additional Series C Securities" means the
additional Series C Securities issued on an Interest Payment Date in lieu of
making a cash interest payment on the Series C Securities pursuant to Section
2.2.
"Additional Series D Securities" means the
additional Series D Securities issued on an Interest Payment Date in lieu of
making a cash interest payment on the Series D Securities pursuant to Section
2.2.
(c) Definition of "Credit Agreement". The first
sentence of the definition of Credit Agreement shall be amended and restated to
read as follows:
"Credit Agreement" means any credit agreement or agreements
which the Company or any Subsidiary shall enter into which provide
credit facilities to the Company or such Subsidiary and their
Subsidiaries in an aggregate original principal amount not to exceed
$10,000,000, plus any accrued interest (including accrued interest
added to such principal amount outstanding), penalties, reimbursements
or indemnity accounts, fees accruing thereon, and interest accruing on
or after the filing of any petition in bankruptcy or for reorganization
relating to the Company or such Subsidiary, whether or not such claim
for post-election interest is allowed in such proceeding."
(d) Definition of "Fractional Additional Securities".
The following is hereby added after the definition of "Expiration Date" in
Section 1.1 of the Indenture:
"Fractional Additional Securities" means
Additional Securities the principal amount of which would be less than $100.00.
(e) Definition of "Securities". The definition of
"Securities" in Section 1.1 of the Indenture is hereby amended and restated in
its entirety as follows:
"Securities" means the Series A Securities, the
Series B Securities, the Series C Securities and the Series D
Securities designated as such in the first paragraph of
18
<PAGE>
the RECITALS OF THE COMPANY, including the Additional Securities issued
with respect to each series of such Securities.
(f) Definition of "Series D Securities". The following
is hereby added after the definition of "Series C Securities" in Section 1.1 of
the Indenture.
"Series D Securities" means the Series D
Securities designated as such in the first paragraph of the RECITALS OF
THE COMPANY.
1.3 Amendment to Section 2.2.
(a) The following is hereby added after the sixth paragraph
of Section 2.2 of the Indenture:
"If Series D Securities, then insert 12% Series D Senior
Subordinated PIK Notes due 2003.
(b) The seventh paragraph of Section 2.2 of the Indenture is
hereby amended and restated in its entirety as follows:
"Cinemark Mexico (USA), Inc., a corporation duly organized
and existing under the laws of Texas (herein called the "Company",
which term includes any successor Person under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
______________________________, or registered assigns, the principal of
this Security in an amount equal to the sum of $__________ Dollars on
August 1, 2003, and to pay interest on the unpaid principal amount from
the most recent date to which interest has been paid or, if no interest
has been paid, from the date of the original issuance hereof, at the
rate of 12% per annum until the principal hereof is paid or made
available for payment and at the rate of 12% per annum on any overdue
principal and premium and on any overdue installment of interest (but
not to exceed the maximum rate permitted by applicable law) until paid
as specified on the reverse hereof. The Company shall pay interest
semi-annually on August 1 and February 1 of each year, commencing
February 1, 1997 or if any such day is not a Business Day, on the next
succeeding Business Day (each an "Interest Payment Date"). On any
Interest Payment Date through and including February 1, 2000, the
Company may, at its option, by giving the Holder of such Security and
the Trustee notice of its election not less than 5 days nor more than
45 days prior to the record date for the related Interest Payment Date,
pay interest on the Security either in cash (at the rate specified
above) or through the issuance of Additional Securities in an aggregate
principal amount equal to the amount of interest that would have been
payable if such Security had accrued interest during the relevant
interest period at the rate of 13% per annum. The interest so payable,
and punctually paid or duly provided for, on any Interest Payment Date
will, as provided in such Indenture, be paid to the Person in whose
name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the July 15th or January 15th (whether or not
a Business Day), as the case may be, next preceding such Interest
Payment Date. Any such interest not so punctually paid or duly provided
for will forthwith cease to be payable to the Holder on such Regular
Record Date and may either be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the
close of business on a Special Record Date for payment of such
Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Securities not less than 10 days prior to such
Special Record Date, or be paid at any time in any other lawful manner
not inconsistent with the requirements of any securities exchange on
which the Securities may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in said
Indenture. On each such Interest Payment Date when the Company elects
to issue Additional Securities, the Trustee shall, upon the Company's
order, authenticate and deliver Additional Securities for original
issuance to the Holder of this Security on the relevant record date, as
shown by the records of the Security Register, in the aggregate
principal amount required to pay such interest; provided, however, that
in lieu of the issuance of any Additional Securities as set forth
above, the Company shall pay the holder of a Fractional Additional
Security an amount in cash equal to the Fractional Additional Security.
Any Additional Securities so issued shall
19
<PAGE>
be dated the applicable Interest Payment Date, shall bear interest from
and after such date, shall mature on August 1, 2003 and shall be
governed by, and subject to the terms, provisions and conditions of,
such Indenture and shall have the same rights and benefits as this
Security."
1.4 Amendment to Section 2.3. (a) The first paragraph of Section
2.3 of the Indenture is hereby amended and restated in its entirety as follows:
This Security is one of a duly authorized issue of Securities
of the Company designated as its [If Series A Securities, then insert
-- 12% Series A Senior Subordinated PIK Notes due 2003 (the "Series A
Securities") issued under an Indenture, dated as of July 30, 1993, as
amended (herein called the "Indenture"), between the Company and the
United States Trust Company of New York, as Trustee (herein called the
"Trustee", which term includes any successor trustee under the
Indenture), together with the 12% Series B Senior Subordinated PIK
Notes due 2003 of the Company (the "Series B Securities"), the 12%
Series C Senior Subordinated PIK Notes due 2003 (the "Series C
Securities") and the 12% Series D Senior Subordinated PIK Notes due
2003 (the "Series D Securities", and collectively with the Series A
Securities, the Series B Securities and the Series C Securities, the
"Securities").] [If Series B Securities, then insert -- 12%Series B
Senior Subordinated PIK Notes due 2003 (the "Series B Securities")
issued under an Indenture, dated as of July 30, 1993, as amended
(hereinafter called the "Indenture"), between the Company and the
United States Trust Company of New York, as Trustee (herein called the
"Trustee"), which term includes any trustee under the Indenture),
together with the 12% Series A Senior Subordinated PIK Notes due 2003
of the Company (the "Series A Securities"), the 12% Series C Senior
Subordinated PIK Note due 2003 of the Company (the "Series C
Securities"), and the 12% Series D Senior Subordinated PIK Notes due
2003 of the Company (the "Series D Securities", and collectively with
the Series A Securities, Series B Securities and Series C Securities,
the "Securities").] [If Series C Securities, then insert -- 12% Series
C Senior Subordinated PIK Notes due 2003 (the "Series C Securities")
issued under an Indenture, dated as of July 30, 1993, as amended
(herein called the "Indenture"), between the Company and the United
States Trust Company of New York, as Trustee (herein called the
"Trustee", which term includes any successor trustee under the
Indenture), together with the 12% Series A Senior Subordinated PIK
Notes due 2003 of the Company (the "Series A Securities"), the 12%
Series B Senior Subordinated PIK Notes due 2003 of the Company (the
"Series B Securities") and the 12% Series D Senior Subordinated PIK
Notes due 2003 (the "Series D Securities", and collectively with the
Series A Securities, the Series B Securities and the Series C
Securities, the "Securities").] [If Series D Securities, then insert --
12% Series D Senior Subordinated PIK Notes due 2003 (the "Series D
Securities") issued under an Indenture, dated as of July 30, 1993, as
amended (herein called the "Indenture"), between the Company and the
United States Trust Company of New York, as Trustee (herein called the
"Trustee", which term includes any successor or trustee under the
Indenture), together with the 12% Series A Senior Subordinated PIK
Notes due 2003 of the Company (the "Series A Securities"), the 12%
Series B Senior Subordinated PIK Notes due 2003 of the Company (the
"Series B Securities") and the 12% Series C Senior Subordinated PIK
Notes due 2003 of the Company (the "Series C Securities", and
collectively with the Series A Securities, the Series B Securities and
the Series D Securities, the "Securities").] The Securities are limited
in aggregate original principal amount of up to $39,272,900. Reference
is hereby made to the Indenture and all indentures supplemental thereto
for a statement of the respective rights, limitations of rights, duties
and immunities thereunder of the Company, the Trustee, the holders of
the Senior Debt and the Holders of the Securities and of the terms upon
which the Securities are, and are to be, authenticated and delivered.
(b) The last sentence of the seventh paragraph of Section 2.3
of the Indenture is hereby amended and restated in its entirety as follows:
Each of the Series A Securities, the Series B
Securities, the Series C Securities and the Series D Securities shall rank pari
passu.
(c) The tenth paragraph of Section 2.3 of the Indenture is
hereby amended and restated in its entirety as follows:
20
<PAGE>
Unless the context otherwise requires, the Series
A Securities, the Series B Securities, the Series C Securities and the
Series D Securities shall constitute one series for all purposes under
the Indenture, including without limitation, amendments, waivers,
approvals, redemptions and Offers to Purchase (except, in the case of
redemptions and Offers to Purchase, for any differences required as a
result of the Series C Securities and the Series D Securities having a
different Accreted Value from the Series A Securities and the Series B
Securities).
(d) The fourteenth paragraph of Section 2.3 of the Indenture
is hereby amended and restated in its entirety as follows:
"The Securities shall be issued only in registered
form without coupons and only in denominations of $1,000 and any
integral multiple thereof; provided, however, the Series D Securities
and the Additional Securities may be issued in denominations of $100
and any integral multiple thereof."
1.5 Amendment to Section 3.1. (a) The first paragraph of Section
3.1 of the Indenture is hereby amended and restated in its entirety as follows:
The aggregate original principal amount of Securities
(including Additional Securities) which may be authenticated and
delivered under this Indenture is limited to $39,272,900.00 (the Series
A Securities are limited to an aggregate original principal amount,
(including Additional Series A Securities) of $662,600.00, the Series B
Securities are limited to an aggregate original principal amount
(including Additional Series B Securities) of $33,129,100.00, the
Series C Securities are limited to an aggregate original principal
amount (including Additional Series C Securities) of $3,313,000.00 and
the Series D Securities are limited to an aggregate original principal
amount (including Additional Series D Securities) of $2,168,200.00),
except for Securities authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Securities
pursuant to Sections 3.4, 3.5, 3.6, 9.6 or 11.8 or in connection with
an Offer to Purchase pursuant to Sections 10.11, 10.13 and 10.18.
Subject to such exceptions (i) the maximum aggregate original principal
amount of Securities which may be authenticated and delivered under
this Indenture other than as Additional Securities shall be limited to
$23,822,800.00 (consisting of $400,000 of Series A Securities,
$20,000,000 of Series B Securities, $2,000,000 of Series C Securities
and $1,422,800.00 of Series D Securities), and (ii) the maximum
aggregate original principal amount of Additional Securities which may
be authenticated and delivered under this indenture is limited to
$15,450,100.00 (consisting of $262,600.00 of Additional Series A
Securities, $13,129,100.00 of Additional Series B Securities,
$1,313,000.00 of Additional Series C Securities, and $745,400.00 of
Additional Series D Securities).
(b) The third paragraph of Section 3.1 of the
Indenture is hereby deleted.
(c) The fourth paragraph of Section 3.1 is hereby
amended and restated in its entirety as follows:
The Series A Securities shall be known and
designated as the "12% Series A Senior Subordinated PIK Notes due 2003"
of the Company, the Series B Securities shall be known and designated
as the "12% Series B Senior Subordinated PIK Notes due 2003" of the
Company, the Series C Securities shall be known and designated as the
"12% Series C Senior Subordinated PIK Notes due 2003" of the Company
and the Series D Securities shall be known and designated as the "12%
Series D Senior Subordinated PIK Notes due 2003" of the Company. The
Stated Maturity of the Securities shall be August 1, 2003. The
Securities shall bear interest on the unpaid principal amount of such
Securities at the rate of 12% per annum, payable semi-annually on
August 1 and February 1, commencing February 1, 1997 in the case of the
Series A Securities, the Series B Securities, the Series C Securities,
and the Series D Securities, until the principal thereof is paid or
made available for payment; provided, however, on any Interest Payment
Date through and including February 1, 2000, the Company may, at its
option, by giving the holder of this Security and the Trustee notice of
its election not less than 5 days nor more than 45 days prior to the
record date for the related Interest Payment Date, pay interest on the
Security, in lieu of payment of interest on the Security in cash,
through the
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<PAGE>
issuance of Additional Securities, in an aggregate principal amount
equal to the amount of the interest that would have been payable if
such Note had accrued interest during the relevant interest period at
the rate of 13% per annum. Additional Securities may only be issued in
lieu of payment of interest in cash on Securities. Additional
Securities issued in lieu of payment of interest in cash on Series A
Securities shall constitute additional Series A Securities; Additional
Securities issued in lieu of payment of interest in cash on Series B
Securities shall constitute additional Series B Securities; Additional
Securities issued in lieu of payment of interest in cash on Series C
Securities shall constitute additional Series C Securities; and
Additional Securities issued in lieu of payment of interest in cash on
Series D Securities shall constitute additional Series D Securities.
(d) The eighth paragraph of Section 3.1 of the
Indenture is hereby amended and restated in its entirety as follows:
The Securities shall be subordinated in right of
payment to Senior Debt as provided in Article XII and the Series A
Securities, the Series B Securities, the Series C Securities and the
Series D Securities shall rank pari passu.
(e) The tenth paragraph of Section 3.1 of the
Indenture is hereby amended and restated in its entirety as follows:
Unless the context otherwise requires, the Series
A Securities, the Series B Securities, the Series C Securities and the
Series D Securities (including all Additional Securities constituting
Securities of each such series) shall constitute one series for all
purposes under the Indenture, including without limitation, amendments,
waivers, approvals, redemptions and Offers to Purchase (except, in the
case of redemptions and Offers to Purchase, for any differences
required as a result of the Series C Securities and the Series D
Securities having a different Accreted Value from the Series A
Securities and the Series B Securities).
1.6 Amendment to Section 3.2. Section 3.2 is hereby amended and
restated in its entirety to read as follows:
"The Securities shall be issued only in registered
form without coupons and only in denominations of $1,000 and any
integral multiple thereof; provided, however, the Series D Securities
and the Additional Securities may be issued in denominations of $100
and any integral multiple thereof."
1.7 Amendment to Section 3.5. The last sentence of the first
paragraph of Section 3.5 of the Indenture is hereby amended and restated in its
entirety as follows:
Such Security Register shall distinguish between
Series A Securities, Series B Securities, Series C Securities and
Series D Securities.
1.8 Amendment to Section 10.8(b). Section 10.8(b) is hereby
amended and restated to read in its entirety as follows:
Limitation on Consolidated Debt.
(b) After September 30, 1996, the Company and its
Subsidiaries may Incur Debt, if, at the date of and giving
effect to the incurrence of such Debt, the Pro Forma Cash
Flow Coverage Ratio is equal to or greater than 2.0 to 1.0.
Notwithstanding the foregoing sentence, the Company or any
Subsidiary may Incur Permitted Debt without regard to the
foregoing limitation.
1.9 Amendment to Section 10.13. The first paragraph of Section
10.13 is hereby amended and restated in its entirety to read as follows:
"At the end of any two consecutive fiscal quarters during the
periods after December 31, 1999, the Cash Flow Coverage of
the Company for such two fiscal quarters then ending shall
equal or exceed a ratio of 2.0 to 1.0.
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<PAGE>
1.10 Amendment to Section 11.1. The last paragraph of Section 11.1
of the Indenture is hereby amended and restated in its entirety as follows:
Subject to Section 3.1, the Series A Securities, the Series B
Securities, the Series C Securities and the Series D Securities shall
be treated as one class for all purposes under this Indenture,
including, without limitation, redemptions hereunder.
ARTICLE II
Previously Authenticated Notes
To the extent that Series A Securities, Series B Securities and Series
C Securities have been authenticated by the Trustee prior to the date of this
Third Supplemental Indenture, such Securities shall continue to be valid and
binding obligations of the Company notwithstanding the fact that such Securities
do not contain the revised language provided for in Section 1.4 of this Third
Supplemental Indenture. After the date of this Third Supplemental Indenture if
any previously authenticated Securities are presented to the Trustee for
transfer or exchange, any new Series A Securities, Series B Securities or Series
C Securities authenticated by the Trustee as a result of such transfer or
exchange may be in the form prescribed by the Original Indenture; provided that
such Securities contain a legend substantially similar to the following:
Pursuant to the terms of a Third Supplemental Indenture among the
Company, the Guarantor and the Trustee, an additional Series D has been
authorized, which Series D Securities shall rank pari passu with the
Series A Securities, the Series B Securities and the Series C
Securities. Generally, all four series of Securities shall constitute
one series for all purposes under the Indenture, including without
limitation, amendments, waivers, approvals, redemptions and Offers to
Purchase. A copy of the Third Supplemental Indenture is available upon
request from the Company.
ARTICLE III
Miscellaneous Provisions
3.1 Counterparts. This Third Supplemental Indenture may be executed in
counterparts, each of which when so executed shall be deemed to be an original,
but all such counterparts shall together constitute one and the same instrument.
3.2 Severability. In the event that any provision in this Third
Supplemental Indenture shall be held to be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.
3.3 Headings. The article and section headings are for
convenience only and shall not affect the construction hereof.
3.4 Successors and Assigns. Any covenants and agreements in this Third
Supplemental Indenture by Issuer shall bind its successors and assigns, whether
so expressed or not.
3.5 GOVERNING LAW. THIS THIRD SUPPLEMENTAL INDENTURE SHALL BE GOVERNED
BY, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
AS APPLIED TO CONTRACTS MADE AND PERFORMED IN THE STATE OF NEW YORK, WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
3.6 Effect of Third Supplemental Indenture. Except as amended by
this Third Supplemental Indenture, the terms and provisions of the Indenture
shall remain in full force and effect.
3.7 Trustee. The Trustee accepts the modifications of the Trust
effected by this Third Supplemental Indenture, but only upon the terms and
conditions set forth in the Indenture. Without limiting the generality of the
foregoing, the Trustee assumes no responsibility for the correctness of the
recitals herein contained, which shall be taken as the statements of Issuer, and
the Trustee shall not be responsible or accountable in any way whatsoever for or
with respect to
23
<PAGE>
the validity or execution or sufficiency of this Third Supplemental Indenture
and the Trustee makes no representation with respect thereto.
[SIGNATURES ON NEXT PAGE]
24
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Third
Supplemental Indenture to be executed by their duly authorized representative as
of the date hereof.
<TABLE>
<S> <C>
ATTEST: CINEMARK MEXICO (USA), INC.
/s/ Jeffrey Stedman By:/s/ Alan W. Stock
Printed Name: Alan W. Stock
Title: President
ATTEST: CINEMARK DE MEXICO, S.A. de C.V.
/s/ Alan W. Stock By: /s/ Jeffrey J. Stedman
Printed Name: Jeffrey J. Stedman
Title: Director
ATTEST: UNITED STATES TRUST COMPANY OF
NEW YORK
_______________________________ By: /s/ Bill Barber
Printed Name: Bill Barber
Title: Authorized Signatory
</TABLE>
25
<PAGE>
EXHIBIT T3E-1
OFFER TO EXCHANGE AND CONSENT SOLICITATION
Cinemark Mexico (USA), Inc.
