SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) of the
SECURITIES EXCHANGE ACT OF 1934
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Date of Report (Date of earliest event reported): November 21, 1997
Clearview Cinema Group, Inc.
(Exact name of registrant as specified in charter)
Delaware 001-13187 22-3338356
(State or other (Commission file (IRS employer
jurisdiction of number) identification no.)
incorporation)
7 Waverly Place 07940
Madison, New Jersey (Zip code)
(Address of principal executive
offices)
Registrant's telephone number,
including area code: (201) 377-4646
Item 2. Acquisition or Disposition of Assets.
On November 21, 1997, Clearview Cinema Group, Inc. (the "Company"),
together with its subsidiaries CCC Succasunna Cinema Corp. and CCC Parsippany
Cinema Corp. (together, the "Subsidiaries"), purchased certain assets from F&N
Cinema, Inc. and Roxbury Cinema, Inc. (together, the "Sellers"), comprising the
operations of two multi-plex theatres with a total of 22 screens located in
Morris County, New Jersey. The Company intends to continue to use the purchased
assets in the operation of multi-plex theatres.
Pursuant to an Asset Purchase Agreement dated as of November 21, 1997 (the
"Asset Purchase Agreement") among the Company, the Subsidiaries, the Sellers and
John Nelson, Pamela Ferman and Seth Ferman (the "Stockholders"), the
Subsidiaries purchased two leasehold interests and certain furniture, fixtures,
equipment and personal property related to the operation of the two theatres,
and assumed certain liabilities relating to the leases of the theatres. The
Asset Purchase Agreement is attached hereto as Exhibit 2.01 and incorporated by
reference herein in its entirety.
The aggregate purchase price payable under the Asset Purchase Agreement
was $18.5 million and was paid in consideration consisting of: (i) $11.6 million
in cash; (ii) a Subordinated Promissory Note of the Company in the amount of
$4.0 million; (iii) a Subordinated Promissory Note of the Company in the amount
of $2.0 million; (iv) shares of the Company's Common Stock, par value $.01 per
share ("Company Common Stock"), with an aggregate average market value of
$500,000 for the ten trading days preceding November 21, 1997; and (v) $400,000
to be held in escrow to satisfy certain obligations of the Sellers under a
leasehold mortgage. The Subordinated Promissory Note in the amount of $4.0
million bears interest at the annual rate of 10 1/2%, payable monthly in
arrears. Principal on such note is payable on the earliest to occur of (i) the
fifth anniversary of the note, (ii) the closing of the issuance by the Company
of certain debt securities, and (iii) the issuance in an underwritten public
offering by the Company of additional equity securities or the issuance of debt
securities to institutional investors, in each case with an aggregate offering
price of at least $10.0 million. The Subordinated Promissory Note in the amount
of $2.0 million bears interest at the annual rate of 10 1/2%, which is payable
monthly in arrears. Principal on such note is payable upon the earliest to occur
of (i) the closing of the issuance by the Company of certain debt securities,
(ii) the issuance in an underwritten offering by the Company of additional
equity securities or the issuance of debt securities to institutional investors,
in each case with an aggregate offering price of at least $10.0 million, (iii)
upon demand if a valid building permit is not issued for the Mansfield Theatre
(as defined below) by June 1, 1998, (iv) the date 120 days after the date a
valid certificate of occupancy is issued for the Mansfield Theatre, and (v)
January 15, 1999. The aggregate purchase price under the Asset Purchase
Agreement was determined by arms' length negotiations among the Company and the
Sellers.
In connection with the closing of the Asset Purchase Agreement, the
Sellers entered into a Voting Trust Agreement dated as of November 21, 1997 (the
"Voting Trust") with A. Dale Mayo, the Chairman, President and Chief Executive
Officer of the Company, acting as Trustee (the "Trustee"), relating to the
shares of Common Stock issued to the Sellers as consideration
under the Asset Purchase Agreement. Pursuant to the Voting Trust, the Trustee
has the power to vote such shares and all dividends and distributions with
respect to such shares will be remitted by the Trustee to the Sellers. A copy of
the Voting Trust is attached hereto as Exhibit 9.01 and is incorporated by
reference herein in its entirety.
The Company also entered into a Registration Rights Agreement dated
November 21, 1997 (the "Registration Rights Agreement") with the Sellers.
Pursuant to the Registration Rights Agreement, the Company granted the Sellers
incidental registration rights to participate and sell the shares of Company
Common Stock received by the Sellers pursuant to the Asset Purchase Agreement in
a registered offering being conducted by the Company, with the costs and
expenses of such registration to be borne by the Company. A copy of the
Registration Rights Agreement is attached hereto as Exhibit 10.03 and is
incorporated by reference herein in its entirety.
