MERGER AGREEMENT
This Merger Agreement (this "AGREEMENT") is dated as of November 21, 1997,
by and among Clearview Cinema Group, Inc., a Delaware Corporation ("CCG"); CCC
Mansfield Cinema Corp., a Delaware corporation ("ACQUISITION"); Warren County
Cinemas, Inc., a New Jersey corporation, ("MANSFIELD"); and John Nelson, Pamela
Ferman and Seth Ferman (the "STOCKHOLDERS") and Martin Drescher.
Mansfield holds a leasehold interest in certain Real Property (as defined
below) on which a movie theater is contemplated to be built. The parties hereto
desire that Mansfield merge with and into Acquisition, with Acquisition
surviving, upon the terms and subject to the conditions set forth below. This
transaction is intended to be a tax-free reorganization within the meaning of
Section 368(a) of the Code (as defined below).
In consideration of the representations, warranties, covenants, and
agreements contained in this Agreement, the parties, each intending to be
legally bound hereby, agree as set forth below:
ARTICLE I.
DEFINITIONS; CONSTRUCTION
1.1. DEFINITIONS. As used in this Agreement, the following terms have
the meanings specified in this Section.
"ACQUISITION" has the meaning given that term in the heading of this
Agreement.
"ACQUISITION DAMAGES" has the meaning given that term in Section 7.2.
"ACQUISITION INDEMNITEES" has the meaning given that term in Section 7.2.
"AFFILIATE" means, with respect to any Person, any other Person that,
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with such Person.
"AGREEMENT" means this Agreement, as it may be amended from time to time.
"BENEFIT PLAN" means any written and unwritten "employee benefit plans"
within the meaning of Section 3(3) of ERISA, and any other written and unwritten
profit sharing, pension, savings, deferred compensation, fringe benefit,
insurance, medical, medical reimbursement, life, disability, accident,
post-retirement health or welfare benefit, stock option, stock purchase, sick
pay, vacation, employment, severance, termination or other plan, agreement,
contract, policy, trust fund or arrangement.
"CCG" has the meaning given that term in the heading of this Agreement.
"CCG SHARES" means the shares of Common Stock of CCG being delivered by
Acquisition to Mansfield pursuant to this Agreement.
"CERCLIS" means the Comprehensive Environmental Response Compensation
Liability Information System List pursuant to Superfund.
"CLOSING" has the meaning given that term in Section 2.12.
"CLOSING DATE" has the meaning given that term in Section 2.12.
"CODE" means the Internal Revenue Code of 1986, as amended, and the
applicable rulings and regulations thereunder.
"DAMAGES" has the meaning given that term in Section 7.4.
"DEFERRED MERGER CONSIDERATION" has the meaning given that term in Section
2.7(b).
"DGCL" has the meaning given that term in Section 2.1.
"EFFECTIVE TIME" has the meaning given that term in Section 2.2.
"ENCUMBRANCE" means any mortgage, deed of trust, pledge, security
interest, encumbrance, option, right of first refusal, agreement of sale,
adverse claim, easement, lien, lease, assessment, restrictive covenant,
encroachment, right-of-way, burden or charge of any kind or nature whatsoever or
any item similar or related to the foregoing.
"ENVIRONMENTAL LAW" means any applicable Law relating to public health and
safety or protection of the environment, including common law nuisance, property
damage and similar common law theories.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the applicable rulings and regulations thereunder.
"GOVERNING DOCUMENTS" means, with respect to any Person who is not a
natural Person, the certificate or articles of incorporation, bylaws, deed of
trust, formation or governing agreement and other charter documents or
organization or governing documents or instruments of such Person.
"GOVERNMENTAL BODY" means any court, government (federal, state, local or
foreign), department, commission, board, bureau, agency, official or other
regulatory, administrative or governmental authority or instrumentality.
"INDEMNIFIED PARTY" has the meaning given that term in Section 7.4.
"INDEMNIFYING PARTY" has the meaning given that term in Section 7.4.
"INSTRUMENTS OF MERGER" has the meaning given that term in Section 2.2.
"LAW" means any applicable federal, state, municipal, local or foreign
statute, law, ordinance, rule, regulation, judgment or order of any kind or
nature whatsoever including any public policy, judgment or order of any
Governmental Body or principle of common law.