Offer to Exchange
all of its outstanding
12% Series A Senior Subordinated Notes
due 2003
for
12% Series A Senior Subordinated PIK Notes due
2003 (13% if interest is paid in additional Series
A Notes),
12% Series B Senior Subordinated Notes
due 2003
for
12% Series B Senior Subordinated PIK Notes due
2003 (13% if interest is paid in additional Series
B Notes),
12% Series C Senior Subordinated Notes
due 2003
for
12% Series C Senior Subordinated PIK Notes due
2003 (13% if interest is paid in additional Series
C Notes),
Warrants to Purchase Common Stock
of Cinemark Mexico (USA), Inc.
for
12% Series D Senior Subordinated PIK Notes due 2003
(13% if interest is paid in additional Series D Notes)
The Exchange Offer and Consent Solicitation will expire at 5:00 p.m., New
York City time, on September 27, 1996 (the "Initial Expiration Date"), unless
extended (such date, as extended, the "Expiration Date"). The Company intends to
execute a Third Supplemental Indenture (the "Third Supplemental Indenture")
containing the Proposed Amendments (as defined herein) immediately upon receipt
of the Requisite Consents (as defined herein).
================================================================================
[GRAPHIC OMITTED]
The date of this Offer to Exchange is August 30, 1996
26
<PAGE>
Cinemark Mexico (USA), Inc., a Texas corporation (the "Company"), hereby
offers to exchange (the "Exchange Offer"), upon the terms and subject to the
conditions set forth in this Offer to Exchange and Consent Solicitation (the
"Offer to Exchange") and in the accompanying Consent and Letter of Transmittal
(the "Consent and Letter of Transmittal"), (i) with respect to each $1,000
principal amount of its 12% Series A Senior Subordinated Notes due 2003 (the
"Existing Series A Notes") outstanding in the aggregate principal amount of
$400,000, $1,000 principal amount of its 12% Series A Senior Subordinated PIK
Notes due 2003 (the "New Series A Notes") proposed to be outstanding in an
aggregate principal amount of $400,000, (ii) with respect to each $1,000
principal amount of its 12% Series B Senior Subordinated Notes due 2003 (the
"Existing Series B Notes") outstanding in the aggregate principal amount of
$20,000,000, $1,000 principal amount of its 12% Series B Senior Subordinated PIK
Notes due 2003 (the "New Series B Notes") proposed to be outstanding in an
aggregate original principal amount of $20,000,000, (iii) with respect to each
$1,000 principal amount of its 12% Series C Senior Subordinated Notes due 2003
(the "Existing Series C Notes") outstanding in the aggregate principal amount of
$2,000,000, $1,000 principal amount of its 12% Series C Senior Subordinated PIK
Notes due 2003 (the "New Series C Notes") proposed to be outstanding in an
aggregate original principal amount of $2,000,000 and (iv) with respect to each
issued and outstanding warrant to purchase one share of the common stock of the
Company (the "Existing Warrants"), $3.757 original principal amount of its 12%
Series D Senior Subordinated PIK Notes due 2003 (the "New Series D Notes")
proposed to be outstanding in an aggregate original principal amount of
$1,424,177. The Existing Series A Notes, the Existing Series B Notes and the
Existing Series C Notes are collectively referred to herein as the "Existing
Notes", and the Existing Notes and the Existing Warrants are collectively
referred to herein as the "Existing Securities." The New Series A Notes, the New
Series B Notes, the New Series C Notes and the New Series D Notes are
collectively referred to herein as the "New Securities". The Exchange Offer is
being made only to the registered holders of all outstanding Existing Securities
(each a "Holder" and collectively, the "Holders"). The New Securities will be
guaranteed on a senior subordinated basis by Cinemark de Mexico, S.A. de C.V.
("Cinemark de Mexico"), a Mexican corporation directly owned by the Company.
INTEREST ON EACH SERIES OF THE NEW SECURITIES MAY, ON EACH INTEREST PAYMENT
DATE FROM FEBRUARY 1, 1997 THROUGH AND INCLUDING FEBRUARY 1, 2000 (THE "PIK
PERIOD"), BE PAID, AT THE OPTION OF THE COMPANY, IN CASH OR THROUGH THE ISSUANCE
OF ADDITIONAL NOTES OF THAT SAME SERIES (THE "ADDITIONAL NOTES"). INTEREST ON
EACH SERIES OF THE NEW SECURITIES WILL ACCRUE DURING THE RELEVANT INTEREST
PERIOD AT THE RATE OF 12% PER ANNUM IF PAID IN CASH (THE "CASH INTEREST RATE")
OR 13% PER ANNUM IF PAID IN ADDITIONAL NOTES OF THAT SAME SERIES (THE "PIK
INTEREST RATE").
Concurrently with the Exchange Offer, the Company hereby solicits (the
"Consent Solicitation") the Consent (the "Consent") of each Holder to the
adoption of the proposed amendments (the "Proposed Amendments"), subject to the
terms and conditions contained in this Exchange Offer and in the Consent and
Letter of Transmittal, to the Indenture dated as of July 30, 1993 (the
"Indenture") between the Company and United States Trust Company of New York,
N.A., as trustee (the "Trustee"), pursuant to which the Existing Notes were
issued. Consents of the holders of (i) at least a majority of the aggregate
outstanding principal amount of Existing Notes held by persons other than the
Company and its affiliates must be received in order for the Proposed Amendments
to be approved and binding on all Holders and (ii) with respect to amendments to
the Indenture affecting the payment of interest or the interest rate on the
Existing Notes, the consent of each Holder of each of the Existing Notes must be
received in order for such amendment to be binding on that Holder (in each case,
respectively, the "Requisite Consents"). The Proposed Amendments to the
Indenture will become effective upon the execution of the Third Supplemental
Indenture by the Company and the Trustee. The Company intends to cause the
execution of such Third Supplemental Indenture to occur on the Initial
Expiration Date, if, as of such date, the Requisite Consents have been obtained
or, if later, promptly upon obtaining Requisite Consents. The time and date on
which the Third Supplemental Indenture is executed is referenced to herein as
the "Consent Date". The Third Supplemental Indenture, although executed and
effective on the Consent Date, will not become operative until the date upon
which the Company issues the New Securities (the "Exchange Date").
The Company has been advised that Putnam Investment Management, Inc.
("Putnam") advises funds and accounts which beneficially own all of the Existing
Series B Notes, all of the Existing Series C Notes (collectively, representing
98.2% of the aggregate outstanding Existing Notes) and 93% of the Existing
Warrants. Pursuant to a letter agreement dated as of July 18, 1996, Putnam has
agreed on behalf of such funds and accounts that such Holders will tender their
Existing Securities in the Exchange Offer and will deliver Consents to the
Proposed Amendments.
Holders who tender Existing Securities in the Exchange Offer are obligated
to deliver Consents to the Proposed Amendments. Pursuant to the terms of the
Consent and Letter of Transmittal, the completion, execution and delivery
thereof by a Holder in connection with the tender of the Existing Notes will be
deemed to constitute the Consent of such tendering Holder to the Proposed
Amendments.
Notwithstanding any provision of the Exchange Offer and the Consent and
Letter of Transmittal to the contrary, the Company's obligation to accept for
exchange Existing Securities validly tendered pursuant to the Exchange Offer is
conditioned upon (i) the valid tender pursuant to the Exchange Offer by the
Holders of all of the outstanding Existing Series B Notes and Existing Series C
Notes prior to 5:00 p.m. on September 27, 1996 (the "Initial Expiration Date")
and the Company obtaining the Requisite Consents (the "Exchange
27
<PAGE>
Condition"), (ii) the execution of the Supplemental Indenture providing for the
Proposed Amendments following receipt of the Requisite Consents (the
"Supplemental Indenture Condition") and (iii) the satisfaction or waiver of the
General Conditions (as defined below). Additionally, the Company's obligation to
accept for exchange Existing Series A Notes validly tendered pursuant to the
Exchange Offer is conditioned upon (i) the valid tender pursuant to the Exchange
Offer by the Holders of all of the Existing Series A Notes prior to 5:00 p.m. on
September 27, 1996 (the "Series A Condition") and the obtaining of the Requisite
Consents with respect to the Existing Series A Notes, (ii) the satisfaction of
the Supplemental Indenture Conditions and (iii) the satisfaction or waiver of
the General Conditions. The Company, in its sole discretion, may waive any of
the conditions of, or amend any of the terms of, the Exchange Offer and the
Consent Solicitation, in whole or in part from time to time. See "The Exchange
Offer - Conditions."
The purpose of the Exchange Offer is to exchange New Securities for all
outstanding Existing Securities in order to improve the Company's and its
subsidiary's, Cinemark de Mexico, financial and operating flexibility. The
purpose of the Consent Solicitation and the Proposed Amendments is to amend the
Indenture (i) to provide for the issuance of the New Securities and (ii) to
amend certain of the financial covenants.
The Requisite Consents must be received in order for any of the Proposed
Amendments to be approved and binding on all Holders.
The Company will accept for exchange any and all Existing Securities that
are validly tendered on or prior to 5:00 p.m. New York City time, on the Initial
Expiration Date unless the Exchange Offer is extended. The exchange of New
Securities for Existing Securities will be made, with respect to all Existing
Securities validly tendered and not withdrawn on or prior to the Expiration
Date, within two business days following the Expiration Date. Tenders of
Existing Securities may be withdrawn at any time until the Consent Date and,
thereafter, only if the Exchange Offer with respect to the Existing Securities
is terminated without any Existing Securities being exchanged thereunder. In the
event of such a termination, the Existing Securities will be returned to the
tendering Holder as promptly as practicable. Consents relating to the Existing
Notes that have been tendered may be revoked prior to the Consent Date only if
such Existing Notes are withdrawn prior to the Consent Date. Existing Series A
Notes, Existing Series B Notes and Existing Series C Notes may be tendered only
in denominations of $1,000 and integral multiples of $1,000 in excess thereof.
The Company has agreed to pay the expenses of the Exchange Offer.
The Exchange Offer is being made by the Company in reliance on an exemption
from the registration requirements of the Securities Act of 1933, as amended
(the "Securities Act"), afforded by Section 3(a)(9) thereof. The Company will
not pay any commission or other remuneration to any broker, dealer, salesman or
other person for soliciting tenders of the Existing Securities. Employees of the
Company may solicit exchanges from holders of the Existing Securities, but they
will not receive additional compensation therefor.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The New Securities will be obligations of the Company issued pursuant
to the Indenture. The form and terms of the New Securities are identical in all
material respects to the form and terms of the Existing Notes except (i)
interest on the New Securities may, during the PIK Period, be paid, at the
option of the Company in cash or through the issuance of Additional Notes and
(ii) the Series D Notes are entitled to certain registration rights under a
registration rights agreement (the "Registration Rights Agreement") between the
Company and the initial holders of the Series D Notes. See "Description of
Certain Agreements--Registration Rights."
The New Securities will bear interest from September 27, 1996. The Existing
Notes accrue interest at the rate of 12% per annum. On September 27, 1996, the
amount of accrued and unpaid interest per $1,000 principal amount of the
Existing Securities (assuming 13% interest per annum) will be $85.58 (the
"Accrued Interest"). Pursuant to the Offer to Exchange, each Holder whose
Existing Securities are exchanged pursuant to the Exchange Offer will be paid
their respective Accrued Interest with $85.58 principal amount of Additional
Notes per $1,000 principal amount of Existing Securities; provided, however,
that in lieu of the issuance of any Additional Securities as set forth above,
the principal amount of which would be less than $100 ("Fractional Additional
Securities"), the Company shall pay the holder of Fractional Additional
Securities an amount in cash equal to the Fractional Additional Security.
Interest on the New Securities is payable semi-annually on February 1 and August
1 of each year at the Cash Interest Rate or the PIK Interest Rate, as
applicable, beginning February 1, 1996.
The New Securities will be subordinated to all existing and future Senior
Debt (as defined herein) of the Company. The indebtedness evidenced by the
guarantee by Cinemark de Mexico (including the payment of principal of, premium,
if any, and interest on the New Securities) will be subordinated on the same
basis to Senior Debt of Cinemark de Mexico as the New Securities will be
subordinated to Senior Debt of the Company.
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<PAGE>
UNDER NO CIRCUMSTANCES MAY THIS OFFER BE USED FOR AN OFFER TO RESELL,
RESALE OR OTHER RETRANSFER OF THE NEW SECURITIES. See "The Exchange Offer-Terms
of the Exchange Offer-General."
The Company will not receive any proceeds from this Exchange Offer, and no
underwriter is being utilized in connection with the Exchange Offer.
See "Risk Factors" and "Certain Federal Income Tax Considerations" for a
discussion of certain considerations that Holders of Existing Securities should
consider in deciding whether to participate in the Exchange Offer.
29
<PAGE>
IMPORTANT INFORMATION
Any Holder desiring to tender Existing Securities and deliver Consents
should either (i) complete and sign the Consent and Letter of Transmittal (or a
facsimile thereof) in accordance with the instructions therein, have his or her
signature thereon guaranteed (if required by Instruction 1 of the Consent and
Letter of Transmittal) and send or deliver such manually signed Consent and
Letter of Transmittal (or a manually signed facsimile thereof) and any other
required documents, including, without limitation, certificates evidencing such
Existing Securities (or, in the case of Existing Securities delivered by
book-entry transfer, confirmation of the transfer of such Existing Securities
into the Exchange Agent's (as defined herein) account with a Book-Entry Transfer
Facility (as defined herein) pursuant to the procedures set forth herein) to
United States Trust Company of Texas, N.A. (the "Exchange Agent"), or (ii)
request such Holder's broker, dealer, commercial bank, trust company or other
nominee to effect the transaction for such Holder. A beneficial owner who has
Existing Securities registered in the name of a broker, dealer, commercial bank,
trust company or other nominee must contact such broker, dealer, commercial
bank, trust company or other nominee if such beneficial owner desires to tender,
and deliver Consents for, such Existing Securities so registered.
Any Holder desiring to tender Existing Securities who cannot comply with
the procedures set forth herein for tender on a timely basis or whose
certificates for Existing Securities are not immediately available may tender
the Existing Securities by following the procedures for guaranteed delivery set
forth under "The Exchange Offer and Consent Solicitation--Procedure for
Tendering and Delivering Consents--Guaranteed Delivery."
Questions and requests for assistance or for additional copies of this
Exchange Offer, the Consent and Letter of Transmittal, the Notice of Guaranteed
Delivery (as defined herein) or any other related materials may be directed to
the Company at its address and telephone number set forth on the back cover of
this Exchange Offer.
THIS EXCHANGE OFFER AND THE CONSENT AND LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE EXCHANGE OFFER AND THE CONSENT SOLICITATION.
THE EXCHANGE OFFER AND THE CONSENT SOLICITATION ARE NOT BEING MADE TO (NOR
WILL TENDERS OF NOTES BE ACCEPTED FROM OR ON BEHALF OF) HOLDERS OF EXISTING
SECURITIES IN ANY JURISDICTION IN WHICH THE MAKING OR ACCEPTANCE OF THE EXCHANGE
OFFER OR THE CONSENT SOLICITATION WOULD NOT BE IN COMPLIANCE WITH THE LAWS OF
SUCH JURISDICTION. HOWEVER, THE COMPANY, IN ITS SOLE DISCRETION, MAY TAKE SUCH
ACTION AS IT MAY DEEM NECESSARY TO MAKE THE EXCHANGE OFFER AND THE CONSENT
SOLICITATION IN ANY SUCH JURISDICTION, AND MAY EXTEND THE EXCHANGE OFFER AND
CONSENT SOLICITATION TO HOLDERS OF EXISTING SECURITIES IN SUCH JURISDICTION.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF THE COMPANY THAT IS NOT CONTAINED IN THIS EXCHANGE
OFFER OR IN THE CONSENT AND LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION SHOULD NOT BE RELIED UPON.
30
<PAGE>
AVAILABLE INFORMATION
The Company and Cinemark de Mexico, S.A. de C.V. file consolidated reports
and other information with the Securities and Exchange Commission (the
"Commission"). Such reports and other information can be inspected and copied at
the Public Reference Section of the Commission located at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at regional public
reference facilities maintained by the Commission located at Northwestern Atrium
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60662; and Seven
World Trade Center, New York, New York 10048. Copies of such material can be
obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. Such material may also
be accessed electronically by means of the Commission's home page on the
Internet at http://www.sec.gov
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
<S> <C>
Summary...................................................................................................... 7
The Company.................................................................................................. 10
Recent Developments.......................................................................................... 10
Risk Factors................................................................................................. 11
The Exchange Offer and Consent Solicitations................................................................. 14
Proposed Amendments to the Indenture......................................................................... 21
Certain Federal Income Tax Considerations.................................................................... 21
Description of Certain Agreements............................................................................ 26
Exchange Agent; Miscellaneous................................................................................ 26
Annex I: Proposed Amendments................................................................................. AI
Annex II: Proposed Third Supplemental Indenture.............................................................. AII
Annex III: The Company and Cinemark de Mexico's
Annual Report on Form 10-K for Fiscal Year 1995.............................................................AIII
Annex IV: The Company and Cinemark de Mexico's
Quarterly Report on Form 10-Q for the Six
Month Period Ended June 30, 1996............................................................................ AIV
</TABLE>
31
<PAGE>
SUMMARY OF TERMS OF THE EXCHANGE OFFER
Unless the context otherwise requires, the terms the "Company" and
"Cinemark Mexico" refer to Cinemark Mexico (USA), Inc. and its subsidiary,
Cinemark de Mexico, S.A. de C.V.
The Exchange Offer relates to (i) the exchange of up to $22,400,000 aggregate
principal amount of Existing Notes for up to an equal aggregate original
principal amount of New Securities and (ii) the exchange of all of the
outstanding warrants to purchase common stock of the Company for up to a
$1,424,177 aggregate original principal amount of Series D Notes. The New
Securities will be obligations of the Company issued pursuant to the Indenture.
The form and terms of the New Securities (other than the PIK Interest) are
identical in all material respects to the form and terms of the Existing Notes
except for series designation and registration rights.
The Exchange Offer
(i) With respect to each $1,000 principal amount of its Existing Series A Notes
outstanding in the aggregate principal amount of $400,000, $1,000 original
principal amount of its New Series A Notes, (ii) with respect to each $1,000
original principal amount of its Existing Series B Notes outstanding in the
aggregate principal amount of $20,000,000, $1,000 original principal amount of
its outstanding New Series B Notes, (iii) with respect to each $1,000 original
principal amount of its Existing Series C Notes outstanding in the aggregate
principal amount of $2,000,000, $1,000 original principal amount of its New
Series C Notes and (iv) with respect to each of its Existing Warrants, $3.757
original principal amount of its New Series D Notes. The exchange of New
Securities for Existing Securities validly tendered and not withdrawn on or
prior to the Expiration Date will be made within two business days following the
Expiration Date. Expiration Date
5:00 p.m., New York City time, on September 27, 1996 (the "Initial
Expiration Date") unless the Exchange Offer is extended, in which
case the term "Expiration Date" means the latest date and time to
which the Exchange Offer is extended. See "The Exchange
Offer--Expiration Date; Extensions; Amendments."
