Exhibit 10.01
CLEARVIEW CINEMA GROUP, INC.
CONTRIBUTION, EXCHANGE, AND TERMINATION
AGREEMENT
December __, 1994
This Contribution, Exchange, and Termination Agreement (this "Agreement")
is made by and among Clearview Cinema Group, Inc., a Delaware corporation (the
"Company"), A. Dale Mayo ("Mayo"), and Brett E. Marks ("Marks").
Mayo owns 1,000 shares of the common stock of Clearview Theater Group,
Inc., a New Jersey corporation ("Theater"), 100 shares of the common stock of
CCC Madison Triple Cinema Corp., a New Jersey corporation ("Madison"), 10 shares
of the common stock of CCC Chester Twin Cinema Corporation, a New Jersey
corporation ("Chester") and 10 shares of the common stock of CCC Manasquan
Cinema Corporation, a New Jersey corporation ("Manasquan," and together with
Theater, Madison, and Chester, the "Cinema Companies"). Marks owns 96 shares of
the common stock of Madison and 9.6 shares of the common stock of Chester. The
shares described in the preceding two sentences (the "Cinema Company Shares")
constitute all of the issued and outstanding capital stock of the Cinema
Companies.
Madison has promissory notes outstanding as follows: (i) a promissory note
in the principal amount of $125,000 payable to Marks and (ii) a promissory note
in the principal amount of $96,000 payable to Mayo. Chester has outstanding a
promissory note in the principal amount of $29,000 payable to Mayo. The
promissory notes described in the preceding two sentences are collectively
referred to in this Agreement as the "Notes."
Madison and Chester are each a party to a management agreement and a
shareholders agreement as follows: (i) Management Agreement between Madison and
A. Dale Mayo & Associates, Inc., dated April 1, 1994, (ii) Management Agreement
between Chester and A. Dale Mayo & Associates, Inc., dated April 1, 1994, (iii)
Shareholders' Agreement among Madison, Mayo, and Marks, dated April 1, 1994, and
(iv) Shareholders' Agreement among Chester, Mayo, and Marks, dated April 1, 1994
(collectively, the "Cinema Company Agreements").
The parties wish to provide for the contribution by Mayo and Marks to the
Company of the Cinema Company Shares and the Notes in exchange for shares of the
common stock of the Company and for the termination of the Cinema Company
Agreements. Simultaneously with the execution and delivery of this Agreement,
the Company is issuing shares of its common stock to CMNY Capital II, L.P.
("CMNY") pursuant to an Investment and Stockholders Agreement among CMNY, the
Company, Mayo, and Marks, dated the date hereof (the "Stockholders Agreement").
The contribution and exchange of stock provided for in this Agreement is
intended to be a tax-free transaction under Section 351 of the Internal Revenue
Code of 1986, as amended.
Accordingly, the parties hereto, intending to be legally bound, agree as
follows:
1. Contribution and Exchange. Mayo and Marks hereby contribute all their
respective Cinema Company Shares and Notes to the Company in exchange for 550
and 200 shares, respectively, of the common stock of the Company (the "Shares").
Simultaneously upon the execution and delivery of this Agreement, Mayo and Marks
are delivering to the Company stock certificates for the Cinema Company Shares,
duly executed for transfer, and the Company is delivering to each of Mayo and
Marks a stock certificate representing the respective number of the Shares
issued to him.
2. Termination of the Cinema Company Agreements. The Cinema Company
Agreements are hereby terminated.
3. Voting Trust Agreement. Immediately following the issuance of Shares to
Marks pursuant to this Agreement, Marks shall enter into a Voting Trust
Agreement with Mayo, the form of which is attached hereto as Exhibit A.
4. Representations and Warranties.
4.1 Each of Mayo and Marks represents and warrants to the Company and to
each other as follows:
a. He understands that the Shares have not been registered under the
Securities Act of 1933, as amended, (the "Federal Act") or any state securities
laws because of specific exemptions under the provisions thereof that depend in
part upon the representations made by him in this Agreement. He understands that
the Company is relying upon his representations and agreements contained in this
Agreement (and any supplemental information furnished by him) for the purpose of
determining whether this transaction meets the requirements for those
exemptions.
b. He has knowledge, skill and experience in business, financial and
investment matters so that he is capable of evaluating the merits and risks of
an investment in the Shares. To the extent that he has deemed it appropriate to
do so, he has retained, and relied upon, appropriate professional
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advice regarding the tax, legal and financial merits and consequences of the
investment in the Shares.