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"LIABILITIES" with respect to any Person, means all debts, liabilities and
obligations of such Person of any nature or kind whatsoever, whether or not due
or to become due, accrued, fixed, absolute, matured, determined, determinable or
contingent and whether or not incurred directly by such Person or by any
predecessor of such Person, and whether or not arising out of any act, omission,
transaction, circumstance, sale of goods or service or otherwise.
"LITIGATION" has the meaning given that term in Section 3.8.
"LEASE" means the lease agreement attached as "Exhibit A".
"MANSFIELD" has the meaning given that term in the heading of this
Agreement.
"MANSFIELD DAMAGES" has the meaning given that term in Section 7.3.
"MANSFIELD INDEMNITEES" has the meaning given that term in Section 7.3.
"MANSFIELD SHARES" means the outstanding shares of capital stock of
Mansfield, as identified on Schedule 3.5.
"MERGER" has the meaning given that term in Section 2.1.
"MERGER CONSIDERATION" has the meaning given that term in Section 2.7(b).
"PERMIT" means a valid construction permit issued by Mansfield Township,
New Jersey or the State of New Jersey to build a 12 screen movie theater on the
Real Property in accordance with plans prepared by Johannes Hoffman Architects,
P.C. and Maser Sosinski and Associates as called for in the Lease.
"PERSON" means and includes a natural person, a corporation, an
association, a partnership, a limited liability company, a trust, a joint
venture, an unincorporated organization, a business, any other legal entity, or
a Governmental Body.
"REAL PROPERTY" has the meaning given that term in Section 3.10.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement
substantially in the form of Exhibit B.
"REGULATED MATERIAL" means any hazardous substance as defined by any
Environmental Law and any other material regulated by any applicable
Environmental Law, including petroleum, petroleum-related material, crude oil or
any fraction thereof, polychlorinated biphenyls, and any friable asbestos.
"RELATED PARTY" means (i) Mansfield, (ii) any Affiliate of Mansfield,
(iii) any officer or director of any Person identified in clauses (i) or (ii)
preceding, and (iv) any spouse, sibling, ancestor or lineal descendant of any
natural Person identified in any one of the preceding clauses.
"SECURITY RIGHT" means, with respect to any security, any option, warrant,
subscription right, preemptive right, other right, proxy, put, call, demand,
plan, commitment, agreement, understanding or arrangement of any kind relating
to such security, whether issued or unissued,
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or any other security convertible into or exchangeable for any such security.
"SECURITY RIGHT" includes any right relating to issuance, sale, assignment,
transfer, purchase, redemption, conversion, exchange, registration or voting and
includes rights conferred by statute, by the issuer's Governing Documents or by
agreement.
"SECURITIES ACT" means the U.S. Securities Act of 1933, as amended.
"SURVIVING CORPORATION" has the meaning given that term in Section 2.1.
"STOCKHOLDERS" has the meaning given that term in the heading of this
Agreement.
"SUPERFUND" means the Comprehensive Environmental Response Compensation
and Liability Act of 1980, 42 U.S.C. Sections 6901 et seq., as amended.
"TAX" means any domestic or foreign federal, state, county, local or
foreign tax, levy, impost or other charge of any kind whatsoever, including any
interest or penalty thereon or addition thereto, whether disputed or not.
"TAX RETURN" means any return, declaration, report, claim for refund, or
information return or statement relating to any Tax, including any schedule or
attachment thereto, and including any amendment thereof.
"VOTING TRUST AGREEMENT" means the Voting Trust Agreement in the form of
"Exhibit C".
1.2. CONSTRUCTION. As used herein, unless the context otherwise requires:
(i) references to "Article" or "Section" are to an article or section hereof;
(ii) all "Exhibits" and "Schedules" referred to herein are to Exhibits and
Schedules attached hereto and are incorporated herein by reference and made a
part hereof; (iii) "include," "includes" and "including" are deemed to be
followed by "without limitation" whether or not they are in fact followed by
such words or words of like import; and (iv) the headings of the various
articles, sections and other subdivisions hereof are for convenience of
reference only and shall not modify, define or limit any of the terms or
provisions hereof.
ARTICLE II.