Accrued Interest on the New
Securities and the Existing Notes
The New Securities will bear interest from September 27, 1996. The Existing
Notes accrue interest at the rate of 12% per annum. On September 27, 1996, the
amount of accrued and unpaid interest per $1,000 principal amount of the
Existing Securities (assuming 13% interest per annum) will be $85.58 (the
"Accrued Interest"). Pursuant to the Offer to Exchange, each Holder whose
Existing Securities are exchanged pursuant to the Exchange Offer will be paid
their respective Accrued Interest with $85.58 principal amount of Additional
Notes per $1,000 principal amount of Existing Securities; provided, however,
that in lieu of the issuance of any Additional Securities as set forth above,
the principal amounts of which would be less than $100 ("Fractional Additional
Securities"), the Company
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<PAGE>
shall pay the holder of Fractional Additional Securities an amount in
cash equal to the Fractional Additional Security.
Conditions to the Exchange
Offer
The Company's obligation to complete the Exchange Offer is subject
to certain customary conditions, which may be waived by the
Company. See "The Exchange Offer--Conditions."
Procedure for Tendering Existing
Securities
Each Holder of Existing Securities wishing to accept the Exchange Offer must
complete, sign and date the Consent and Letter of Transmittal, or a facsimile
thereof, in accordance with the instructions contained herein and therein, and
mail or otherwise deliver such Consent and Letter of Transmittal, or such
facsimile, together with the Existing Securities to be exchanged and any other
required documentation to the Exchange Agent at the address set forth herein and
therein. See "The Exchange Offer--Procedure for Tendering."
Special Procedures for
Beneficial Holders
Any beneficial holder whose Existing Securities are registered in the name of
his broker, dealer, commercial bank, trust company or other nominee and who
wishes to tender in the Exchange Offer should contact such registered Holder
promptly and instruct such registered Holder to tender on his behalf. If such
beneficial holder wishes to tender on his own behalf, such beneficial holder
must, prior to completing and executing the Consent and Letter of Transmittal
and delivering his Existing Securities, either make appropriate arrangements to
register ownership of the Existing Securities in such holder's name or obtain a
properly completed bond power from the Holder. The transfer of record ownership
may take considerable time. See "The Exchange Offer--Procedure for Tendering."
Guaranteed Delivery
Procedures
Holders of Existing Securities who wish to tender their Existing Securities and
whose Existing Securities are not immediately available or who cannot deliver
their Existing Securities and a properly completed Consent and Letter of
Transmittal or any other documents required by the Consent and Letter of
Transmittal to the Exchange Agent prior to the Expiration Date may tender their
Existing Securities according to the guaranteed delivery procedures set forth in
"The Exchange Offer--Guaranteed Delivery Procedures." Withdrawal Rights
Tenders of Existing Securities may be withdrawn at any time until the Consent
Date and, thereafter, if the Exchange Offer with respect to the Existing
Securities is terminated without any Existing Securities being exchanged
thereunder. In the event of such a termination, the Existing Securities will be
returned to the tendering Holder as promptly as practicable.
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Acceptance of Existing Securities
and Delivery of New Securities
Subject to certain conditions (as summarized above in "Conditions" and described
more fully in "The Exchange Offer and Consent Solicitations---Conditions"), the
Company will accept for exchange any and all Existing Securities which are
validly tendered in the Exchange Offer prior to 5:00 p.m., New York City time,
on the Expiration Date. The New Securities issued pursuant to the Exchange Offer
will be delivered promptly following the Expiration Date. See "The Exchange
Offer--Terms of the Exchange Offer."
Exchange Agent
United States Trust Company of Texas, N.A. is serving as Exchange Agent in
connection with the Exchange Offer. The address of the Exchange Agent is: United
States Trust Company of Texas, N.A., 2001 Ross Avenue, Suite 2700, Dallas, Texas
75201-2936, Attn: Corporate Trust Department. For information with respect to
the Exchange Offer, call (214) 754-1200.
Interest Payments.......................
Interest on the New Securities will accrue from February 27, 1996 and will be
payable semi-annually on February 1 and August 1 of each year, commencing
February 1, 1997. Interest on the New Securities may be paid at the option of
the Company, in cash or through the issuance of Additional Notes.
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THE COMPANY
The Company is an indirect unrestricted subsidiary of Cinemark USA, Inc.,
a Texas corporation ("Cinemark USA"). Cinemark USA is the fifth largest motion
picture exhibitor in the United States in terms of number of screens owned and
operated. The Company, which was organized to own and operate movie theatres in
Mexico through one or more subsidiaries, is developing state-of-the-art
multiplex theatres comparable to new theatres developed by Cinemark USA in the
United States. The Company operates eleven theatres (114 screens). The Company's
revenues were $12.3 million in 1995.
At June 30, 1996, the Company had two theatres (25 screens) under
commitment with executed leases. Mexico is currently in the midst of a
depression resulting from the collapse of the peso beginning in December 1994.
Cinemark Mexico's debt and some theatre leases are denominated in U.S. dollars
while their revenues are collected in Mexican pesos. As such, the devaluation
and resulting depression has significantly impacted and will continue to effect
the short term profitability of the theatres. Additionally, there is a lack of
available capital in the Mexican financial market as a result of the significant
rise in interest rates resulting in the reduced availability of developer
financing for future projects. Such events have caused delays in Cinemark
Mexico's current projects and a reduction in the rate of expansion initially
anticipated by Cinemark Mexico. Cinemark Mexico will continue to evaluate the
market for appropriate locations to develop state-of-the-art multiplex theatres.
The Company's operations are being conducted by Cinemark de Mexico, S.A. de C.V.
("Cinemark de Mexico"), a Mexican corporation which is 99.99% owned by the
Company.
RECENT DEVELOPMENTS
Amendment to Indenture
The Company, Cinemark de Mexico and U.S. Trust Company of New York, N.A.
executed that certain Second Supplemental Indenture dated August 30, 1995 (the
"Second Supplemental Indenture"). The Second Supplemental Indenture, among other
things, extended for two years certain financial ratios with which the Company
must comply. Copies of the Second Supplemental Indenture may be obtained from
the Company at no cost.
Senior Secured Credit Facility
On December 4, 1995, Cinemark International, Inc. (formerly known as
Cinemark II, Inc. and the parent of the Company, "Cinemark International"), the
Company and Cinemark de Mexico entered into a Senior Secured Credit Facility
(the "Mexico Senior Credit Facility"). The Mexico Senior Credit Facility
provides for loans by Cinemark International to the Company of up to $10.0
million in the aggregate, which loans bear interest at a rate of 12% per annum
(the "Mexico Senior Notes"). Any amounts borrowed by the Company under the
Mexico Senior Credit Facility will be borrowed on a term loan basis. The loans
are payable as follows: (i) all accrued and unpaid interest is payable on the
first anniversary of the initial loan and quarterly thereafter on January 15,
April 15, July 15 and October 15 and (ii) on December 31, 2001, all unpaid
principal of and accrued, unpaid interest on the loan and fees shall become due
and payable. Borrowing under the Mexico Senior Credit Facility is secured by a
pledge to Cinemark International of all of the assets of the Company.
Conditions and provisions in the Mexico Senior Credit Facility limit the
Company's and Cinemark de Mexico's ability to (i) create, incur or assume
indebtedness, (ii) create or incur any additional liens, (iii) engage
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in mergers, consolidations or conveyances of all or substantially all of its
assets, (iv) change the manager operating the theatres owned by Cinemark de
Mexico under present management agreements or (v) make investments other than
permitted investments. The Mexico Senior Credit Facility also requires the
Company to maintain specified financial ratios.
Events of default under the Mexico Senior Credit Facility include, among
other things: (i) any failure of the Company to pay principal when due or to pay
interest or any other amount due within five days after the due date, (ii)
breach of certain covenants and agreements in the Mexico Senior Credit Facility,
(iii) material inaccuracy of any representation or warranty given by the Company
in the Mexico Senior Credit Facility, (iv) certain change of control and acts of
bankruptcy, insolvency or dissolution, (v) default by the Company or Cinemark de
Mexico on any other indebtedness, (vi) Cinemark International not having a valid
perfected security interest in the collateral or (vii) default by the Company or
Cinemark de Mexico under the Indenture.
The Mexico Senior Credit Facility permits the Company to relend to
Cinemark de Mexico on a senior secured basis any funds borrowed to finance
construction of uncompleted locations, the acquisition and installment of
furniture, fixtures and equipment at such locations and for general corporate
purposes and working capital. Funds borrowed by Cinemark de Mexico bear interest
at the rate of 14.12% per annum and are secured by a pledge of all of the assets
of Cinemark de Mexico.
Simultaneously with the execution of the Third Supplemental Indenture,
Cinemark International and the Company will amend the Mexico Senior Notes to
provide that at the Company's option, all accrued and unpaid interest thereon
for each interest period may be added to the principal of the Mexico Senior Note
on each installment payment date beginning on October 15, 1994 and continuing
for the four year period following such date (the "Mexico Senior Note PIK
Period"). In such event, to determine the amount to be added to the principal of
the Mexico Senior Note, the Mexico Senior Note will be deemed to bear interest
at a rate equal to 13% per annum during such Mexico Senior Note PIK Period.
Additionally, Cinemark International and the Company will agree that if the
Company exercises its option to issue Additional Notes for accrued and unpaid
interest on the New Securities at any interest payment date, Cinemark
International will add accrued and unpaid interest on the Mexico Senior Note to
principal at the next two consecutive interest payment dates on the Mexico
Senior Note.
Additional Equity Investment by Cinemark International
Prior to or contemporaneous with the consummation of the Exchange Offer
and the issuance of the New Securities, Cinemark International shall purchase an
additional 2,661,450 shares of common stock of the Company for an aggregate
purchase price of $10.0 million.
RISK FACTORS
Prior to deciding whether or not to accept the offer of New Securities in
the Exchange Offer, each Holder of Existing Securities should consider carefully
all information contained herein, particularly the factors described or
cross-referenced in the following paragraphs.
High Leverage; Losses
The Company is, and will continue to be, highly leveraged. At June 30,
1996, the Company's total long term liabilities were $29,590,373 and the Company
had a shareholders' deficit of approximately $6,701,540.
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The Company's high degree of leverage and shareholders' deficit will have
important consequences to holders of the New Securities, including the
following: (i) the ability of the Company to obtain additional financing in the
future for working capital, acquisitions, capital expenditures and other general
corporate purposes, should it need to do so, may be impaired; (ii) a substantial
portion of the Company's cash flow from operations will be required to be
dedicated to the payment of the Company's interest expense and principal
repayment obligations; (iii) the Company's degree of leverage may make it more
vulnerable to a downturn in its business or the economy generally. Any inability
of the Company to service its obligations in respect of the New Securities or
other indebtedness could have a significant adverse effect on the market value
and marketability of the New Securities.
As of June 30, 1996, the Company, through Cinemark de Mexico, operated
eleven theatres (114 screens) in Mexico. Governmental regulation of the motion
picture industry in Mexico differs significantly from regulation in the U.S.
Additionally, the Company's operations are subject to certain political,
economic and other uncertainties not encountered in domestic operations. The
Company's operations also face the additional risks of fluctuating currency
values, hard currency shortages and controls of foreign currency exchange. The
Company had net operating losses during fiscal years 1994 and 1995 due
principally to costs associated with the development of new multiplex theatres,
interest costs relating to its debt obligations and the devaluation of the
Mexican currency.
Dependence on Subsidiaries; Structural Subordination
The Existing Notes are, and the New Securities will be, obligations
exclusively of the Company. Since the Company conducts its operations through
Cinemark de Mexico, the Company's cash flow and consequent ability to service
its debt, including the New Securities, will be dependent upon the earnings of
Cinemark de Mexico and distributions of those earnings to the Company. Although
Cinemark de Mexico has guaranteed the obligations of the Company under the
Existing Securities, and will guarantee the obligations of the Company under the
New Securities, on a senior subordinated basis, any future subsidiaries or joint
ventures will have no obligation, contingent or otherwise, to guarantee the New
Securities or make any funds available to the Company. The Indenture does not
impose any limitations on the ability of subsidiaries of the Company (including
Cinemark de Mexico) to enter into agreements restricting their ability to
declare dividends or make distributions or advances to the Company. The claims
of holders of the New Securities upon any distribution of assets of any
subsidiary of the Company (other than Cinemark de Mexico) in the event of
liquidation or reorganization of such subsidiary would be subordinate to the
prior claims of present and future creditors of that subsidiary, including
holders of indebtedness and trade creditors thereof. In the event of a
reorganization of Cinemark de Mexico, the claims of holders of the New
Securities upon any distribution of assets of Cinemark de Mexico would be
subordinate to the prior claims of present and future holders of Senior Debt (as
defined in the Indenture) of Cinemark de Mexico to the same extent that the
claims of holders of the Notes are subordinated to the prior claims of Senior
Debt of the Company.
Subordination; Asset Encumbrances
The Existing Notes are, and the New Securities will be, subordinated in
right of payment to the prior payment in full of all Senior Debt of the Company
(including indebtedness under the Mexico Senior Credit Facility), whether
outstanding on the date of the Indenture or thereafter created, incurred or
assumed and all permissible renewals, extensions, refundings or refinancings
thereof, including the principal of (and premium, if any), interest on and all
other amounts due on or payable in connection with Senior Debt. Cinemark de
Mexico will guarantee the Company's obligations under the New Securities. The
indebtedness evidenced by Cinemark de Mexico's guarantee will be subordinated on
the same basis to Senior Debt of Cinemark de Mexico as the New Notes will be
subordinated to Senior Debt of the Company. As of June 30, 1996, the Company had
outstanding $8,950,000 of Senior Debt, and Cinemark de Mexico had outstanding
$7,550,000 of Senior Debt.
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The incurrence of additional Senior Debt is limited by the "Limitation on
Consolidated Debt" covenant contained in the Indenture. By reason of such
subordination, in the event of the insolvency, bankruptcy, liquidation,
reorganization, dissolution or other winding-up of the Company or Cinemark de
Mexico or upon certain defaults with respect to the acceleration of, or if a
judicial proceeding is pending with respect to any default under, any Senior
Debt, creditors who are holders of Senior Debt must be paid in full before the
holders of the New Securities may be paid. The assets of the Company and
Cinemark de Mexico following repayment of all Senior Debt may be insufficient to
pay the amounts due on the New Securities in the event of any insolvency,
bankruptcy, similar event or default.
Interest payment in the Form of New Notes
Under the Indenture, as amended by the Third Supplemental Indenture, the
Company will have the option to pay interest due on the New Securities in cash
or, for each interest period through February 1, 2000, in Additional Notes.
Any decision by the Company to make interest payments in Additional Notes
will depend on a variety of considerations, including the Company's obligation
to make interest payments in such form under the anticipated amendment to the
Mexico Senior Credit Agreement, the availability of cash to the Company at the
time, and alternative uses for such cash. The payment of interest in Additional
Notes involves certain disadvantages for holders of the New Securities. The
greater aggregate principal amount of New Securities available for sale as a
result of the issuance of Additional Notes to pay interest on the New Securities
may depress the market for the New Securities.
Mexico Senior Credit Agreement
The Mexico Senior Credit Agreement contains certain restrictions on the
Company's operations and requires the Company to achieve and maintain certain
financial ratios. Such restrictions include, among other things, limitations on
the ability of the Company and its subsidiaries to incur additional
indebtedness, to create, incur or permit the existence of certain liens, to make
certain investments, to make certain sales of assets, to effect certain
fundamental changes and to enter into certain types of transactions. Such
restrictions and covenants may limit the Company's ability to conduct its
business. Moreover, failure to achieve the prescribed financial ratios would
result in a default and could lead to the acceleration of the Company's
obligations under the Mexico Senior Credit Agreement, as well as the
acceleration of other indebtedness of the Company which by the terms of the
instruments creating, evidencing or governing such indebtedness is triggered
upon a default under the Mexico Senior Credit Agreement. There can be no
assurance that the Company would have sufficient resources or have access to
sufficient resources to pay its obligations under the Mexico Senior Credit
Facility if such indebtedness is accelerated.
Lack of Public Market for New Notes
There is no existing public market for the Existing Notes, and there can
be no assurance that such a market will develop for the New Securities, or if
such a market develops, of the liquidity of such market. If the New Securities
are traded after their initial issuance, they may trade at a discount, depending
upon prevailing interest rates, the market for similar securities and other
factors. Accordingly, no assurance can be given that a holder of the New
Securities will be able to sell such New Securities in the future or as to the
price at which such sale may occur.
Dependence upon Motion Picture Production and Performance
The Company's business is dependent both upon the availability of suitable
motion pictures for exhibition in its theatres and the performance of such films
in the Company's markets. Poor performance of films or
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disruption in the production of motion pictures by the major studios and/or
independent producers could have a material adverse effect on the Company's
business. Since the major film distributors have historically released those
films which they anticipate will be the most successful during the summer and
holiday seasons, poor performance of such films or disruption in the release of
films during such periods could adversely affect the Company's results for a
particular quarter.
THE EXCHANGE OFFER AND CONSENT SOLICITATION
Terms of the Exchange Offer
General
The Company hereby offers, upon the terms and subject to the conditions
set forth herein and in the accompanying Consent and Letter of Transmittal to
exchange (i) with respect to each $1,000 principal amount of its Existing Series
A Notes outstanding in the aggregate principal amount of $400,000, $1,000
original principal amount of its New Series A Notes, (ii) with respect to each
$1,000 original principal amount of its Existing Series B Notes outstanding in
the aggregate principal amount of $20,000,000, $1,000 original principal amount
of its New Series B Notes, (iii) with respect to each $1,000 original principal
amount of its Existing Series C Notes outstanding in the aggregate principal
amount of $2,000,000, $1,000 original principal amount of its New Series C Notes
and (iv) with respect to each outstanding Existing Warrant to purchase a share
of common stock of the Company, $3.757 original principal amount of its New
Series D Notes.
The Company will accept all Existing Securities duly tendered on or prior
to the Expiration Date, subject to certain conditions set forth herein and in
the Consent and Letter of Transmittal. See "--Conditions." The Company expressly
reserves the right, at its discretion, to waive any conditions to the Exchange
Offer except compliance with the Trust Indenture Act of 1939, as amended (the
"TIA"), and obtaining the Requisite Consents to the Proposed Amendments.
There are $400,000 aggregate principal amount of Series A Notes
outstanding, $20,000,000 aggregate principal amount of Series B Notes
outstanding, $2,000,000 aggregate principal amount of Series C Notes
outstanding, and outstanding warrants to purchase 379,073 shares of common stock
of the Company. This Offer, together with the Consent and Letter of Transmittal,
is being sent to all holders of record of such Existing Securities as of July
29, 1996. If all Existing Securities are exchanged pursuant to the Exchange
Offer, the Company will issue $434,233 aggregate original principal amount of
New Series A Notes (including Additional Series A Notes), $21,711,667 aggregate
original principal amount of New Series B Notes (including Additional Series B
Notes), $2,171,167 aggregate original principal amount of New Series C Notes
(including Additional Series C Notes) and $1,424,177 aggregate original
principal amount of New Series D Notes.
Tendering Holders of Existing Securities will not be required to pay
brokerage commissions or fees with respect to the exchange of Existing
Securities pursuant to the Exchange Offer. The Company will pay certain charges
and expenses in connection with the Exchange Offer.
Concurrently with the Exchange Offer, the Company hereby solicits Consents
from each Holder of the Existing Notes to the adoption of the Proposed
Amendments subject to the terms and conditions contained in this Exchange Offer
and the Consent and Letter of Transmittal, to the Indenture.