On November 21, 1997, the Company also entered into a merger agreement
with CCC Mansfield Cinema Corp. ("CCC Acquisition"), Warren County Cinemas, Inc.
("Mansfield"), and the Stockholders and Martin Drescher (the "Merger
Agreement"), which provides for the merger of Mansfield into CCC Acquisition, a
subsidiary of the Company, subject to the satisfaction of certain closing
conditions. Mansfield holds a leasehold interest in certain real property on
which a multi-plex theatre development in Warren County, New Jersey (the
"Mansfield Theatre") is contemplated to be built. The closing under the Merger
Agreement is scheduled to occur within ten business days after a construction
permit to build the Mansfield Theatre has been issued, but in no event later
than January 15, 1999, subject to certain exceptions if the permit is not
issued. The Merger Agreement is attached hereto as Exhibit 2.02 and is
incorporated by reference herein in its entirety.
The purchase price payable under the Merger Agreement is $1.0 million,
which is to be paid in shares of Company Common Stock with an aggregate average
market value of $1.0 million for the ten trading days preceding the closing;
provided, however, that the number of shares of Company Common Stock to be
issued shall not exceed 90,909 or be less than 76,923. The Merger Agreement
further provides that the Company will enter into a voting trust agreement and
registration rights agreement with respect to the shares of Company Common Stock
to be issued as consideration under the Merger Agreement. The Merger Agreement
also provides for a deferred purchase price to be paid to the Stockholders in an
amount equal to the excess over $2.5 million (up to a maximum of $500,000) of
the total average revenue that CCC Acquisition generates during the two-year
period after the closing date of the Merger Agreement.
Item 7. Financial Statements and Exhibits.
(a) Financial statements of businesses acquired.
The Company intends to file the financial statements required within
60 days of the initial filing of this report.
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(b) Pro forma financial information.
The Company intends to file the pro forma financial information
required within 60 days of the initial filing of this report.
(c) Exhibits.
2.01 Asset Purchase Agreement dated as of November 21, 1997 by and
among Clearview Cinema Group, Inc., CCC Succasunna Cinema
Corp., CCC Parsippany Cinema Corp., F&N Cinema, Inc., Roxbury
Cinema, Inc., John Nelson, Pamela Ferman and Seth Ferman.
2.02 Merger Agreement dated as of November 21, 1997 by and among
Clearview Cinema Group, Inc., CCC Mansfield Cinema Corp.,
Warren County Cinemas, Inc., John Nelson, Pamela Ferman and
Seth Ferman.
9.01 Voting Trust Agreement dated as of November 21, 1997 by and
among F&N Cinema, Inc., Roxbury Cinema, Inc. and A. Dale Mayo,
as Trustee.
10.01 Subordinated Promissory Note dated as of November 21, 1997 in
the amount of $4.0 million.
10.02 Subordinated Promissory Note dated as of November 21, 1997 in
the amount of $2.0 million.
10.03 Registration Rights Agreement dated as of November 21, 1997 by
and among Clearview Cinema Group, Inc., F&N Cinema, Inc. and
Roxbury Cinema, Inc.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CLEARVIEW CINEMA GROUP, INC.
By: /s/ A. Dale Mayo
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A. Dale Mayo
Title: Chairman of the Board,
President and Chief Executive
Officer
Date: December 5, 1997
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Exhibit Index
SEQUENTIAL
EXHIBIT NO. DOCUMENT PAGE NO.
2.01 Asset Purchase Agreement dated as of
November 21, 1997 by and among Clearview
Cinema Group, Inc., CCC Succasunna
Cinema Corp., CCC Parsippany Cinema
Corp., F&N Cinema, Inc., Roxbury Cinema,
Inc., John Nelson, Pamela Ferman and
Seth Ferman.
2.02 Merger Agreement dated as of November
21, 1997 by and among Clearview Cinema
Group, Inc., CCC Mansfield Cinema Corp.,
Warren County Cinemas, Inc., John
Nelson, Pamela Ferman and Seth Ferman.
9.01 Voting Trust Agreement dated as of
November 21, 1997 by and among F&N
Cinema, Inc., Roxbury Cinema, Inc. and
A. Dale Mayo, as Trustee.
10.01 Subordinated Promissory Note dated as of
November 21, 1997 in the amount of $4.0
million.
10.02 Subordinated Promissory Note dated as of
November 21, 1997 in the amount of $2.0
million.
10.03 Registration Rights Agreement dated as
of November 21, 1997 by and among
Clearview Cinema Group, Inc., F&N
Cinema, Inc. and Roxbury Cinema, Inc.