PURCHASE AND SALE
2.1. THE MERGER. Upon the terms and subject to the conditions of this
Agreement, at the Effective Time, Mansfield shall merge with and into
Acquisition, and Acquisition shall be the surviving corporation to such merger
(the "SURVIVING CORPORATION"), and the separate corporate existence of Mansfield
shall thereupon cease (the "MERGER"). The Surviving Corporation shall continue
to be governed by the laws of the State of Delaware and the separate corporate
existence of the Surviving Corporation with all rights, privileges, immunities,
powers and franchises shall continue unaffected by the Merger. The Merger shall
have the effects specified in the Delaware General Corporation Law (the "DGCL"),
the Business Corporation Act of New Jersey and this Agreement.
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2.2. EFFECTIVE TIME. Prior to the Closing Date, and provided that this
Agreement has not been terminated and abandoned pursuant to Section 6.4, each of
Acquisition and Mansfield shall execute the state law instruments of merger
effecting the Merger in accordance with the terms of this Agreement
("INSTRUMENTS OF MERGER"). Such Instruments of Merger shall be filed with the
Secretary of State of the State of New Jersey and the Secretary of State of the
State of Delaware simultaneously with the Closing. The Merger shall become
effective at the time the last of the applicable Instruments of Merger shall
have been duly filed with the Secretary of State of the State of New Jersey and
the Secretary of State of the State of Delaware, and such time is referred to
herein as the "EFFECTIVE TIME".
2.3. CERTIFICATE OF INCORPORATION. The Certificate of Incorporation of
Acquisition in effect immediately prior to the Effective Time shall thereafter
continue to be the Certificate of Incorporation of the Surviving Corporation
until duly amended further in accordance with the terms thereof and the DGCL.
2.4. BY-LAWS. The By-laws of Acquisition in effect immediately prior to
the Effective Time shall thereafter continue to be the By-Laws of the Surviving
Corporation until duly amended further in accordance with the terms thereof, the
Certificate of Incorporation of the Surviving Corporation and the DGCL.
2.5. DIRECTORS. The directors of Acquisition immediately prior to the
Effective Time shall thereafter continue to be the directors of the Surviving
Corporation from and after the Effective Time to serve until their respective
successors shall have been duly elected and qualified in the manner provided in
the Certificate of Incorporation and By-laws of the Surviving Corporation or as
otherwise provided by law.
2.6 OFFICERS. The officers of Acquisition immediately prior to the
Effective Time shall thereafter be the officers of the Surviving Corporation
from and after the Effective Time and until their respective successors shall
have been duly elected and qualified in the manner provided in the Certificate
of Incorporation and By-laws of the Surviving Corporation or as otherwise
provided by law.
2.7. MANNER OF CONVERTING SHARES. At the Effective Time, each of the
following transactions shall be deemed to occur simultaneously:
(a) ACQUISITION. By virtue of the Merger and without any action on the
part of Stockholders, each then issued and outstanding share, and each share
then held in the treasury, of Common Stock, par value $.01 per share, of
Acquisition shall automatically be converted into one share of Common Stock, par
value $.01 per share, of the Surviving Corporation.
(b) MANSFIELD. By virtue of the Merger and without any action on the part
of Stockholders, each then issued and outstanding share, and each share then
held in the treasury, of Common Stock of Mansfield shall be automatically
canceled, and Stockholders shall be entitled to receive, in the aggregate, that
number of shares of CCG Common Stock equal to the result obtained by dividing
$1,000,000 million by the average closing price of CCG Common Stock for the ten
most recent trading days immediately prior to the Closing Date as reported by
the American Stock Exchange; provided, however, that in no event shall the
number of CCG Shares
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to be delivered pursuant to this sentence be greater than 90,909 or less than
76,923 (the "MERGER CONSIDERATION"). In addition, within 90 days after the
second anniversary of Closing, CCG shall deliver to Stockholders an amount of
cash equal to the total average annual revenue for the two-year period
commencing on the Closing Date that the Surviving Corporation generates in
excess of $2.5 million (the "DEFERRED MERGER CONSIDERATION"). Notwithstanding
the foregoing, the Deferred Merger Consideration shall not exceed $500,000 and
may be paid, at CCG's option, in shares of CCG's common stock valued at the
average closing price of CCG Common Stock for the ten most recent trading days
immediately prior to such 90th day. Merger Consideration and Deferred Merger
Consideration hereunder shall be delivered to the Stockholders in the following
proportions: John Nelson 50/120; Seth Ferman 25/120; Pam Ferman 25/120; and
Martin Drescher 20/120; provided that such individuals may assign any part of
their interests in the Deferred Merger Consideration to any one or more of the
other individuals upon written notice to CCG.