Expiration Date; Extensions; Amendments
The Exchange Offer will expire at 5:00 p.m., New York City time, on the
Initial Expiration Date, unless such date is extended (such date as extended,
the "Expiration Date"). The Company reserves the right to extend
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the Exchange Offer at its discretion, in which event the term "Expiration Date"
shall mean the latest date to which the Exchange Offer has been extended.
In order to extend the Expiration Date, the Company will notify the
Exchange Agent of any extension by oral or written notice and will mail to the
Holders of Existing Securities an announcement thereof, each prior to 9:00 a.m.,
New York City time, on the next business day after the previously scheduled
Expiration Date. Such announcement may state that the Company is extending the
Exchange Offer for a specified period of time.
The Company reserves the right (i) to delay acceptance of any Existing
Securities, to extend the Exchange Offer or to terminate the Exchange Offer and
to refuse to accept Existing Securities not previously accepted, if any of the
conditions set forth herein under "--Conditions" shall have occurred and shall
not have been waived by the Company, by giving oral or written notice of such
delay, extension or termination to the Exchange Agent, (ii) to amend the terms
of the Exchange Offer or the Consent Solicitation or (iii) waive any condition
to the Exchange Offer or the Consent Solicitation. Any such delay in acceptance,
extension, termination or amendment will be followed as promptly as practicable
by oral or written notice thereof. If the Exchange Offer is amended in a manner
determined by the Company to constitute a material change, the Company will
promptly disclose such amendment in a manner reasonably calculated to inform the
holders of the Existing Securities of such amendment.
Without limiting the manner in which the Company may choose to make public
announcements of any delay in acceptance, extension, termination or amendment of
the Exchange Offer, the Company shall have no obligation to publish, advertise,
or otherwise communicate any such public announcement, other than by making a
timely release to a financial news service.
Procedure for Tendering and Delivering Consents
The tender of Existing Securities pursuant to the Exchange Offer and in
accordance with the procedures set forth below will constitute a Consent with
respect to such tendered Existing Securities. Holders who tender Existing
Securities in the Exchange Offer are obligated to deliver Consents to the
Proposed Amendments.
Holders may not deliver Consents without tendering the Existing Securities.
To tender in the Exchange Offer, a Holder must properly complete, sign and
date the Consent and Letter of Transmittal, or a facsimile thereof and mail or
otherwise deliver such Consent and Letter of Transmittal or such facsimile,
together with the Existing Securities and any other required documents, and must
be received by the Exchange Agent prior to 5:00 p.m., New York City time, on the
Expiration Date. Signatures on a Consent and Letter of Transmittal or a notice
of withdrawal, as the case may be, must be guaranteed by a member firm of a
registered national securities exchange or of the National Association of
Securities Dealers, Inc. or a commercial bank or trust company having an office
or correspondent in the United States (an "Eligible Institution") unless the
Existing Securities tendered pursuant thereto are tendered (i) by a registered
holder who has not completed the box entitled "Special Issuance Instructions" or
"Special Delivery Instructions" on the Consent and Letter of Transmittal or (ii)
for the account of an Eligible Institution.
The tender by a holder of Existing Securities will constitute an agreement
between such holder and the Company in accordance with the terms and subject to
the conditions set forth herein and in the Consent and Letter of Transmittal.
Delivery of all documents must be made to the Exchange Agent at its
address set forth herein. Holders may also request that their respective
brokers, dealers, commercial banks, trust companies or nominees effect such
tender for such holders.
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The method of delivery of Existing Securities and the Consent and Letter
of Transmittal and all other required documents to the Exchange Agent is at the
election and risk of the holders. Instead of delivery by mail, it is recommended
that holders use an overnight or hand delivery service. In all cases, sufficient
time should be allowed to assure timely delivery. No Consent and Letter of
Transmittal or Existing Securities should be sent to the Company.
Only a Holder of Existing Securities may tender such Existing Securities
in the Exchange Offer. The term "Holder" with respect to the Exchange Offer
means any person in whose name Existing Securities are registered on the books
of the Company or any other person who has obtained a properly completed bond
power from the registered holder.
Any beneficial holder whose Existing Securities are registered in the name
of his broker, dealer, commercial bank, trust company or other nominee and who
wishes to tender his Existing Securities should contact the Holder promptly and
instruct such registered holder to tender on his behalf. If such beneficial
holder wishes to tender on his own behalf, such beneficial holder must, prior to
completing and executing the Consent and Letter of Transmittal and delivering
his Existing Securities, either make appropriate arrangements to register
ownership of the Existing Securities in such holder's name or obtain a properly
completed bond power from the Holder. The transfer of record ownership may take
considerable time.
If the Consent and Letter of Transmittal is signed by a person other than
the Holder of any Existing Securities listed therein, such Existing Securities
must be endorsed or accompanied by appropriate bond powers which authorize such
person to tender the Existing Securities on behalf of the registered holder, in
either case signed as the name of the Holder or Holders appears on the Existing
Securities.
If the Consent and Letter of Transmittal or any Existing Securities or
bond powers are signed by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of a corporation or others acting in a fiduciary or
representative capacity, such persons should so indicate when signing, and
unless waived by the Company, evidence satisfactory to the Company of their
authority to so act must be submitted with the Consent and Letter of
Transmittal.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance and withdrawal of the tendered Existing Securities will be
determined by the Company in its sole discretion, which determination will be
final and binding. The Company reserves the absolute right to reject any and all
Existing Securities not validly tendered or any Existing Securities the
Company's acceptance of which would, in the opinion of counsel for the Company,
be unlawful. The Company also reserves the absolute right to waive any
irregularities or conditions of tender as to particular Existing Securities. The
Company's interpretation of the terms and conditions of the Exchange Offer
(including the instructions in the Consent and Letter of Transmittal) will be
final and binding on all parties. Unless waived, any defects or irregularities
in connection with tenders of Existing Securities must be cured within such time
as the Company shall determine. Neither the Company, the Exchange Agent nor any
other person shall be under any duty to give notification of defects or
irregularities with respect to tenders of Existing Securities nor shall any of
them incur any liability for failure to give such notification. Tenders of
Existing Securities will not be deemed to have been made until such
irregularities have been cured or waived. Any Existing Securities received by
the Exchange Agent that are not validly tendered and as to which the defects or
irregularities have not been cured or waived will be returned by the Exchange
Agent without cost to the tendering holder of such Existing Securities unless
otherwise provided in the Consent and Letter of Transmittal, as soon as
practicable following the Expiration Date.
Book-Entry Transfer
Within two business days after the date hereof, the Exchange Agent will
establish a new account or utilize an existing account with respect to the
Existing Securities at The Depositary Trust Company ("DTC"), a "Book- Entry
Transfer Facility" (to the extent such arrangements have not been made
previously by the Exchange Agent). Any financial institution that is a
participant in the Book-Entry Transfer Facility system and whose name appears on
a security position listing it as the owner of the Existing Securities may make
book-entry delivery of Existing Securities by causing the Book-Entry Transfer
Facility to transfer such Existing Securities into the Exchange Agent's account
in accordance with the Book-Entry Transfer Facility's procedures for such
transfer. However, although delivery of Existing Securities may be effected
through book-entry transfer into the Exchange Agent's account at a Book-Entry
Transfer Facility, the Consent and Letter of Transmittal (or a manually signed
facsimile thereto, properly completed and validly executed, with any required
signature guarantees or Agent's Message (as defined below)), and any other
required documents, must, in any case, be received by the Exchange Agent at its
address set forth on the back cover of this Offer to Exchange on or prior to the
Expiration Date or the guaranteed delivery procedures described below must be
complied with. The confirmation of a book-entry transfer of Existing Securities
into the Exchange Agent's account at a Book-Entry Transfer Facility as described
above is referred to herein as a "Book-Entry Confirmation." Delivery of
documents to Book-Entry Transfer Facility in accordance with such Book-Entry
Transfer Facility's procedures does not constitute delivery to the Exchange
Agent.
The term "Agent's Message" means a message transmitted by a Book-Entry
Transfer Facility to, and received by, the Exchange Agent and forming a part of
a Book-Entry Confirmation, which states that such Book-Entry Transfer Facility
has received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Existing Securities that such participant has
received and agrees to be bound by the terms of the Consent and Letter of
Transmittal, and the Company may enforce such agreement against the participant.
Guaranteed Delivery Procedures
Holders who wish to tender their Existing Securities and (i) whose
Existing Securities are not immediately available, or (ii) who cannot deliver
their Existing Securities, the Consent and Letter of Transmittal or any other
required documents to the Exchange Agent prior to the Expiration Date, may
effect a tender if:
(a) The tender is made through an Eligible Institution;
(b) Prior to 5:00 p.m., New York City time, on the Expiration Date,
the Exchange Agent receives from such Eligible Institution a properly
completed and duly executed Notice of Guaranteed Delivery (by facsimile
transmission, mail or hand delivery) setting forth the name and address of
the holder of the Existing Securities, the certificate number or numbers
of such Existing Securities and the principal amount of Existing
Securities tendered, stating that the tender is being made thereby, and
guaranteeing that, within five business days after the date of execution
of the Notice of Guaranteed Delivery, the Consent and Letter of
Transmittal (or facsimile thereof), together with the certificate(s)
representing the Existing Securities to be tendered in proper form for
transfer and any other documents required by the Letter of Transmittal,
will be deposited by the Eligible Institution with the Exchange Agent; and
(c) Such properly completed and executed Consent and Letter of
Transmittal (or facsimile thereof), together with the certificate(s)
representing all tendered Existing Securities in proper form for transfer
and all other documents required by the Consent and Letter of Transmittal
are received by the Exchange Agent within five business days after the
date of execution of the Notice of Guaranteed Delivery.
Withdrawal of Tenders
Tenders of Existing Securities may be withdrawn at any time until the
Consent Date and, thereafter, only if the Exchange Offer with respect to the
Existing Securities is terminated without any Existing Securities being
exchanged thereunder. In the event of such a termination, the Existing
Securities will be returned to the
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tendering Holder as promptly as practicable. Consents relating to the Existing
Notes that have been tendered may be revoked prior to the Consent Date only if
such Existing Notes are withdrawn prior to the Consent Date.
To withdraw a tender of Existing Securities in the Exchange Offer, a
written or facsimile transmission notice of withdrawal must be received by the
Exchange Agent at its address set forth herein prior to 5:00 p.m., New York City
time, on the Expiration Date and prior to acceptance for exchange thereof by the
Company. Any such notice of withdrawal must (i) specify the name of the person
having deposited the Existing Securities to be withdrawn (the "Depositor"), (ii)
identify the Existing Securities to be withdrawn (including the certificate
number or numbers and principal amount of such Existing Securities), (iii) be
signed by the Depositor in the same manner as the original signature on the
Consent and Letter of Transmittal by which such Existing Securities were
tendered (including required signature guarantees) or be accompanied by
documents of transfer sufficient to permit the Trustee with respect to the
Existing Securities to register the transfer of such Existing Securities into
the name of the Depositor withdrawing the tender and (iv) specify the name in
which any such Existing Securities are to be registered, if different from that
of the Depositor. All questions as to the validity, form and eligibility
(including time of receipt) of such withdrawal notices will be determined by the
Company, whose determination shall be final and binding on all parties. Any
Existing Securities so withdrawn will be deemed not to have been validly
tendered for purposes of the Exchange Offer and no New Securities will be issued
with respect thereto unless the Existing Securities so withdrawn are validly
retendered. Any Existing Securities which have been tendered but which are not
accepted for exchange will be returned by the Exchange Agent to the holder
thereof without cost to such holder as soon as practicable after withdrawal,
rejection of tender or termination of the Exchange Offer. Properly withdrawn
Existing Securities may be retendered by following one of the procedures
described above under "--Procedure for Tendering" at any time prior to the
Expiration Date.
Conditions
The Exchange Offer and the Consent Solicitations are part of a refinancing
plan (the "Refinancing Plan") pursued by the Company to enhance the Company's
and its subsidiary Cinemark de Mexico's financial and operating flexibility. The
Company will exchange for Existing Securities, New Securities validly tendered
pursuant to the Exchange Offer, subject to certain conditions set forth in the
Exchange Offer and in the Letters of Transmittal. Notwithstanding any other
provision of the Exchange Offer and Consent and Letter of Transmittal to the
contrary, the Company's obligation to accept for exchange Existing Securities
validly tendered pursuant to the Exchange Offer is conditioned upon (i) the
valid tender pursuant to the Exchange Offer by the Holders of all of the
outstanding Existing Series B Notes and Existing Series C Notes prior to the
Initial Expiration Date and the Company obtaining the Requisite Consents (the
"Exchange Condition"), (ii) the satisfaction or waiver of the Series A
Condition, (iii) the execution of the Third Supplemental Indenture providing for
the Proposed Amendments following receipt of the Requisite Consents (the
"Supplemental Indenture Condition") and (iv) satisfaction or waiver of the
General Conditions (as defined below). The Company, in its sole discretion, may
waive any of the conditions of, or amend any of the terms of, the Exchange Offer
and the Consent Solicitation, in whole or in part from time to time. Except for
the condition described in clause (iii) above with respect to receipt by the
Company of Requisite Consents, the Company, in its sole discretion, may waive
any of these conditions, in whole or in part, at any time and from time to time.
Notwithstanding any other provisions of, or any extension of, the Offer
and the Consent Solicitation, the Company will not be required to accept for
purchase, or to pay for, Notes properly tendered and Consents delivered pursuant
to the Offer and the Consent Solicitation and may terminate, extend or amend the
Exchange Offer and the Consent Solicitation and may (subject, if applicable, to
Rule 14e-1(c) under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), which requires that an offeror pay the consideration offered or
return the securities deposited by or on behalf of the Holders thereof promptly
after the termination or withdrawal of a tender offer) modify or otherwise amend
the Offer and the Consent Solicitation, on or prior
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to the Expiration Date, if (i) the Exchange Condition, (ii) the Supplemental
Indenture Condition and (iii) the General Conditions have not been satisfied.
For purposes of the foregoing provision, all of the "General Conditions"
shall be deemed to be satisfied unless any of the following conditions shall
occur on or after the date of this Exchange Offer and prior to the Expiration
Date:
(i) there shall have been instituted, threatened or be pending any
action or proceeding before or by any court, governmental, regulatory or
administrative agency or instrumentality, or by any other person, in
connection with the Exchange Offer or the Consent Solicitation that is, or
is reasonably likely to be, or which would or might be, in the sole
judgment of the Company, materially adverse to the business, operations,
properties, condition (financial or otherwise), assets, liabilities or
prospects of the Company and its subsidiaries, taken as a whole, or which
would or might, in the sole judgment of the Company, prohibit, prevent,
restrict or delay consummation of the Exchange Offer or the Consent
Solicitation;
(ii) there shall have occurred any material adverse development, in
the sole judgment of the Company, with respect to any action or proceeding
concerning the Company and its subsidiaries, taken as a whole;
(iii) there exists an order, statute, rule, regulation, executive
order, stay, decree, judgment or injunction that shall have been proposed,
enacted, entered, issued, promulgated, enforced or deemed applicable by
any court or governmental, regulatory or administrative agency or
instrumentality that, in the sole judgment of the Company, would or might
prohibit, prevent, restrict or delay consummation of the Exchange Offer or
the Consent Solicitation, or that is, or is reasonably likely to be, in
the sole judgment of the Company, materially adverse to the business,
operations, properties, condition (financial or otherwise), assets,
liabilities or prospects of the Company and its subsidiaries, taken as a
whole;
(iv) there shall have occurred or be likely to occur any event
affecting the business or financial affairs of the Company or any of its
subsidiaries that, in the sole judgment of the Company, would or might
prohibit, prevent, restrict or delay consummation of, or could materially
impair the contemplated benefits to the Company of, the Exchange Offer or
the Consent Solicitation;
(v) the Trustee shall have objected in any respect to, or taken any
action that could, in the sole judgment of the Company, adversely affect
the consummation of the Exchange Offer or the Consent Solicitation or the
Company's ability to effect the Proposed Amendments or shall have taken
any action that challenges the validity or effectiveness of, or shall have
objected in any respect to, the procedures used by the Company in
soliciting the Consents (including the form thereof) or in the making of
the Exchange Offer or the Consent Solicitation or the acceptance of, or
payment for, the Notes; or
(vi) there shall have occurred (1) any general suspension of, or
limitation on prices for, trading in securities in the United States
securities or financial markets, (2) any significant adverse change in the
price of the Existing Notes or in the United States securities or
financial markets, (3) a material impairment in the trading market for
debt securities, (4) a declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States (whether
or not mandatory), (5) any limitation (whether or not mandatory) by a
government authority, or other event that, in the reasonable judgment of
the Company, might affect the extension of credit by banks or other
lending institutions in the United States, (6) a commencement of a war,
armed hostilities or other national or international crisis directly or
indirectly involving the United States or (7) in the case of any of the
foregoing existing on the date hereof, a material acceleration or
worsening thereof.
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The conditions to the Exchange Offer and the Consent Solicitation are for
the sole benefit of the Company and may be asserted by the Company in its sole
discretion regardless of the circumstances giving rise to such conditions, and
may be waived by the Company, in whole or in part at any time and from time to
time, in its sole discretion, whether or not any other condition of the Exchange
Offer and the Consent Solicitation is also waived. Any determination by the
Company concerning the events described in this section shall be final and
binding upon all persons.
Although the Company has no present plans or arrangements to do so, the
Company reserves the right to amend, at any time, the terms of the Offer or the
Consent Solicitation. The Company will give Holders notice of such amendments as
may be required by applicable law. If there is any material amendment or waiver
of any condition, Putnam's tender may, at its option, be withdrawn.
Exchange Agent
United States Trust Company of Texas, N.A. has been appointed as Exchange
Agent for the Exchange Offer. Questions and requests for assistance and requests
for additional copies of this Exchange Offer or of the Consent and Letter of
Transmittal should be directed to the Exchange Agent addressed as follows:
<TABLE>
<S> <C>
By Mail or Hand Delivery: United States Trust Company of Texas, N.A.
2001 Ross Avenue, Suite 2700
Dallas, Texas 75201-2936
Attn: Corporate Trust Department
Facsimile Transmission: (214) 754-1303
Attn: Corporate Trust Department
Confirm: (214) 754-1255
</TABLE>
Fees and Expenses
The expenses of soliciting tenders pursuant to the Exchange Offer will be
borne by the Company. The principal solicitation for tenders pursuant to the
Exchange Offer is being made by mail. Additional solicitations may be made by
officers and regular employees of the Company and its affiliates in person, by
telegraph or telephone.
The Company will not make any payments to brokers, dealers or other persons
soliciting acceptances of the Exchange Offer. The Company, however, will pay the
Exchange Agent reasonable and customary fees for its services and will reimburse
the Exchange Agent for its reasonable out-of-pocket expenses in connection
therewith.
The Company will pay all transfer taxes, if any, applicable to the exchange
of Existing Securities pursuant to the Exchange Offer. If, however, certificates
representing Existing Securities or New Securities for principal amounts not
tendered or accepted for exchange are to be delivered to, or are to be
registered or issued in the name of, any person other than the registered holder
of the Existing Securities tendered, or if tendered Existing Securities are
registered in the name of any person other than the person signing the Consent
and Letter of Transmittal, or if a transfer tax is imposed for any reason other
than the exchange of Existing Securities pursuant to the Exchange Offer, then
the amount of any such transfer taxes (whether imposed on the registered holder
or any other persons) will be payable by the tendering holder. If satisfactory
evidence of payment of such taxes or exemption therefrom is not submitted with
the Consent and Letter of Transmittal, the amount of such transfer taxes will be
billed directly to such tendering holder.