c. He has not relied on any representations and warranties of the
Company except as expressly set forth in this Agreement; he has been provided
with access to the books and records and personnel of the Company and the Cinema
Companies and any other information requested by him in connection with any
independent investigation of the Company and the Cinema Companies, their
respective management, and related matters that he deems to be, or that his
advisors (if any) have advised to be, necessary or advisable in connection with
an investment in the Shares; and he and his advisors (if any) have received all
information and data that he and his advisors (if any) believe to be necessary
in order to reach an informed decision as to the advisability of an investment
in the Shares. He is satisfied that there are no material facts regarding the
Company or the Shares as to which he is not aware.
d. He has reviewed his financial condition and commitments, alone and
together with his advisors, if any, and, based on that review, he is satisfied
that (i) he has adequate means of providing for his financial needs and possible
contingencies and has assets or sources of income that, taken together, are more
than sufficient so that he could bear the risk of loss of his entire investment
in the Shares, (ii) he has no present or contemplated future need to dispose of
all or any portion of the Shares to satisfy any existing or contemplated
undertaking, need or indebtedness, and (iii) he is capable of bearing the
economic risk of an investment in the Shares for the indefinite future. He
agrees to furnish any additional information requested by the Company to assure
compliance of this transaction with applicable federal and state securities laws
in connection with the Shares.
e. He understands that the Shares are "restricted securities" under
applicable Federal Securities laws and that the Federal Act and the rules of the
Securities and Exchange Commission provide in substance that he may dispose of
the Shares only pursuant to an effective registration statement under the
Federal Act or an exemption from registration if available.
f. He is acquiring the Shares for investment only and not with a view
to or in connection with any resale or distribution of the Shares, and he has no
present intention of making any sale, assignment, pledge, gift, transfer or
other disposition of the Shares or any interest therein.
g. The Cinema Company Shares being contributed hereby in exchange for
the Shares represent his entire equity interest in the Cinema Companies, and
subsequent to the
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transactions contemplated by this Agreement he will have no ownership of, nor
any outstanding or contingent agreements, arrangements or commitments, warrants,
options or other rights to subscribe for or purchase, or otherwise acquire by
conversion, exchange or otherwise any of the capital stock of the Cinema
Companies, and none of the Cinema Companies has any liabilities or obligations
to him.
h. He has not relied upon any representations or warranties as to the
value of the Cinema Company, the Cinema Company Shares, the Company or the
Shares.
4.2 The Company represents and warrants to each of Mayo and Marks as
follows:
a. The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and has all requisite
corporate power and authority to carry on its business as now conducted and as
proposed to be conducted.
b. The Shares when issued hereunder will be validly issued, fully paid
and non-assessable. Immediately following the issuance of the Shares hereunder
and the sale of shares of common stock by the Company to CMNY, the outstanding
shares of the Company's capital stock shall consist solely of 200 shares held by
Marks, 550 shares held by Mayo and 250 shares held by CMNY.
c. The Company has made any investigations that it deems necessary as
to the value of the Cinema Company Shares and has not relied upon any
representations and warranties of Mayo or Marks, except as expressly set forth
herein.
5. Shares. The Shares issued hereunder shall be subject to the Stockholders
Agreement, and the certificates evidencing the Shares shall bear the following
legend:
The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, (the "Act") or any state Blue
Sky or securities laws. These securities cannot be resold without
registration under the Act or applicable state securities laws or an
exemption therefrom.
In addition, the securities represented by this certificate are subject to
an Investment and Stockholders Agreement dated December ___, 1994 among the
Company and the other parties named therein, as the same may be
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modified from time to time, and may not be sold, offered, transferred,
assigned, pledged, hypothecated or otherwise disposed of except in
compliance with the provisions of that agreement.
6. Governing Law. This Agreement, except for those provisions mandatorily
governed by Delaware law, shall be construed and enforced in accordance with and
governed by the laws of the State of New York, exclusive of its conflict of laws
provisions.
7. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which shall
constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
CLEARVIEW CINEMA GROUP, INC.
By: __________________________
A. Dale Mayo
President
-------------------------------
A. Dale Mayo
-------------------------------
Brett E. Marks
CONSENTED AND AGREED TO FOR THE PURPOSE OF SECTION 2 HEREOF:
CCC MADISON TRIPLE CINEMA CORP.
By: _________________________________
A. Dale Mayo
President
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CCC CHESTER TWIN CINEMA CORPORATION
By: _______________________________
A. Dale Mayo
President
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A. DALE MAYO & ASSOCIATES, INC.
By: _______________________________
A. Dale Mayo
President
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EXHIBIT A
VOTING TRUST AGREEMENT