2.8. CCG SHARES. All CCG Shares being delivered pursuant hereto shall not
be registered under the Securities Act and shall be subject to the Voting Trust
Agreement and Stockholders shall have the benefit of the Registration Rights
Agreement with respect to such Shares. Stockholders covenant that they will not
sell or dispose of the CCG Shares except in accordance with the rules set forth
in Rule 144 issued by the Securities and Exchange Commission under the
Securities Act and shall not sell, transfer or pledge the CCG Shares in the
absence of a registration under the Securities Act or unless CCG receives an
opinion of counsel (which may be counsel for CCG) reasonably acceptable to it
stating that such sale or transfer is exempt from the registration and
prospectus delivery requirements of the Securities Act. Stockholders agree and
consent that the certificates representing the CCG Share shall contain the
following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.
SUCH SECURITIES MAY NOT BE SOLD, TRANSFERRED OR PLEDGED IN THE ABSENCE OF
SUCH REGISTRATION OR UNLESS CLEARVIEW CINEMA GROUP, INC. RECEIVES AN
OPINION OF COUNSEL (WHICH MAY BE COUNSEL FOR CLEARVIEW CINEMA GROUP, INC.)
REASONABLY ACCEPTABLE TO IT STATING THAT SUCH SALE OR TRANSFER IS EXEMPT
FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SAID ACT AND
THAT SUCH SALE OR TRANSFER IS MADE IN ACCORDANCE WITH THE RULE SET FORTH
IN RULE 144 ISSUED BY THE SECURITIES EXCHANGE COMMISSION UNDER SAID ACT.
2.9. PAYMENT OF MERGER CONSIDERATION. The Merger Consideration (and the
Deferred Merger Consideration if CCG Shares are used in payment thereof) shall
be delivered after Closing to A. Dale Mayo, trustee under the Voting Trust
Agreement upon presentment of the certificates then formerly representing the
applicable Mansfield Shares.
2.10. CERTIFICATES REPRESENTING MANSFIELD SHARES. Until surrendered at the
Closing, the certificate or certificates that, immediately prior to the
Effective Time, shall have represented issued and outstanding Mansfield Shares,
at the Effective Time, shall represent for all purposes
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solely the right to receive the applicable Merger Consideration and Deferred
Merger Consideration. After the date hereof, no Mansfield Shares shall be
transferred to any person for any reason, and after the Effective Time, no
certificates formerly representing Mansfield Shares shall be transferred to any
person for any reason.
2.11. DIVIDENDS. All dividends at the Effective Time on or with respect to
Mansfield Shares declared at any time prior to the Effective Time and remaining
unpaid at the Effective Time and all other Securities Rights relating to the
Mansfield Shares or other shares of capital stock of Mansfield shall be deemed
to have been canceled at the Effective Time.
2.12. CLOSING. Subject to the terms and conditions of this Agreement, the
consummation of the Merger and other transactions contemplated hereby shall take
place at a closing (the "CLOSING") at the offices of Kirkpatrick & Lockhart LLP,
1251 Avenue of the Americas, 45th Floor, New York, New York 10020 within ten
business days after issuance of the Permit at such time or on such date as
Mansfield and Acquisition may mutually agree (the day on which the Closing takes
place being the "CLOSING DATE"), but in no event later than January 15, 1999.
2.13. RENT; EXPENSES. Mansfield shall be liable for all rent under the
Lease up to the date that the Permit is issued. Acquisition shall reimburse
Stockholders for all architect fees and other expenses incurred in obtaining the
Permit and developing the Real Property for the construction of the Theater
contemplated by the Lease, provided that such fees and expenses were incurred
after October 31, 1997.
2.14. STOCKHOLDERS' OPTION NOT TO CLOSE. If the Permit is not issued by
June 1, 1998, then Stockholders and Mansfield may at their sole discretion
choose not to Close hereunder upon written notice to CCG provided that such
notice is delivered to CCG prior to January 15, 1999. If Stockholders do not
deliver such notice to CCG by January 15, 1999, then neither CCG nor Acquisition
shall have an obligation to Close hereunder. In either such event, no party
hereto shall have any continuing liability hereunder to any other party hereto
except as provided in Section 6.4.