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Accounting Treatment
No gain or loss for accounting purposes will be recognized by the Company
upon the consummation of the Exchange Offer. The expenses of the Exchange Offer
will be amortized by the Company over the term of the New Securities under
generally accepted accounting principles.
PROPOSED AMENDMENTS TO THE INDENTURE
Proposed Amendments
Set forth below is a summary description of the Proposed Amendments. This
description is qualified by reference to the full provisions of the Indenture
and the provisions of the Proposed Amendments, which provisions are
substantially in the form set forth in Annex I hereto. Capitalized terms used
herein and not otherwise defined shall have the meanings ascribed to them in the
Indenture. Each Holder of Existing Notes, by executing and delivering a Consent,
will consent to the proposed Amendments as set forth in Annex I.
The Proposed Amendments will be set forth in the Third Supplemental
Indenture to be executed by the Company and the Trustee on the Expiration Date
substantially in the form attached as Annex II. The Supplemental Indenture,
however, will not become operative until immediately prior to the consummation
of the Repurchase Offer, and in no event will the Supplemental Indenture become
operative unless Holders of not less than the applicable aggregate principal
amount of the outstanding Existing Notes have validly consented to the Proposed
Amendments and not validly revoked such Consents.
The Proposed Amendments will (a) provide for the issuance of the New
Securities and (b) extend the operation of certain financial covenants. The
Company believes that the Proposed Amendments will improve the Company's and
Cinemark de Mexico's financial and operating flexibility.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
General
The following discussion summarizes the material federal income tax
consequences applicable to Holders whose Existing Notes and Existing Warrants
are tendered and accepted in the Exchange Offer in exchange for the New
Securities and Additional Notes (collectively referred to herein as "New
Notes"). The discussion is based on current law, which is subject to change. Any
such change could be retroactive.
The discussion does not cover all aspects of federal income taxation that
may be relevant to a particular Holder in light of his individual investment
circumstances or to Holders that may be subject to special tax treatment (such
as insurance companies, financial institutions, tax-exempt organizations
(including qualified pension or profit sharing plans), and foreign taxpayers),
and no aspect of foreign, state, or local taxation is addressed. The discussion
is limited to Holders who currently hold their Existing Notes and Existing
Warrants and will hold their New Notes as "capital assets" within the meaning of
Section 1221 of the Internal Revenue Code of 1986 (the "Code").
EACH PROSPECTIVE HOLDER SHOULD CONSULT HIS OWN TAX ADVISOR FOR THE FEDERAL,
STATE, LOCAL AND FOREIGN TAX CONSEQUENCES TO HIM AS A RESULT OF THE EXCHANGE
OFFER AND THE OWNERSHIP AND DISPOSITION OF THE NEW NOTES.
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Exchange of Existing Notes for New Securities. An exchange of Existing
Notes for New Securities will constitute a recapitalization pursuant to Code
Section 368(a)(1)(E). Accordingly, (i) Holders of Existing Notes will not
recognize gain or loss on the exchange of the Existing Notes for New Securities
(except with respect to other property received in the Exchange Offer and
accrued but unpaid interest as further discussed below); (ii) a Holder's basis
in his New Security will be the same as the adjusted basis in his Existing Note
exchanged therefor, increased by any gain recognized by an exchanging Holder as
a result of the Exchange Offer; and (iii) an exchanging Holder will have a
holding period in his New Securities that includes the holding period during
which the Holder held the Existing Notes.
Notwithstanding the general rule of nonrecognition (described above), an
exchanging Holder will recognize gain as a result of the Exchange Offer to the
extent of the lesser of (i) the amount of gain realized pursuant to the Exchange
Offer (which amount is equal to the difference between the fair market value of
the New Securities received and an exchanging Holder's adjusted basis in the
Existing Notes exchanged therefor) and (ii) the fair market value of any "other
property" received pursuant to the Exchange Offer. Under Code Section 356(d) the
term "other property" means the fair market value of the excess of the principal
amount of New Securities received over the principal amount of Existing Notes
exchanged therefor. The meaning of "principal amount" for this purpose is not
clear. The IRS could argue that "principal amount" means the issue price of the
New Securities (which would be equal to the stated principal amount) and the
adjusted issue price of the Existing Notes (which for exchanging Holders who
acquired their Existing Notes at original issuance, would be equal to the issue
price of the Existing Notes plus accrued original issue discount on such
Existing Notes). In such event, because the issue price of the New Securities
will be greater than the adjusted issue price of the Existing Notes, exchanging
Holders may be treated as receiving "other property" and, accordingly, would be
required to recognize a portion of the gain, if any, realized pursuant to the
Exchange Offer. Subject to the possible treatment as ordinary income under the
market discount rules, any gain recognized will be capital gain and will be
long-term capital gain if the Existing Notes are capital assets and have been
held for more than one year. Because the meaning of the term "principal amount"
is not established under existing law, each exchanging Holder is urged to
consult his own tax advisor with regard to this issue and possible treatment as
ordinary income under the market discount rules.
An exchanging Holder will be treated as receiving interest income as a
result of the Exchange Offer to the extent that the Additional Notes received
upon the Exchange Offer by such Holder are attributable to accrued but unpaid
interest on the Existing Notes since the beginning of such Holder's holding
period. Exchanging Holders will be required to include in income original issue
discount (if any) on the Existing Notes through the closing of the Exchange
Offer.
Exchange of Existing Warrants for New Securities. Holders of Existing
Warrants who exchange such Warrants for New Securities pursuant to the Exchange
Offer will recognize gain or loss in an amount equal to the difference between
the fair market value of the New Securities received and the Holder's adjusted
tax basis in the Existing Warrants exchanged therefor. Such gain or loss will be
long term capital gain or loss to the extent that an Existing Warrant
surrendered constitutes a capital asset to the Holder within the meaning of
Section 1221 of the Code and has been held by the Holder for more than one year.
Each exchanging Holder of Existing Securities should consult his own tax
advisor regarding the tax consequences resulting from the Exchange Offer in
light of his particular circumstances.
Taxation of New Notes
Interest. A Holder will be required to include in income as ordinary
interest income each year a portion of the original issue discount on the New
Notes. See "--Original Issue Discount" below.
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Original Issue Discount. The New Securities will be treated for tax
purposes as issued at an original issue discount. Accordingly, each Holder of
the New Securities will be required to include in his income, as ordinary
income, each year a portion of the original issue discount on the New Securities
so as to provide a constant yield to maturity.
The total amount of original issue discount with respect to each New
Security will equal the excess of its stated redemption price at maturity over
its issue price. The stated redemption price at maturity of each New Security is
the sum of all payments to be made on the New Security other than qualified
stated interest payments (i.e., generally cash interests payments that are
unconditionally payable at a fixed rate at least annually). Interest payments on
the New Securities will not be considered qualified stated interest because the
Company's option of issuing Additional Notes in lieu of interest payments on the
New Securities will cause cash interest payments to be conditional. Thus, all
payments of principal and interest on the New Securities will be included in the
stated redemption price at maturity. Because the New Securities have adequate
stated interest, the issue price of the New Securities will be the stated
principal amount (equal to the aggregate amount of all payments due under the
debt instrument excluding any amount of stated interest).
Except as provided below in "--Acquisition Premium" and "--Amortizable Bond
Premium," the amount of original issue discount required to be included in a
Holder's income in any tax year is determined by allocating to each day during
such tax year in which a Holder holds a New Security a pro rata portion (the
"daily portion") of the total amount of original issue discount with respect to
such New Security attributable to the "accrual period" (the six-month period
ending on January 31 or July 31 of each year) in which such day is included. The
amount of original issue discount on the New Security attributable to an accrual
period is equal to the product of (i) the "adjusted issue price" at the
beginning of the accrual period of the New Security (the issue price plus
previous accruals of original issue discount reduced by any payments other than
qualified stated interest) and (ii) the yield to maturity of the New Security,
adjusted appropriately for the length of the accrual period. The "yield to
maturity" of a debt instrument is the interest rate that will produce an amount
equal to the issue price of the debt instrument used in computing the present
value of all payments to be made pursuant to the debt instrument. The Treasury
regulations require that the yield to maturity remain constant over the term of
the debt instrument. In addition, the Treasury regulations require that because
the Company has the option of paying cash interest on the New Securities or
issuing Additional Notes, the yield to maturity is to be determined using the
option that minimizes the yield to the Company, which in this case is the yield
to maturity provided under the New Securities providing for cash interest
payments.
If the Company decides to issue an Additional Note in lieu of cash interest
payments on a New Security, the New Security and the Additional Note will be
aggregated and treated as a single debt instrument. The aggregated debt
instrument is considered reissued for purposes of the original issue discount
rules on the date such Additional Note is issued and, thus, the yield to
maturity on such new debt instrument must be determined. Neither interest
payments on New Securities that will be satisfied by the issuance of Additional
Notes nor interest payments on the Additional Notes will be qualified stated
interest payments. Thus, all payments on Additional Notes issued will be treated
as included in the New Security's stated redemption price at maturity.
Accordingly, such Additional Note aggregated together with a New Security will
also be considered issued with an original issue discount, a portion of which
must be included in a Holder's income each year on a constant yield to maturity
basis, as described in the preceding paragraph.
The Company will report to Holders and to the Internal Revenue Service
("IRS") the amount of original issue discount that accrues each year.
Sale, Redemption, and Maturity of the New Notes. A Holder of a New Note
will recognize gain or loss, if any, on the sale, redemption, and maturity of a
New Note equal to the difference between the fair market value of all
consideration received (excluding amounts received that are attributable to
accrued and unpaid interest, which amounts must be included as ordinary interest
income) upon such sale, redemption, or maturity
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<PAGE>
of the New Note and the Holder's adjusted tax basis in the New Note. A Holder's
adjusted tax basis in a New Note generally will be equal to the Holder's
adjusted tax basis in the Existing Note exchanged therefor, increased by any
gain recognized as a result of the Exchange Offer and the amount of accrued
original issue discount, if any, less any principal payments received by such
Holder. Except to the extent of any unrecognized accrued market discount,
discussed below, such gain or loss will be long term capital gain or loss if
such New Note is a capital asset (within the meaning of Section 1221 of the
Code) of the Holder and is held for more than one year.
Acquisition Premium. A Holder and a subsequent Holder (i.e., a Holder who
purchases his New Note subsequent to original issuance) of a New Note will be
entitled to a reduction in the amount of original issue discount required to be
included in his income if the Holder purchases such New Note with "acquisition
premium". A Holder of a New Security received in the Exchange Offer will have
acquisition premium if his adjusted tax basis in the New Security is less than
or equal to the stated redemption price at maturity and exceeds the issue price
of such New Security. A subsequent Holder will have acquisition premium with
respect to a New Note if the New Note is purchased for a price less than or
equal to the stated redemption price at maturity but greater than the adjusted
issue price of the New Note. The acquisition premium is the amount by which the
purchase price exceeds the adjusted issue price. The adjusted issue price of a
New Note will be the issue price increased by the amount of original issue
discount previously includible in the gross income of any Holder (determined
without regard to any reduction for acquisition premium or amortizable bond
premium (as defined below)) reduced by any payments other than qualified stated
interest. The amount of the reduction to which a Holder may be entitled in any
given year is equal to a fraction, the numerator of which is the amount of the
acquisition premium and the denominator of which is the excess of the sum of all
amounts payable on the New Note, other than payments of qualified stated
interest, over the adjusted issue price of the New Note on the date of purchase.
Holders and subsequent Holders of New Notes should consult their own tax
advisors regarding the amount of any acquisition premium and reduction with
respect to their New Notes.
Amortizable Bond Premium. If the Holder's initial tax basis in his New Note
at acquisition exceeds the stated redemption price at maturity, the Holder will
not be required to include original issue discount in his income, and the excess
will be treated as "amortizable bond premium." In such case, the Holder may
elect under Section 171 of the Code to amortize the bond premium annually under
a constant yield method. The Holder's adjusted tax basis in the New Note is
decreased by the amount of the allowable amortization. Amortizable bond premium
is treated as an offset to interest received on the obligation rather than as an
interest deduction, except as may be provided in the Treasury regulations. An
election to amortize bond premium would apply to amortizable bond premium on all
taxable bonds held at or acquired after the beginning of the Holder's taxable
year as to which the election is made, and may be revoked only with the consent
of the IRS. Holders who acquire their New Notes with amortizable bond premium
should consult their own tax advisor.
Market Discount. Generally, a subsequent Holder who purchases his New Note
at a "market discount" (i.e, at a price below the adjusted issue price (defined
above)) must treat gain recognized on the disposition of such New Note as
ordinary income to the extent market discount accrued while the debt instrument
was held by the Holder, unless the Holder made an election to include such
market discount in income as it accrued. Such an election would apply to all
market discount obligations acquired on or after the first day of the first
taxable year to which such election applies and may be revoked only with the
consent of the IRS. In addition, a Holder (other than a subsequent Holder) will
have market discount on a New Note if after receipt of such New Note, the
Holder's basis in the New Note is less than the New Note's issue price (as
defined above).
The amount of market discount that accrues while a Holder holds New Notes
will be equal to the amount which bears the same ratio to the market discount on
the New Notes as the number of days on which the Holder holds the New Notes
bears to the number of days from the date the Holder acquires the New Notes
through the
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date of their maturity. Alternatively, a Holder of New Notes may elect to accrue
market discount on the basis of a constant yield method, rather than the ratable
accrual method described in the preceding sentence.
Holders and subsequent Holders should consult their own tax advisors
regarding the amount of any market discount accrued with respect to their New
Note.
Subject to the rules regarding gain recognized as a result of the excess
principal amount rules (discussed above), the Code provides that "under
regulations" (which have not yet been issued), accrued market discount on a
market discount bond is not recognized as ordinary income at the time of the
bond's disposition if the disposition occurs in a "nonrecognition transaction,"
including a recapitalization. Instead, accrued market discount on a market
discount bond disposed of in a nonrecognition transaction is converted into
accrued market discount on property received in the transaction if that property
is a market discount bond. If the property received is not a market discount
bond, accrued market discount on the old market discount bond is treated as
ordinary income on the disposition of the property received in exchange
therefor, limited (pursuant to the Committee Reports) to the extent of the gain
thereon.
A Holder of Existing Notes that have accrued market discount should not be
required to recognize that accrued market discount as ordinary income when the
Holder exchanges those instruments for New Securities; rather the accrued market
discount should be allocated to the respective New Securities received in the
exchange (this conclusion may depend on the issuance of as-yet unissued
implementing regulations). Although no regulations or rules have been provided
to determine how such accrued market discount should be allocated, the accrued
market discount should be allocated in the same manner as tax basis is
allocated. The portion of the accrued market discount allocated to New
Securities will be treated as ordinary income at the disposition of such New
Securities, but not in excess of the total gain recognized.
Under the market discount rules, Holders of Existing Notes with accrued
market discount may be required to defer the deduction of a portion of the
interest on any indebtedness incurred or maintained to purchase or carry their
Existing Notes. Any interest expense which has been deferred by Holders of
Existing Notes who participate in the exchange will continue to be deferred and
will be deductible only on disposition of the New Securities received in the
exchange. The market discount rules also provide that any Holder of New Notes
acquired at a market discount may be required to defer the deduction of a
portion of the interest on any indebtedness incurred or maintained to purchase
or carry the New Notes until the New Notes are disposed of in a taxable
transaction. This rule will not apply if the Holder elects to include accrued
market discount in income currently.
Holders should consult their own tax advisors regarding the amount of any
market discount, if any, accrued with respect to their New Notes or that may be
treated as carried over from their Existing Notes and the limitation on interest
deductions attributable to the New Notes.
Backup Withholding
A Holder of New Notes may be subject to backup withholding at the rate of
31% with respect to interest paid on or gross proceeds from the sale of the New
Notes, unless such Holder (a) is a corporation or comes within certain other
exempt categories or (b) provides a correct taxpayer identification number,
certifies as to no loss of exemption from backup withholding, and otherwise
complies with applicable requirements of the backup withholding rules. A Holder
of New Notes who does not provide the Company with his correct taxpayer
identification number may be subject to penalties imposed by the IRS. Holders of
New Notes should consult their tax advisors as to their qualification for
exemption from withholding and the procedure for obtaining such exemption.
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The Company will report to the Holders of the New Notes and the IRS the
amount of any "reportable payments" (including any interest paid) and any amount
withheld with respect to the New Notes during the calendar year.
Any amounts withheld under the backup withholding rules will be allowed as
a credit against the Holder's federal income tax liability, provided that the
required information is timely furnished to the IRS.
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DESCRIPTION OF CERTAIN AGREEMENTS
Set forth below is a summary of the Registration Rights Agreement to which
the Company will become a party upon consummation of the Exchange Offer. The
summary does not purport to be complete and is qualified in its entirety by
reference to such agreement.
Registration Rights Agreement
In connection with the issuance of the New Series D Notes, the Company and
the holders of the New Series D Notes will enter into a Registration Rights
Agreement pursuant to the terms of which the Company will grant the holders of
New Series D Notes certain demand and incidental registration rights with
respect to the New Series D Notes held by them.
EXCHANGE AGENT; MISCELLANEOUS
The Company has engaged United States Trust Company of Texas, N.A., to act
as the Exchange Agent in connection with the Exchange Offer and the Consent
Solicitation. In its capacity as Exchange Agent, United States Trust Company of
Texas, N.A. may contact Holders regarding the Exchange Offer and the Consent
Solicitation and may request brokers, dealers and other nominees to forward this
Offer to Exchange and related materials to beneficial owners of Existing
Securities. Any Holder who has questions concerning the terms of the Exchange
Offer and the Consent Solicitation may contact the Exchange Agent at the address
and telephone number set forth on the back cover page of this Offer to Exchange.
The Company has agreed to pay the Exchange Agent reasonable and customary
compensation and to reimburse the Exchange Agent for its reasonable
out-of-pocket expenses, including legal fees, in connection with its services as
Exchange Agent.
In connection with the Exchange Offer and the Consent Solicitation,
directors and officers of the Company may solicit tenders and Consents by use of
the mails, personally or by telephone, facsimile, telegram or other similar
messages. The Company may also pay brokerage houses and other custodians,
nominees and fiduciaries the reasonable out-of-pocket expenses incurred by them
in forwarding copies of this Offer to Exchange and related documents to the
beneficial owners of the Existing Securities and in handling or forwarding
tenders of Existing Securities and deliveries of accompanying Consents by their
customers.
August 30, 1996 CINEMARK MEXICO (USA), INC.
51
<PAGE>
Facsimile copies of the Consent and Letter of Transmittal, properly
completed and validly executed, will be accepted. Consents and Letters of
Transmittal, certificates for Existing Notes and any other required documents
should be sent or delivered by each Holder of Existing Notes or such Holder's
broker, dealer, commercial bank or trust company to the Exchange Agent at one of
its addresses set forth below.
<TABLE>
<CAPTION>
The Exchange Agent for the Exchange Offer is:
United States Trust Company of Texas, N.A.