2.15. CCG'S OPTION TO PURCHASE IF THERE IS NO CLOSING. In the event that
three is no Closing hereunder under the circumstance described in Section 2.14,
then CCG shall have the right upon written notice to Stockholders to purchase
all of the assets of Mansfield (the "OPTION"). The Option may be exercised
during the 60 day period commencing on the 90th day after the second anniversary
of the issuance of the certificate of occupancy for the theater to be
constructed by Mansfield on the Real Property (the "NEW THEATER"). The purchase
price for such assets shall be equal to the greater of (i) six times such
theater's annual average earnings before interest, taxes, depreciation and
amortization (exclusive of extraordinary items) determined in accordance with
generally accepted accounting principles for the first two years of operation,
and (ii) $2 million plus the cost of development and construction of such
theater. Such purchase price shall be payable in cash at the closing of such
purchase and sale. Closing under the Option shall occur within 60 days after the
exercise of the Option and shall be subject the due diligence investigation of
CCG and the consent of the landlord to the Lease. During such 60 day period,
Mansfield shall provide to CCG and its representative complete access to the New
Theater and Mansfield's books and records. The other terms of such purchase
shall be
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substantially upon the terms set forth in that certain Asset Purchase Agreement
dated the date hereof, by and among CCG, CCC Succasunna Cinema Corp., Inc., a
Delaware corporation, CCC Parsippany Cinema Corp., Inc., a Delaware corporation,
F&N Cinema, Inc., a New Jersey corporation; Roxbury Cinema, Inc., a New Jersey
corporation, and Stockholders (the "ASSET PURCHASE AGREEMENT") except that the
liability cap on indemnification of representations and warranties shall be in
the same proportion to the purchase price for the New Theater as the liability
cap set forth in Section 7.4(b) of the Asset Purchase Agreement bears to the
purchase price for the theaters purchased pursuant to the Asset Purchase
Agreement. Neither Stockholders nor Mansfield shall sell all or substantially
all of the assets of Mansfield to any other person, enter into or effect any
merger, consolidation, division, reorganization or sale of a majority of the
capital stock of Mansfield or enter into any other transaction or take any other
act that would frustrate the purpose of this Section 2.15 prior to the
expiration of such 60 day period. The rights hereunder of CCG may be assigned by
CCG to any wholly owned subsidiary of CCG. The Option shall terminate upon any
material default by CCG or its affiliates under this Agreement or the Asset
Purchase Agreement or under any Other Agreement (as such term is defined under
this Agreement and the Asset Purchase Agreement), which default results in a
material out-of-pocket liability to the Mansfield or its affiliates and which
default is not waived or substantially cured within 30 days after CCG has notice
of such default, or on event of default under the Promissory Notes (as defined
in the Asset Purchase Agreement). The Option shall also expire if CCG or its
affiliates acquire or build a movie theater within a five mile radius of the
Real Property.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF
MANSFIELD AND STOCKHOLDERS
Mansfield and Stockholders represent and warrant, jointly and severally,
to Acquisition and CCG as set forth in this Article III and Martin Drescher
represents and warrants to Acquisition and CCG the matters set forth in Sections
3.2 and 3.3, the second sentence of Section 3.5, Section 3.17 and Section 3.18
as if Martin Drescher were included within the definition of "Stockholder"
therein.
3.1. ORGANIZATION, QUALIFICATION; CAPITALIZATION. Mansfield is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of organization, and has the corporate power and authority
to own or lease its properties and enter into this Agreement and perform its
obligations hereunder.
3.2. AUTHORIZATION; ENFORCEABILITY. This Agreement have been duly executed
and delivered by and constitute the legal, valid and binding obligations of
Mansfield, enforceable against Mansfield in accordance with their terms, except
as may be limited by applicable bankruptcy, insolvency, moratorium, fraudulent
transfer, preference and other laws and equitable principles affecting the scope
and enforcement to creditors' rights generally, and are also limited by
Acquisition's implied covenants of good faith, fair dealing and commercially
reasonable conduct, and by the effects of judicial discretion on the
availability of remedies and realization of benefits under and enforceability of
this Agreement in all respects as written. The Merger and all actions
contemplated by this Agreement have been duly and validly authorized by all
necessary proceedings by Mansfield.