<S> <C> <C>
By Registered or Certified Mail: By Facsimile Transmission: By Hand/Overnight Delivery:
(for Eligible Institutions Only):
United States Trust Company (214) 754-1303 United States Trust Company
of Texas, N.A. of Texas, N.A.
2001 Ross Avenue, Suite 2700 2001 Ross Avenue, Suite 2700
Dallas, Texas 75201-2936 Confirmation Telephone: Dallas, Texas 75201-2936
Attention: Bill Barber (214) 754-1255 Attention: Bill Barber
(214) 754-1255
</TABLE>
Requests for assistance should be directed to the Exchange Agent. Requests
for additional copies of this Offer to Purchase and Consent Solicitation, and
any Consents and Letters of Transmittal, should be directed to the Company. You
may also contact your local broker, dealer, commercial bank, trust company or
nominee for assistance concerning the Exchange Offer and the Consent
Solicitation.
The Company address is:
Cinemark Mexico (USA), Inc.
7502 Greenville Avenue, Suite 800
Dallas, Texas 75231
(214) 696-1644
The Date of this Offer to Exchange and Consent Solicitation is August 30, 1996.
L:\LEGAL\MDC\CMEXUSA\FORMS-4.003
52
<PAGE>
EXHIBIT T3E-2
CONSENT AND LETTER OF TRANSMITTAL
To Tender and Furnish Consents in
respect of:
12% Series A Subordinated Notes due 2003
12% Series B Subordinated Notes due 2003
12% Series C Subordinated Notes due 2003
Outstanding Warrants to Purchase Common Stock
of
Cinemark Mexico (USA), Inc.
Pursuant to the Offer to Exchange
and
Solicitation of Consents to Amendment of the Related Indenture
The Exchange Offer and Consent Solicitation will expire at 5:00 p.m., New
York City time, on September 27, 1996 (the "Initial Expiration Date"), unless
extended (such date, as extended, the "Expiration Date"). The Company intends to
execute a Third Supplemental Indenture (the "Third Supplemental Indenture")
containing the proposed amendments (as defined herein) as soon as the requisite
consents (as defined herein) have been obtained.
================================================================================
The Exchange Agent for the Exchange Offer and the Consent Solicitation is:
United States Trust Company of Texas, N.A.
Facsimile Transmission Number:
(214) 754-1303
Confirm by Telephone:
(214) 754-1255
By Mail, Overnight Delivery and by
Hand:
United States Trust Company of Texas, N.A.
Attn: Corporate Trust
2001 Ross Avenue, Suite 2700
Dallas, Texas 75201-2936
Delivery of this instrument to an address other than as set forth above
for the Exchange Agent or transmission of instructions via a facsimile
number other than one listed above will not constitute a valid delivery.
The instructions set forth in this Consent and Letter of Transmittal
should be read carefully before this Consent and Letter of Transmittal is
completed.
53
<PAGE>
The undersigned acknowledges that he has received and reviewed the Offer
to Exchange and Consent Solicitation dated August 30, 1996 (the "Offer to
Exchange") of Cinemark USA, Inc. (the "Company"), and this Consent and Letter of
Transmittal, in connection with (a) the Company's offer (the "Exchange Offer")
to exchange (i) with respect to each $1,000 principal amount of its 12% Series A
Senior Subordinated Notes due 2003 (the "Existing Series A Notes") outstanding
in the aggregate principal amount of $400,000, $1,000 principal amount of its
12% Series A Senior Subordinated PIK Notes due 2003 (the "New Series A Notes")
proposed to be outstanding in an aggregate original principal amount of
$400,000, (ii) with respect to each $1,000 original principal amount of its 12%
Series B Senior Subordinated Notes due 2003 (the "Existing Series B Notes")
outstanding in the aggregate principal amount of $20,000,000, $1,000 original
principal amount of its outstanding 12% Series B Senior Subordinated PIK Notes
due 2003 (the "New Series B Notes") proposed to be outstanding in an aggregate
principal amount of $20,000,000 (iii) with respect to each $1,000 original
principal amount of its 12% Series C Senior Subordinated Notes due 2003 (the
"Existing Series C Notes") outstanding in the aggregate principal amount of
$2,000,000, $1,000 original principal amount of its 12% Series C Senior
Subordinated PIK Notes due 2003 (the "New Series C Notes") proposed to be
outstanding in an aggregate principal amount of $2,000,000 and (iv) with respect
to each issued and outstanding warrant to purchase one share of the common stock
of the Company (the "Existing Warrants"), $3.757 original principal amount of
its 12% Series D Senior Subordinated PIK Notes due 2003 (the "New Series D
Notes") proposed to be outstanding in an aggregate principal amount of
$1,424,177 and (b) the Company's solicitation (the "Consent Solicitation") of
consents (the "Consents") to the adoption of certain proposed amendments (the
"Proposed Amendments"), as described in the Offer to Exchange, to the Indenture,
dated as of June 30, 1993, between the Company and United States Trust Company
of New York, N.A., as trustee (the "Trustee"), pursuant to which the Existing
Notes were issued (the "Indenture"). The Existing Series A Notes, the Existing
Series B Notes and the Existing Series C Notes are collectively referred to as
the "Existing Notes", and the Existing Notes and the Existing Warrants are
collectively referred to herein as the "Existing Securities." The New Series A
Notes, the New Series B Notes, the New Series C Notes and the New Series D Notes
are collectively referred to herein as the "New Securities." The Exchange Offer
is being made only to the registered holders of all outstanding Existing
Securities (the " Registered Holders"). The New Securities will be guaranteed on
a senior subordinated basis by Cinemark de Mexico, S.A. de C.V. ("Cinemark de
Mexico"), a Mexican corporation directly owned by the Company. Capitalized terms
used herein and not defined have the meaning assigned to such terms in the Offer
to Exchange. Registered Holders may not tender into the Exchange Offer without
delivering a Consent or deliver a valid Consent without tendering into the
Exchange Offer.
The Consent and Letter of Transmittal must be used to tender Existing
Securities. Registered Holders who wish to tender Existing Securities into the
Exchange Offer must check the Box marked "A" in the Consent and Letter of
Transmittal.
The Exchange Offer and Consent Solicitation may be extended, terminated or
amended, as provided in the Offer to Exchange. See "Expiration Date; Extension;
Amendments" in the Offer to Exchange. During any such extension of the Exchange
Offer and the Consent Solicitation, all Existing Securities previously tendered
and Consents delivered and not withdrawn or revoked pursuant to the Exchange
Offer that have not been accepted for purchase will remain subject to purchase
by the Company.
PLEASE READ THE OFFER TO PURCHASE AND THIS ENTIRE CONSENT AND
LETTER OF TRANSMITTAL CAREFULLY BEFORE CHECKING ANY BOX BELOW
This Consent and Letter of Transmittal is to be completed by Registered
Holders of Existing Securities if certificates representing such Existing
Securities are to be forwarded herewith or if delivery of such certificates is
to be made by book-entry transfer to the account maintained by the Exchange
Agent at The Depository Trust Company (the "Book-Entry Transfer Facility")
pursuant to the procedures set forth in the Offer to Exchange under the caption
"The Exchange Offer and the Consent Solicitation--Procedures for Tendering Notes
and Delivering Consents." Pursuant to the terms of the Exchange Offer and the
Consent Solicitation, the completion, execution and delivery of this Consent and
Letter of Transmittal will be deemed to constitute the delivery of a Consent in
respect of the Existing Notes tendered pursuant to the Exchange Offer.
Registered Holders who tender Existing Notes in the Exchange Offer are obligated
to deliver Consents.
54
<PAGE>
Registered Holders whose certificates representing the Existing Securities
are not immediately available or who cannot deliver certificates and all other
required documents to the Exchange Agent or complete the procedure for
book-entry transfer prior to 5:00 p.m., New York City time, on the Expiration
Date, may nevertheless tender Existing Securities pursuant to the guaranteed
delivery procedure set forth in the Offer to Exchange under the caption "The
Exchange Offer and the Consent Solicitation--Procedures for Tendering Notes and
Delivering Consents--Guaranteed Delivery Procedures." See Instruction 2 below.
Delivery of documents to the Book-Entry Transfer Facility does not constitute
delivery to the Exchange Agent. In order for a tendering holder to be assured of
participating in the Exchange Offer and the Consent Solicitation, such holder
must tender Existing Securities prior to 5:00 p.m., New York City time, on or
before the Expiration Date to receive the New Securities Consideration and the
Consent Payment.
List below your Existing Securities that are to be tendered in the
Exchange Offer and in respect of which Consents, if applicable, are to be
delivered pursuant to this Consent and Letter of Transmittal. If the space below
is inadequate, list the information requested below on a separate signed
schedule and affix the list to this Consent and Letter of Transmittal.
REGISTERED HOLDERS WHO WISH TO TENDER EXISTING SECURITIES INTO THE
EXCHANGE OFFER MUST CHECK THE BOX MARKED "A" IN THE CONSENT AND LETTER OF
TRANSMITTAL. IF A REGISTERED HOLDER TENDERS INTO THE EXCHANGE OFFER AND THE
EXCHANGE OFFER IS NOT CONSUMMATED, SUCH REGISTERED HOLDER WILL NOT RECEIVE THE
NEW SECURITIES.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF SECURITIES TENDERED
<S> <C> <C> <C>
- ------------------------------ ---------------------------- --------------------------- ----------------------------
Aggregate Principal Principal Amount Tendered
Name(s) and Address(es) of Amount or Shares in the Exchange Offer and
Registered Holder(s) (Please Certificate Numbers(s) Represented by as to which Consents are
fill in, if blank) (1) Certificate(s) Delivered (2)
(1)
- ------------------------------ ---------------------------- --------------------------- ----------------------------
---------------------------- --------------------------- ----------------------------
---------------------------- --------------------------- ----------------------------
---------------------------- --------------------------- ----------------------------
---------------------------- --------------------------- ----------------------------
---------------------------- --------------------------- ----------------------------
- ------------------------------ ---------------------------- --------------------------- ----------------------------
<FN>
Total Principal Amount
Tendered
- --------------------------------------------------------------------------------------------------------------------
(1) Need not be completed by Registered Holders who tender by book-entry.
(2) Need not be completed by Registered Holders tendering Existing Warrants. Unless otherwise indicated in this column, any
tendering holder who checks Box A below will be deemed to have tendered, and delivered Consents with respect to, the entire
principal amount represented by the Existing Notes indicated in the column labeled "Aggregate Principal Amount Represented
by Certificate(s)." See Instruction 5.
- --------------------------------------------------------------------------------------------------------------------
</FN>
</TABLE>
A. o CHECK HERE IF EXISTING SECURITIES TENDERED PURSUANT TO THE EXCHANGE
OFFER ARE ENCLOSED HEREWITH.
o CHECK HERE IF EXISTING SECURITIES TENDERED IN THE REPURCHASE
OFFER ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO AN
ACCOUNT
55
<PAGE>
MAINTAINED BY THE EXCHANGE AGENT WITH THE BOOK-ENTRY TRANSFER
FACILITY AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN THE
BOOK- ENTRY TRANSFER FACILITY MAY DELIVER EXISTING SECURITIES BY
BOOK-ENTRY TRANSFER):
Name of Tendering Institution....................................
Participant Number...............................................
Transaction Code Number..........................................
o CHECK HERE IF CONSENTS ARE GIVEN AND TENDERED EXISTING NOTES ARE
BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY AND
CONSENT PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE
FOLLOWING:
Name(s) of Registered Holder(s)..................................
Window Ticket Number (if any)....................................
Date of Execution of Notice of Guaranteed Delivery and Consent...
Name of Eligible Institution that Guaranteed Delivery............
Transaction Code Number..........................................
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Only Registered Holders are entitled to tender their Existing Securities
in the Exchange Offer and to deliver Consents in the Consent Solicitation. Any
financial institution that is a participant in the Book-Entry Transfer Facility
system and whose name appears on a security position listing as the record owner
of the Existing Securities and who wishes to make book-entry delivery of
Existing Securities as described above and to deliver Consents must complete and
execute a participant's letter (which will be distributed to participants by the
Book- Entry Transfer Facility), instructing the Book-Entry Transfer Facility's
nominee to complete and sign the proxy attached thereto, and any other
documentation required in order to make such tender and effectuate such
Consents. Persons who are beneficial owners of Existing Securities but are not
Registered Holders and who seek to tender Existing Securities and deliver
Consents should (i) contact the Registered Holder of such Existing Securities
and instruct such Registered Holder to tender and consent on his behalf, (ii)
obtain and include with this Consent and Letter of Transmittal Existing
Securities properly endorsed for transfer by the Registered Holder or
accompanied by a properly completed bond power from the Registered Holder,
together with a properly completed irrevocable proxy that authorizes such person
to deliver a Consent on behalf of such Registered Holder, with signatures on the
endorsement or bond power in form satisfactory to the Company guaranteed by a
firm that is a member of a registered national securities exchange, a member of
the National Association of Securities Dealers, Inc. or a commercial bank or
trust company having an office in the United States or any other "Eligible
Guarantor Institution" as such term is defined in Rule 17Ad-15 under the
Exchange Act (each an "Eligible Institution") or (iii) effect a record transfer
of such Existing Securities from the Registered Holder to such beneficial owner
and comply with the requirements applicable to Registered Holders for tendering
Existing Securities and delivering Consents.
A REGISTERED HOLDER WHO TENDERS EXISTING NOTES PURSUANT TO THE EXCHANGE
OFFER WILL, BY ACCEPTANCE OF THE EXCHANGE OFFER, DELIVER THE RELATED CONSENTS.
See "The Repurchase Offer and The Consent Solicitation--Procedures for Tendering
and Delivering Consents" in the Offer to Exchange.
56
<PAGE>
To: Cinemark Mexico (USA), Inc.
Upon the terms and subject to the conditions of the Exchange Offer and the
Consent Solicitation, the undersigned hereby tenders the Existing Securities
indicated above to the Company, or its assignee pursuant to the Exchange Offer
if Box A above is checked, and delivers Consents to the Proposed Amendments in
respect of such Existing Securities, if applicable. The undersigned understands
that there is no assurance that the Exchange Offer will be consummated or, if
consummated, that the Company will determine to consummate the Exchange Offer on
September 27, 1996. The undersigned understands that although the Initial
Expiration Date currently is scheduled to occur on September 27, 1996, the
Company reserves the right, in its sole discretion, to extend or amend the
Expiration Date or terminate the Exchange Offer for any reason.
Subject to, and effective upon, acceptance for exchange of the Existing
Securities tendered herewith for New Securities, by executing this Consent and
Letter of Transmittal the undersigned hereby irrevocably sells, assigns and
transfers to or upon the order of the Company or its assignee all right, title
and interest in and to all such Existing Securities tendered hereby, waives any
and all rights with respect to the Existing Securities tendered hereby
(including, without limitation, the undersigned's waiver of any existing or past
defaults and their consequences with respect to the Existing Securities) and
releases and discharges any obligor or parent of any obligor of the Existing
Securities from any and all claims the undersigned may have now, or may have in
the future, arising out of or related to the Existing Securities, including,
without limitation, any claims that the undersigned is entitled to receive
additional principal or interest payments with respect to the Existing
Securities. The undersigned hereby irrevocably constitutes and appoints the
Exchange Agent the true and lawful agent and attorney-in-fact of the undersigned
with respect to such Existing Securities, with full power of substitution and
resubstitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest) to (a) deliver certificates representing such Existing
Securities, or transfer ownership of such Existing Securities on the account
books maintained by the Book-Entry Transfer Facility, together, in each such
case, with all accompanying evidences of transfer and authenticity, to or upon
the order of the Company, (b) present such Existing Securities for transfer on
the relevant security register and (c) receive all benefits or otherwise
exercise all rights of beneficial ownership of such Existing Securities, all in
accordance with the terms of the Repurchase Offer and the Consent Solicitation.
EXECUTION AND DELIVERY OF THIS CONSENT AND LETTER OF TRANSMITTAL WILL ALSO
CONSTITUTE THE DELIVERY OF THE CONSENTS IN RESPECT OF EXISTING NOTES TENDERED
HEREBY PURSUANT TO THE EXCHANGE OFFER AND THE CONSENT SOLICITATION.
The undersigned agrees and acknowledges that, by the execution and
delivery hereof, the undersigned makes and provides the written Consent, with
respect to the Existing Notes tendered hereby pursuant to the Exchange Offer, to
the Proposed Amendments as permitted by applicable provisions of the Indenture.
The undersigned understands that the Consent provided hereby shall remain in
full force and effect until such Consent is revoked in accordance with the
procedures set forth in the Offer to Exchange and this Consent and Letter of
Transmittal. The undersigned understands that a revocation of such Consent will
not be effective following 5:00 p.m., New York City time, on the date on which a
supplemental indenture containing the Proposed Amendments (the "Supplemental
Indenture") is executed (the "Execution Date"). The Company intends to cause the
Supplemental Indenture to become effective immediately prior to the consummation
of the Exchange Offer. See "Proposed Amendments to the Indenture" in the Offer
to Exchange.
The undersigned understands that (i) Existing Securities tendered in the
Exchange Offer may be withdrawn at any time prior to 5:00 p.m., New York City
time, on the Initial Expiration Date, (ii) Existing Securities may not be
withdrawn at any time after the Initial Expiration Date or the Exchange Offer
and the Consent Solicitation are terminated or expire without consummation
thereof and (iii) Consents relating to Existing Notes that have been tendered
may be revoked prior to the Execution Date only if such Existing Notes are
withdrawn prior to the Execution Date.
The tender of Existing Securities by the undersigned pursuant to this
Consent and Letter of Transmittal will constitute a binding agreement between
the undersigned and the Company upon the terms and subject to the conditions of
the Exchange Offer and the Consent Solicitation. The undersigned hereby
57
<PAGE>
represents and warrants that (i) the undersigned has full power and authority to
tender, sell, assign and transfer the Existing Securities tendered hereby and
that, when the same are accepted for exchange by the Company or its assignee,
the Company or its assignee will acquire good, marketable and unencumbered title
thereto, free and clear of all security interests, liens, restrictions, claims,
charges, encumbrances, conditional sales agreements or other obligations
relating to the sale or transfer thereof, and will not be subject to any adverse
claim, (ii) the undersigned owns the Existing Securities being tendered hereby
and is entitled to tender such Existing Securities as contemplated by the
Exchange Offer, all within the meaning of Rule 14e-4 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and (iii) the tender of
such Existing Securities complies with Rule 14e-4. The undersigned will, upon
request, execute and deliver any additional documents deemed by the Exchange
Agent, the Depository Trust Company or the Company, or its assignee, to be
necessary or desirable to complete the assignment, transfer and purchase of the
Notes tendered hereby pursuant to the Exchange Offer and this delivery of the
Consents in respect of such Notes. The undersigned has read and agrees to all of
the terms and conditions of the Exchange Offer and the Consent Solicitation. If
Box A above is checked, delivery of the enclosed Existing Securities shall be
effected, and risk of loss and title to such Existing Securities shall pass,
only upon proper delivery thereof to the Exchange Agent.
All authority conferred or agreed to be conferred pursuant to this Consent
and Letter of Transmittal and every obligation of the undersigned hereunder
shall be binding upon the successors, assigns, heirs, executors, administrators,
trustees in bankruptcy, and personal and legal representatives of the
undersigned and shall not be affected by, and shall survive, the death or
incapacity of the undersigned.
The Exchange Offer and the Consent Solicitation are subject to a number of
conditions, each of which may be waived or modified by the Company, in whole or
in part, at any time and from time to time, as described in the Offer to
Exchange under the caption "The Exchange Offer and the Consent
Solicitation--Conditions." The undersigned recognizes that as a result of such
conditions the Company may not be required to accept the Existing Securities
properly tendered in the Exchange Offer hereby. Subject to compliance with
securities laws, the Company also expressly reserves the right, in its sole
discretion, to (i) extend or terminate the Exchange Offer or the Consent
Solicitation and (ii) to amend the Exchange Offer or the Consent Solicitation in
any respect and at any time or from time to time until the Existing Securities
are accepted for purchase and payment. The Company may terminate the Exchange
Offer and the Consent Solicitation, in its sole discretion, regardless of
whether any of the events set forth in the Offer to Exchange under "The Exchange
Offer and the Consent Solicitation--Conditions" shall have occurred or shall
have been determined by the Company to have occurred. In any such event, the
tendered Existing Securities not accepted for purchase and payment will be
returned to the undersigned without cost to the undersigned as soon as
practicable following the date on which the Exchange Offer and the Consent
Solicitation are terminated or expire without any Existing Securities being
purchased thereunder, at the address shown below the undersigned's signature(s).
Unless otherwise indicated under "Special Delivery Instructions," please
return any certificates representing Existing Securities not tendered or not
accepted for exchange (and accompanying documents, as appropriate) and/or send
certificates representing the New Securities to the address(es) of the
Registered Holder(s) appearing under "Description of Securities Tendered."
58
<PAGE>
SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 1, 6, and 7)
To be completed ONLY if the certificates representing the New Securities
and/or certificates representing Existing Securities not accepted for exchange
are to be issued in the name of someone other than the undersigned or if
Existing Securities delivered by book-entry transfer not accepted for exchange
are to be returned by credit to a participant number maintained at the
Book-Entry Transfer Facility other than the participant number indicated above.
Issue Certificate(s) to
Name:
(Please Print)
Address:
(Include Zip Code)
(COMPLETE FORM W-9)
(Taxpayer Identification or Social Security Number)
o Credit unpurchased Notes delivered by book-
entry transfer to the Book-Entry Transfer
Facility participant number set forth below:
(check one)
(Participant Number)
59
<PAGE>
REGISTERED HOLDERS OF EXISTING SECURITIES
SIGN HERE
(To Be Completed By All Tendering Holders of Notes Regardless
of Whether Existing Securities Are Being Physically Delivered)
THE COMPLETION, EXECUTION AND DELIVERY OF THIS CONSENT AND LETTER OF TRANSMITTAL
WILL CONSTITUTE THE DELIVERY OF CONSENTS IN RESPECT OF EXISTING SECURITIES
TENDERED HEREBY PURSUANT TO THE REPURCHASE OFFER.
<TABLE>
<S> <C> <C>
Signature of Registered Holder of Notes Signature of Holder (if more than one)
Signature of Holder (if more than one)
</TABLE>
Dated: , 1996
(Must be signed by the Registered Holder(s) exactly as name(s) appear(s) on
certificate(s) representing the Existing Securities or on a security position
listing or by person(s) to become Registered Holder(s) by certificates and
documents transmitted herewith. If signature is by attorney-in-fact, executor,
administrator, trustee, guardian, officer of a corporation or other person
acting in a fiduciary or representative capacity, please provide the following
information and see Instruction 6.)
Capacity (Full Title)
Name(s)
(Please Type or Print)
Address
Area Code and Telephone Number
Tax Identification or Social Security No.
Wire Transfer Instructions
IMPORTANT: COMPLETE AND SIGN THE SUBSTITUTE FORM W-9 IN
THIS CONSENT AND LETTER OF TRANSMITTAL
60
<PAGE>
GUARANTEE OF SIGNATURE(S)
(If required -- see Instructions 1 and 6)
Authorized Signature
Name
(Please Type or Print)
Title
Name of Firm
Address
(Include Zip Code)
Area Code and Telephone Number
Dated:
61
<PAGE>
INSTRUCTIONS
Forming Part of the Terms and Conditions of the Exchange Offer and the Consent
Solicitation
1. Guarantee of Signatures. Signatures on this Consent and Letter of
Transmittal need not be guaranteed if the Existing Securities tendered hereby
are tendered (a) by the Registered Holder(s) thereof, unless such holder has
completed the box entitled "Special Delivery Instructions" above, or (b) for the
account of a firm or offer entity identified in Rule 17Ad under the Exchange Act
that is a member of a registered national securities exchange, a member of the
National Association of Securities Dealers, Inc. or a commercial bank or trust
company having an office in the United States or any other Eligible Institution.
In all other cases, all signatures on this Consent and Letter of Transmittal
must be guaranteed by an Eligible Institution. Persons who are beneficial owners
of Existing Securities but are not Registered Holders and who seek to tender
Existing Securities and deliver Consents should (i) contact the Registered
Holder of such Existing Securities and instruct such Registered Holder to tender
and consent on his behalf pursuant to the Exchange Offer, (ii) obtain and
include with this Consent and Letter of Transmittal, Existing Securities
properly endorsed for transfer by the Registered Holder or accompanied by a
properly completed bond power from the Registered Holder, in form satisfactory
to the Company, together with a properly completed irrevocable proxy that
authorizes such person to deliver the Consents on behalf of such Registered
Holder with signatures on the endorsement or bond power guaranteed by an
Eligible Institution, or (iii) effect a record transfer of such Existing
Securities from the Registered Holder to such beneficial owner and comply with
the requirements applicable to Registered Holders for tendering Existing
Securities and delivering Consents. See Instruction 6.
2. Requirements of Tender and Consent. This Consent and Letter of
Transmittal is to be completed by Registered Holders either if certificates are
to be forwarded herewith or if delivery of Existing Securities is to be made
pursuant to the procedures for book-entry transfer set forth in the Offer to
Exchange under the caption "Procedures for Tendering and Delivering Consents."
For a Registered Holder to properly tender Existing Securities and deliver
Consents pursuant to the Exchange Offer and the Consent Solicitation, a properly
completed and duly executed Consent and Letter of Transmittal (or a facsimile
thereof), together with any signature guarantees and any other documents
required by these Instructions, must be received by the Exchange Agent at the
address set forth herein prior to 5:00 p.m., New York City time, on the
Expiration Date (to receive the New Securities), and either (i) certificates
representing such Notes must be received by the Depositary at such address or
(ii) such Existing Securities must be transferred pursuant to the procedures for
book-entry transfer described in the Offer to Exchange under the caption "The
Exchange Offer and the Consent Solicitation--Procedures for Tendering and
Delivering Consents" and a Book-Entry Confirmation must be received by the
Exchange Agent, in each case prior to 5:00 p.m., New York City time, on the
Expiration Date (to receive the New Securities). A Registered Holder who desires
to tender Existing Securities and deliver Consents and who cannot comply with
procedures set forth herein for tender on a timely basis or whose Existing
Securities are not immediately available must comply with the guaranteed
delivery procedures described below.
In all cases, notwithstanding any other provision hereof, the exchange of
New Securities for Existing Securities tendered and accepted for exchange
pursuant to the Exchange Offer will be made only after timely receipt by the
Exchange Agent of (i) certificates representing such Existing Securities in
proper form for transfer or a Book-Entry Confirmation with respect to such
Existing Securities and any other required documentation, (ii) this Consent and
Letter of Transmittal properly completed and duly executed, including a valid
and unrevoked Consent (or a facsimile thereof), (iii) any required signature
guarantees and (iv) other documents required by this Consent and Letter of
Transmittal. Accordingly, tendering holders may be paid at different times
depending upon when certificates for Existing Securities or Book-Entry
Confirmations are actually received by the Exchange Agent.
Registered Holders whose certificates representing Existing Securities are
not immediately available or who cannot deliver their certificates and all other
required documents to the Exchange Agent or complete the procedures for
book-entry transfer prior to the Expiration Date, may tender their Existing
Securities and deliver Consents by properly completing and duly executing the
Notice of Guaranteed Delivery pursuant to the
62
<PAGE>
guaranteed delivery procedure set forth in the Offer to Exchange under the
caption "The Exchange Offer and the Consent Solicitation-- Procedures for
Tendering and Delivering Consents." Pursuant to such procedures, (a) the tender
must be made by or through an Eligible Institution; (b) a Notice of Guaranteed
Delivery, substantially in the form provided by the Company herewith, properly
completed and duly executed, must be received by the Exchange Agent as provided
below prior to 5:00 p.m., New York City time, on the Expiration Date, and (c)
the certificates representing all tendered Existing Securities, or a Book-Entry
Confirmation with respect to all tendered Existing Securities, together with
this Consent and Letter of Transmittal, properly completed and duly executed,
and any required signature guarantees, or Agent's Message, and all other
documents required by the Consent and Letter of Transmittal, are received by the
Exchange Agent within three New York Stock Exchange trading days after the date
of execution of the Notice of Guaranteed Delivery.
The method of delivery of certificates representing Existing Securities,
this Consent and Letter of Transmittal, any required signature guarantees and
any other required documents, including delivery through the Book-Entry Transfer
Facility, is at the option and risk of the tendering holder and delivery will be
deemed made only when actually received by the Exchange Agent. If delivery is by
mail, registered mail with return receipt requested, properly insured, is
recommended and the mailing should be sufficiently in advance of the Expiration
Date to ensure timely delivery.
All tendering Registered Holders, by execution of this Consent and Letter
of Transmittal, waive any right to receive any notice of the acceptance of their
Existing Securities for purchase.
3. The Consents. A valid Consent may be given only by the Registered Holder
or by his attorney-in-fact. A beneficial owner who is not a Registered Holder
must arrange with the Registered Holder to execute and deliver a Consent on his
or her behalf, obtain a properly completed irrevocable proxy that authorizes
such beneficial owner to deliver the Consents on behalf of such Registered
Holder or become a Registered Holder. Any financial institution that is a
participant in a Book-Entry Transfer Facility's system and whose name appears on
a security position listing as the record owner of the Existing Securities who
wishes to make book-entry delivery of the Existing Securities as described above
and who wishes to deliver the Consents must complete and execute a participant's
letter (which will be distributed to participants by the Book-Entry Transfer
Facility) instructing the Book-Entry Transfer Facility's nominee to complete and
sign the proxy attached thereto, and execute any other documentation required in
order to effectuate such Consents.
4. Withdrawal of Tenders and Revocation of Consents. Existing Securities
tendered in the Exchange Offer may be withdrawn at any time prior to 5:00 p.m.,
New York City time, on the Initial Expiration Date. Existing Securities may not
be withdrawn at any time after the Initial Expiration Date. In such a situation,
previously tendered Existing Securities may be validly withdrawn until the
expiration of ten business days after the date that notice of any such increase
or decrease is first published, given or sent to Holders by the Company. In
addition, tenders of Existing Securities may be validly withdrawn if the
Exchange Offer is terminated without any Existing Securities being purchased
thereunder. In the event of a termination of the Exchange Offer, the Existing
Securities tendered pursuant to the Exchange Offer will be promptly returned to
the tendering Holder. Consents relating to Existing Securities that have been
tendered may be revoked prior to the Execution Date only if such Existing
Securities are validly withdrawn prior to the Execution Date.
The term "Initial Expiration Date" shall mean 5:00 p.m., New York City
time, on September 27, 1996 unless the Company shall have extended at its sole
discretion the time the Exchange Offer and the Consent Solicitation is open. The
term "Expiration Date" shall mean the Initial Expiration Date if not extended or
the time and date on which the Exchange Offer and the Consent Solicitation, as
extended, shall expire.
Any Registered Holder of Existing Securities who has tendered Existing
Securities pursuant to the Exchange Offer and delivered the related Consents or
who succeeds to the record ownership of Existing Securities in respect of which
such tenders or Consents have previously been given may (i) withdraw such
Existing Securities prior to 5:00 p.m., New York City time, on the Initial
Expiration Date. To be effective, a Registered Holder of Existing Securities
held in physical form must provide a written or facsimile transmission notice of
63
<PAGE>
withdrawal of a tender and, if the Existing Securities were tendered in the
Exchange Offer, notice of revocation of a Consent with respect to the Existing
Securities to the Exchange Agent, at the address specified on the back cover of
this Consent and Letter of Transmittal, prior to 5:00 p.m., New York City time
on the Initial Expiration Date, which notice must contain (i) the name of the
Registered Holder of the Existing Securities to be withdrawn and to which the
notice of revocation relates, (ii) a description of the Existing Securities to
be withdrawn and to which the notice of revocation relates, (iii) the
certificate numbers shown on the particular certificates representing such
Existing Securities, (iv) the aggregate principal amount represented by such
Existing Securities, (v) the signature of such Registered Holder of the Existing
Securities executed in the same manner as the original signature on the Consent
and Letter of Transmittal (including any signature guarantee (if such original
signature was guaranteed)); (vi) if such Existing Securities are held by a new
beneficial owner, evidence satisfactory to the Company that the person
withdrawing the tender has succeeded to the beneficial ownership of the Existing
Securities; and (vii) if such Existing Securities were tendered by book-entry
transfer, the Registered Holder's, Book-Entry Transfer Facility participation
number. For a withdrawal to be effective, a Registered Holder of Existing
Securities held with a Book-Entry Transfer Facility must (i) call such
Registered Holder's broker and instruct such broker to withdraw such tender of
Existing Securities by debiting the Exchange Agent's account at the Book-Entry
Transfer Facility of all Existing Securities to be withdrawn; and (ii) instruct
such broker to provide a written telegraphic or facsimile transmission notice of
withdrawal to the Exchange Agent prior to 5:00 p.m., New York City time, on the
Initial Expiration Date. Such notice of withdrawal shall contain (i) the name of
the person who tendered the Existing Securities; (ii) a description of the
Existing Securities to be withdrawn; (iii) the aggregate principal amount
represented by such Existing Securities; and (iv) if such Existing Securities
are held by a new beneficial owner, evidence satisfactory to the Company that
the person withdrawing the tender has succeeded to the beneficial ownership of
the Existing Securities. A purported notice of withdrawal which lacks any of the
required information will not be an effective withdrawal of a tender previously
made. If the Existing Securities to be withdrawn have been delivered or
otherwise identified to the Exchange Agent, a signed notice of withdrawal is
effective immediately upon receipt by the Exchange Agent of written or facsimile
transmission of the notice of withdrawal even if physical release is not yet
effected.
A Consent cannot be revoked without a concurrent valid withdrawal of
Existing Securities. The Company or its assignee will have the right, which may
be waived, to reject a defective tender of Existing Securities as invalid and
ineffective. If the Company, or its assignee, waives its right to reject a
defective tender of Existing Securities, the Registered Holder will be entitled
to receive New Securities if such Existing Securities were delivered prior to
5:00 p.m., New York City time, on the Expiration Date. Any Existing Securities
that have been tendered pursuant to the Exchange Offer but that are not
purchased thereby, will be returned to the Registered Holder thereof without
cost to such Registered Holder as soon as practicable following the Expiration
Date.
If the Company is delayed in its acceptance for exchange for any Existing
Securities (whether before or after the Company's acceptance for payment of such
Existing Securities), or the Company extends the Exchange Offer or is unable to
accept for payment or pay for Existing Securities pursuant to the Exchange Offer
for any reason then, without prejudice to the Company's rights hereunder,
tendered Notes may be retained by the Exchange Agent on behalf of the Company
and may not be withdrawn except to the extent that tendering holders of such
Existing Securities are entitled to withdrawal rights as set forth herein,
subject to Rule 14e-1(c) under the Exchange Act, which provides that no person
who makes a tender offer shall fail to pay the consideration offered or return
the securities deposited by or on behalf of security holders promptly after the
termination or withdrawal of a tender offer.
A valid withdrawal of a tender of Existing Securities tendered pursuant to
the Exchange Offer and a related revocation of a Consent may not be rescinded
and any Existing Securities properly withdrawn and Consents properly revoked
will not be deemed to be validly tendered for purposes of the Exchange Offer and
the Consent Solicitation. However, Existing Securities withdrawn from the
Exchange Offer may be re-tendered and Consents may be redelivered by repeating
one of the procedures described in Instruction 2 above at any time prior to 5:00
p.m., New York City time, on the Expiration Date to receive the New Securities.
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<PAGE>
The proper withdrawal of Existing Securities tendered pursuant to the
Exchange Offer will be deemed to be a revocation of the Consents to which such
tendered Existing Securities relate and any Registered Holder who properly
withdraws Existing Securities tendered pursuant to the Exchange Offer and does
not properly re-tender such Notes pursuant to the Exchange Offer prior to 5:00
p.m., New York City time, on the Expiration Date will not receive the New
Securities.
All questions as to the validity (including time of receipt) of notices of
withdrawal will be determined by the Company, in its sole discretion, whose
determination will be final and binding. None of the Company, the Exchange
Agent, the Trustee, or any other person is under any duty to give notification
of any defects or irregularities in any notice of withdrawal or incur any
liability for failure to give any such notification.
5. Partial Tenders Not Permitted. The entire principal amount represented
by the certificates for all Existing Securities must be delivered to the
Exchange Agent to be deemed to have been validly tendered in the Exchange Offer
and Consents delivered in respect thereto, unless otherwise indicated.
6. Signatures on This Consent and Letter of Transmittal; Bond Powers and
Endorsements. If this Consent and Letter of Transmittal is signed by the
Registered Holder(s) of the Exchange Securities tendered hereby, the
signature(s) must correspond exactly with the name(s) as written on the face of
the certificate(s) without alteration, enlargement or any change whatsoever.
If any of the Exchange Securities tendered hereby are owned of record by
two or more joint owners, all such owners must sign this Consent and Letter of
Transmittal. If any tendered Exchange Securities are registered in different
names on several certificates, it will be necessary to complete, sign and submit
as many separate Consents and Letters of Transmittal as there are names in which
certificates are held.
If this Consent and Letter of Transmittal or any certificates or bond
powers are signed by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in a fiduciary or
representative capacity, such persons should so indicate when signing, and
proper evidence satisfactory to the Company or its assignee of their authority
so to act must be submitted, unless waived by the Company or its assignee.
If this Consent and Letter of Transmittal is signed by the Registered
Holder(s) of the Notes listed and transmitted hereby, no endorsements of
certificates or separate bond powers are required unless payment is to be made
to, or certificates for Existing Securities not tendered or not accepted for
purchase are to be issued to, a person other than the Registered Holder(s).
Signatures on such certificates must be guaranteed by an Eligible Institution
(unless signed by an Eligible Institution).
If this Consent and Letter of Transmittal is signed by a person other than
the Registered Holder(s) of the Existing Securities listed, the certificates
representing such Existing Securities must be properly endorsed for transfer by
the Registered Holder or be accompanied by a properly completed bond power from
the Registered Holder in form satisfactory to the Company, together with a
properly completed irrevocable proxy that authorizes such person to consent to
the Proposed Amendments on behalf of such Registered Holder, if such Existing
Securities are being tendered into the Exchange Offer, with signatures on the
endorsement or bond power guaranteed by an Eligible Institution.
7. Special Delivery Instructions. If certificates for the New Securities
are to be returned to a person other than the person(s) signing this Consent and
Letter of Transmittal or to an address other than that shown above, the
appropriate boxes on this Consent and Letter of Transmittal entitled "Special
Delivery Instructions" should be completed. Holders of Existing Securities
delivering Existing Securities by book-entry transfer may request that Existing
Securities not accepted for payment be credited to such account maintained at
the Book-Entry Transfer Facility as such Registered Holder(s) may designate
hereon. If no such instructions are given, such Existing Securities not accepted
for payment will be returned by crediting the account at the Book-Entry Transfer
Facility.
65
<PAGE>
8. Waiver of Conditions to the Exchange Offer or the Consent Solicitation.
To the extent permitted by applicable law, the Company reserves the right to
waive any and all conditions to the Exchange Offer or the Consent Solicitation
described in the Offer to Exchange under "Conditions " in the case of any
Existing Securities tendered or Consents delivered, in whole or in part from
time to time.
9. Mutilated, Lost, Stolen or Destroyed Notes. Any holder of Existing
Securities whose Notes have been mutilated, lost, stolen or destroyed should
contact the Trustee or the Exchange Agent at the addresses indicated above for
further instructions.
10. Requests for Assistance or Additional Copies. Requests for assistance
may be directed to the Exchange Agent or the Company at the address set forth
below or from the tendering Registered Holder's broker, dealer, commercial bank
or trust company. Additional copies of the Offer to Exchange, this Consent and
Letter of Transmittal and the Notice of Guaranteed Delivery may be obtained from
the Exchange Agent or the Company.
11. Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance of tendered Existing
Securities and delivered Consents will be resolved by the Company, in its sole
discretion, whose determination will be final and binding. The Company reserves
the absolute right to reject any or all tenders that are not in proper form or
the acceptance of which may, in the opinion of counsel for the Company, be
unlawful. Conditional, irregular or contingent tenders or Consents will be
considered defective. The Company also reserves the absolute right to waive the
conditions of the Exchange Offer and the Consent Solicitation as set forth in
the Offer to Exchange under "Conditions" and any irregularities or conditions of
tender as to particular Existing Securities or Consents. The Company's
interpretation of the terms and conditions of the Exchange Offer and the Consent
Solicitation (including the instructions in this Consent and Letter of
Transmittal) will be, in its sole discretion, final and binding. Unless waived,
any irregularities in connection with tenders of Existing Securities or
deliveries of Consents must be cured within such time as the Company shall
determine. The Company and Exchange Agent shall not be under any duty to give
notification of defects in such tenders and shall not incur liabilities for
failure to give such notification. Tenders of Existing Securities or Consents
will not be deemed to have been made until such irregularities have been cured
or waived by the Company. Any Existing Securities received by the Exchange Agent
that are not properly tendered and as to which the irregularities have not been
cured or waived by the Company will be returned by the Exchange Agent to the
tendering holder, unless otherwise provided in the Consent and Letter of
Transmittal, as soon as practicable following the Expiration Date or termination
of the Exchange Offer.
12. Inadequate Space. If the space provided herein is inadequate, the
aggregate principal amount of the Existing Notes or the aggregate outstanding
shares to be purchased under Existing Warrants being tendered and the security
numbers (if available) should be listed on a separate schedule.
66
<PAGE>
The Exchange Agent for the Exchange Offer and the Consent Solicitation is:
United States Trust Company of Texas, N.A.
Facsimile Transmission Number:
(214) 754-1303
Confirm by Telephone:
(214) 754-1255
----------------------------
By Mail, By Overnight Delivery and
By Hand:
United States Trust Company of Texas, N.A.
Corporate Trust Operations
2001 Ross Avenue, Suite 2700
Dallas, Texas 75201-2936
Attention: Bill Barber
The Company's address is:
Cinemark Mexico (USA), Inc.
7502 Greenville Avenue, Suite 800
Dallas, Texas 75231
(214) 696-1644
L:\LEGAL\MDC\CMEXUSA\LOT.003
67
<PAGE>
EXHIBIT T3E-3
NOTICE OF GUARANTEED DELIVERY
For the Tender of and Delivery of Consents
with Respect to
12% Series A Senior Subordinated Notes Due 2003
12% Series B Senior Subordinated Notes Due 2003
12% Series C Senior Subordinated Notes Due 2003
Warrants to Purchase Shares of Common Stock
Issued by
Cinemark Mexico (USA), Inc.
Securityholders desiring to tender their 12% Series A Senior Subordinated
Notes Due 2003, 12% Series B Senior Subordinated Notes Due 2003, 12% Series C
Senior Subordinated Notes Due 2003 and Warrants to purchase one share of Common
Stock of the Company (the "Existing Securities") issued by Cinemark Mexico
(USA), Inc. (the "Company") pursuant to the Exchange Offer and Consent
Solicitation of the Company dated August 30, 1996 (as the same may be further
amended or supplemented from time to time, the "Exchange Offer"), must use this
form or one substantially equivalent hereto to accept the Exchange Offer (as
defined below) and simultaneously to consent to the proposed amendments to the
indenture governing the Existing Securities if the certificates representing
such Existing Securities are not immediately available or time will not permit
the Existing Securities and all required documents to reach the Exchange Agent
prior to the Initial Expiration Date (as defined below), or if the procedures
for book-entry transfer cannot be completed on a timely basis. This form (or a
substantial equivalent thereof) may be delivered by hand or sent by registered
or certified mail, overnight delivery, facsimile transmission, telegram or telex
to the Exchange Agent and must include a guarantee by an Eligible Institution.
The Exchange Offer and Consent Solicitation will expire at 5:00 p.m., New
York City time, on September 27, 1996 (the "Initial Expiration Date"), unless
extended (such date, as extended, the "Expiration Date"). The Company intends to
execute a Third Supplemental Indenture (the "Third Supplemental Indenture")
containing the Proposed Amendments (as defined herein) immediately upon receipt
of the Requisite Consents (as defined herein).
<TABLE>
<CAPTION>
The Exchange Agent for the Exchange Offer is:
UNITED STATES TRUST COMPANY OF TEXAS, N.A.
<S> <C> <C> <C>
By Registered or Certified Mail: By Facsimile Transmission: By Hand/Overnight Delivery:
(for Eligible Institutions Only):
United States Trust Company (214) 754-1303 United States Trust Company
of Texas, N.A. of Texas, N.A.
2001 Ross Avenue, Suite 2700 2001 Ross Avenue, Suite 2700 Dallas, Texas 75201-2936
Confirmation Telephone: Dallas, Texas 75201-2936
Attention: John Stohlman (214) 754-1200 Attention: John Stohlman
(214) 754-1200
<FN>
(Originals of all documents sent by facsimile should be sent promptly
by registered or certified mail, by land, or by overnight delivery service.)
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OR TRANSMISSION
OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN AS
SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY.
</FN>
</TABLE>
This form is not to be used to guarantee signatures. If a signature on the
Consent and Letter of Transmittal distributed with the Exchange Offer is
required to be guaranteed by an Eligible Institution under the instructions
thereto, such signature guarantee must appear in the applicable space provided
in the signature box on the Consent and Letter of Transmittal.
DO NOT SEND EXISTING SECURITIES WITH THIS FORM. ACTUAL SURRENDER OF EXISTING
SECURITIES MUST BE MADE PURSUANT TO, AND BE ACCOMPANIED BY, A PROPERLY COMPLETED
AND VALIDLY EXECUTED CONSENT AND LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED
DOCUMENTS TO CONSTITUTE A VALID TENDER AND CONSENT.
68
<PAGE>
Ladies and Gentlemen:
The undersigned hereby (a) tenders to the Company the principal amount of
the Existing Securities specified below pursuant to the guaranteed delivery
procedure set forth in "The Exchange Offer and the Consent Solicitations -
Procedures for Tendering Consents Guaranteed Delivery" in the Exchange Offer,
(b) represents that it owns the Existing Securities tendered hereby, and (c)
consents to the Proposed Amendments (as defined in the Exchange Offer), all upon
the terms and subject to the conditions set forth in the Offer to Exchange and
the related Consent and Letter of Transmittal, receipt of which is hereby
acknowledged. The undersigned understands that Holders of Existing Securities
who tender their Existing Securities are obligated to consent to the Proposed
Amendments as described in the Exchange Offer under the caption "Proposed
Amendments to Indenture," and, accordingly, the undersigned hereby consents to
the Proposed Amendments and acknowledges that tendering such Existing Securities
in accordance with the Exchange Offer constitutes a consent with respect to such
Existing Securities.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to give the consent. The undersigned will, upon
request, execute and deliver any additional documents deemed by the Exchange
Agent or the Company to be necessary or desirable for the perfection of the
undersigned's consent to the Proposed Amendments and to the execution of the
supplemental indenture to the indenture pursuant to which the Existing
Securities were issued reflecting such Proposed Amendments.
The undersigned authorizes the Exchange Agent to deliver this Notice of
Guaranteed Delivery to the Company and the Trustee as evidence of the
undersigned consent to the Proposed Amendments and as certification that
requisite consents to the Proposed Amendments executed by Holders of Existing
Securities have been received.
All authority herein conferred or agreed to be conferred by this Notice of
Guaranteed Delivery shall survive the death or incapacity of the undersigned and
every obligation of the undersigned under this Notice of Guaranteed Delivery
shall be binding upon the heirs, personal representatives, executors,
administrators, successors, assigns, trustees in bankruptcy and other legal
representatives of the undersigned.
<TABLE>
<CAPTION>
_______________________________________________________________________________
Name(s) of the Registered Holder(s): __________________________
(Please type or print)
Address: _____________________________________________________________
_____________________________________________________________________
Area Code and Telephone No.: ___________________________________
Principal Amount/Shares
<S> <C> <C>
Security Numbers Tendered
Existing Securities Tendered (if available) (In $1,000 Multiples)
12% Series A Senior Subordinated Notes Due 2003 ________________ $____________________
12% Series B Senior Subordinated Notes Due 2003 ________________ $____________________
12% Series C Senior Subordinated Notes Due 2003 ________________ $____________________
Warrants to Purchase Common Stock ________________ ____________________
</TABLE>
Signature of Holder(s):
Dated:
|_| CHECK HERE IF TENDERED EXISTING SECURITIES ARE BEING DELIVERED BY BOOK-
ENTRY TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH
ONE OF THE BOOK-ENTRY TRANSFER FACILITIES AND COMPLETE THE FOLLOWING:
Name(s) of Tendering Institution:
Check Box of Applicable Book-Entry Transfer Facility:
|_| DTC
Account Number ____________________________________________________________
Transaction Code Number ___________________________________________________
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE GUARANTEE ON THE FOLLOWING PAGE MUST BE COMPLETED.
69
<PAGE>
GUARANTEE
(Not to be used for signature guarantees)
The undersigned, a firm which is a member of a registered national
securities exchange or the National Association of Securities Dealers, Inc., or
a commercial bank or trust company having an office or correspondent in the
United States, or any other "Eligible Guarantor Institution" as defined in Rule
17Ad-15 under the Securities Exchange Act of 1934, as amended, guarantees that
the undersigned will deliver to the Exchange Agent the Existing Securities
tendered hereby in proper form for transfer (or confirmation of book-entry
transfer of such Existing Securities to the Exchange Agent in accordance with
the book-entry transfer procedures set forth in the Exchange Offer), together
with a properly completed and duly executed Consent and Letter of Transmittal
(or facsimile thereof) with any required signature guarantee and any other
required documents, all by 5:00 P.M., New York City time, on or before the
Expiration Date.
The undersigned acknowledges that it must deliver the Consent and Letter of
Transmittal and the Existing Securities tendered hereby to the Exchange Agent
within the time period set forth above.
- --------------------------------------------------------------------------------
Name of Firm: _____________________________________________________________
Address: __________________________________________________________________
---------------------------------------------------------------------------
Area Code and Telephone No.: ______________________________________________
Authorized Signature: _____________________________________________________
Name: _____________________________________________________________________
Title: ____________________________________________________________________
Dated: ____________________________________________________________________
- --------------------------------------------------------------------------------
NOTE: DO NOT SEND CERTIFICATES OR EXISTING SECURITIES WITH THIS FORM.
CERTIFICATES OR EXISTING SECURITIES SHOULD BE SENT ONLY WITH A CONSENT AND
LETTER OF TRANSMITTAL.
L:\LEGAL\MDC\CMEXUSA\DELIVERY.003
70
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM T-1
STATEMENT OF ELIGIBILITY AND QUALIFICATION UNDER THE TRUST
INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A
TRUSTEE PURSUANT TO SECTION 305(b)(2)_________
---------------
U.S. TRUST COMPANY OF NEW YORK, N.A.
(Exact name of trustee as specified in its charter)
New York 13-5459866
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
114 West 47th Street 10036
New York, New York (Zip Code)
(Address of trustee's
principal executive offices)
General Counsel
U.S. Trust Company of New York, N.A.
114 West 47th Street
New York, New York 10036-1532
(212)852-1000
(Name, address and telephone number of agent for service)
---------------
Cinemark Mexico (USA) , Inc.
(Exact name of obligor as specified in its charter)
Texas 75-2493459
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
7502 Greenville Avenue, Suite 800
Dallas, Texas 75231
(Address of principal executive offices) (Zip Code)
---------------
12% Senior Subordinated PIK Notes Due 2003
(Title of the indenture securities)
71
<PAGE>
72
<PAGE>
Cinemark de Mexico, S.A.
de C.V.
(Exact name of guarantor as specified in its charter)
Mexico N/A
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
7502 Greenville Avenue
Suite 800
Dallas, Texas 75231
(Address of Principal executive office) (Zip code)
................................................................................
................................................................................
73
<PAGE>
GENERAL
1. General Information.
Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Federal Reserve Bank of New York (2nd District), New York, New York
(Board of Governors of the Federal Reserve System)
Federal Deposit Insurance Corporation, Washington, D.C.
New York State Banking Department, Albany, New York
(b) Whether it is authorized to exercise corporate trust powers.
The Trustee is authorized to exercise corporate trust
powers.
2. Affiliations with Obligor and Underwriters.
If the obligor or any underwriter for the obligor is an affiliate of
the Trustee, describe each such affiliation.
None.
3,4,5,6,7,8,9,10,11,12,13,14, and 15
Cinemark Mexico (USA),Inc. and Cinemark de Mexico, S. A. de C.V. currently are
not in default under any of its outstanding securities under which the applicant
is Trustee. Accordingly, responses to Items 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13,
14, and 15 of Form T-1 are not required under General Instruction B.
16. List of Exhibits.
T-1.1"Charter 204, Laws of 1853, An Act to Incorporate the United States Trust
Company of New York, as Amended", is incorporated by reference to Exhibit T- 1.1
to form T-1 filed on September 20, 1991 with the Securities and Exchange
Commission (the "Commission") pursuant to the Trust Indenture Act of 1939
(Registration No. 2221291).
T-1.2 - The Trustee was organized by a special act of the New York Legislature
in 1853 prior to the time that the New York Banking Law was revised to require a
certificate of authority to commence business. Accordingly, under New York
Banking Law, the Charter (Exhibit T-1.1) constitutes an equivalent of a
certificate of authority to commence business.
T-1.3 - The authorization of the trustee to exercise corporate trust
powers is contained in the Charter (Exhibit T-1.1).
74
<PAGE>
T4 - A copy of the By-laws of the U.S. Trust Company of New York, N.A., as
amended to date; incorporated herein by reference to Exhibit T-1.4 to Form T-1
filed on September 20,1991 with the Commission pursuant to the Trust Indenture
Act of 1939 (Registration No. 2221291).
T-1.6 - The consent of the Trustee required by Section 321(b) of the Trust
Indenture Act of 1939.
T-1.7 - A copy of the latest report of condition of the Trustee published
pursuant to law or the requirements of its supervising or examining authority.
NOTE
As of September 20,1996 the Trustee has 2,999,020 shares of Common Stock
outstanding, all of which are owned by its parent company, U.S. Trust
Corporation. The term "Trustee" in Item 2, refers to each of United States Trust
Company of New York and its parent company, U. S. Trust Corporation.
In Answering Item 2 in this statement of eligibility and qualification, as to
matters peculiarly within the knowledge of the obligor or its directors, the
trustee has relied upon information furnished to it by the obligor and will rely
on information to be furnished by the obligor and the trustee disclaims
responsibility for the accuracy or completeness of such information. ----
Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee,
United States Trust Company of New York, a corporation organized and existing
under the laws of the State of New York, has duly caused this statement of
eligibility and qualification to be signed on its behalf by the undersigned,
thereunto duly authorized, all in the City of New York, and State of New York on
the 30th day of September, 1996.
U.S. Trust Company of New York, N.A., Trustee
By: /s/ Bill Barber
Bill Barber
75
<PAGE>
Authorized Signature
76
<PAGE>
Exhibit T-1.6
CONSENT OF TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture Act of
1939 as amended in connection with the proposed issue of Cinemark Mexico (USA),
Inc.12% Senior Subordinated Notes due 2003, we hereby consent that reports of
examination by Federal, State, Territorial or District authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
request therefore.
U.S. Trust Company of New York, N.A.
By: /s/ Bill Barber
Bill Barber
Authorized Signature
77
<PAGE>
Exhibit T-1.6
The consent of the trustee required by
Section 321 (b) of the Act.
United States Trust Company of New York
114 West 47th Street
New York, NY 10036
March 5, 1990
Securities and Exchange Commission 450 5th Street, N.W.
Washington, D.C. 20549
Gentlemen:
Pursuant to the provisions of Section 321 (b) of the Trust Indenture Act of
1939, and subject to the limitations set forth therein, United States Trust
Company of New York ("U. S. Trust") hereby consents that reports of examinations
of U. S. Trust by Federal, State, Territorial or District authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
request therefor.
Very truly yours,
UNITED STATES TRUST
COMPANY OF NEW YORK
By: /s/ Gerard F.
Ganey
Gerard F. Ganey
Vice President
GF/pg
0302-LT.9
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EXHIBIT T-1.7
UNITED STATES TRUST COMPANY OF NEW YORK
CONSOLIDATED STATEMENT OF CONDITION
JUNE 30, 1996
($IN THOUSANDS)
ASSETS
Cash and Due from Banks $ 77,810
Short-Term Investments 18,306
Securities, Available for Sale 867,513
Loans
1,333,282
Less: Allowance for Credit Losses 12,858
Net Loans 1,320,424
Premises and Equipment 57,561
Other Assets 132,888
Total Assets $2,474,502
LIABILITIES
Deposits:
Non-Interest Bearing $ 469,797
Interest Bearing 1,545,026
Total Deposits 2,014,823
Short-Term Credit Facilities 170,747
Accounts Payable and Accrued Liabilities 136,595
Total Liabilities $2,322,165
STOCKHOLDER'S EQUITY
Common Stock 14,995
Capital Surplus 42,394
Retained Earnings 96,902
Unrealized Gains (Losses) on Securities
Available for Sale, Net of Taxes ( 1,954)
----------
Total Stockholder's Equity 152,337
Total Liabilities and
Stockholder's Equity $2,474,502
I, Richard E. Brinkmann, Senior Vice President & Comptroller of the named bank
do hereby declare that this Statement of Condition has been prepared in
conformance with the instructions issued by the appropriate regulatory authority
and is true to the best of my knowledge and belief.
Richard E. Brinkman, SVP & Controller
September 12, 1996
tl-edgar.5
t-l,k3q96
79
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