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3.3. NO VIOLATION OF LAWS OR AGREEMENTS; CONSENTS. Neither the execution
and delivery of this Agreement, the consummation of the Merger and other
transactions contemplated hereby nor the compliance with or fulfillment of the
terms, conditions or provisions hereof by Mansfield will: (i) contravene any
provision of any Governing Document of Mansfield, (ii) conflict with, result in
a breach of, constitute a default or an event of default (or an event that
might, with the passage of time or the giving of notice or both, constitute a
default or event of default) under any of the terms of, result in the
termination of, result in the loss of any right under, or give to any other
Person the right to cause such a termination of or loss under, any Purchased
Asset or any other contract, agreement or instrument to which Mansfield or any
Stockholder is a party or by which any of its assets may be bound or affected,
(iii) violate any Law or violate any judgment or order of any Governmental Body
to which Mansfield is subject or by which any of its assets may be bound or
affected. Except as set forth on Schedule 3.3 and the filing of the Instruments
of Merger, no consent, approval or authorization of, or registration or filing
with, any Person is required in connection with the execution and delivery by
Mansfield of this Agreement or the consummation by Mansfield of the Merger or
the other transactions contemplated hereby or thereby.
3.4. UNDISCLOSED LIABILITIES. Mansfield has no Liabilities except as
set forth in the Lease and as shown on Schedule 3.4.
3.5. MANSFIELD SHARES. The issued and outstanding Mansfield Shares are
identified on Schedule 3.5. There exists no Security Rights with respect to the
Mansfield Shares.
3.6. CORPORATE PURPOSE. Mansfield was incorporated on June 26, 1996 for
the sole and limited intention of negotiating and holding the Lease and
constructing and operating a movie theater on the Real Property. Mansfield has
conducted no business of any kind whatsoever other than the negotiation of the
Lease and retention of an architect to draft plans for the construction of a
movie theater. Mansfield owns no assets other than the Lease and plans to
develop the Real Property.
3.7. TAXES. Mansfield has filed or caused to be filed on a timely basis,
or will file or cause to be filed on a timely basis or within a timely-obtained
extension, all Tax Returns that are required to be filed by it prior to or on
the Closing Date, pursuant to the Law of each governmental authority with taxing
power over it. Mansfield has no Liability for any Tax.
3.8. NO PENDING LITIGATION OR PROCEEDINGS. No action, suit, investigation,
claim or proceeding of any nature or kind whatsoever, whether civil, criminal or
administrative, by or before any Governmental Body or arbitrator ("LITIGATION")
is pending or, to the knowledge of Mansfield, threatened against or affecting
Mansfield, the Lease or any of the transactions contemplated by this Agreement,
and there is no basis for any such Litigation. There is presently no outstanding
judgment, decree or order of any Governmental Body against or affecting
Mansfield, any of its assets or liabilities, or any of the transactions
contemplated by this Agreement. Mansfield has no pending Litigation against any
third party.
3.9. LEASE. Except for the Lease, Mansfield is not a party to any
contract, lease, indenture, mortgage, instrument, commitment or other agreement,
arrangement or understanding, oral or written, formal or informal. The Lease is
the legal, valid and binding obligation
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of Mansfield and is in full force and effect. Mansfield has performed all
obligations required to be performed by it under the Lease and is not in breach
or default, and are not alleged to be in breach or default, in any respect
thereunder, and no event has occurred and no condition or state of facts exists
(or would exist upon the giving of notice or the lapse of time or both) that
would become or cause a breach, default or event of default thereunder, would
give to any Person the right to cause such a termination or would cause an
acceleration of any obligation thereunder.
3.10. REAL PROPERTY. Schedule 3.10 identifies the real estate subject to
the Lease (the "REAL PROPERTY") and identifies the record title holder of the
Real Property. Mansfield has the right to quiet enjoyment of the Real Property
for the full term, including all renewal rights, of the lease or similar
agreement relating thereto. The proposed use and operation of the Real Property
under the Lease conform to all applicable building, zoning, safety and
subdivision Laws, Environmental Laws and other Laws, and all restrictive
covenants and restrictions and conditions affecting title. Mansfield has not
received any written or oral notice of assessments for public improvements
against the Real Property or any written or oral notice or order by any
Governmental Body, any insurance company that has issued a policy with respect
to any of such properties or any board of fire underwriters or other body
exercising similar functions that i) claims any defect or deficiency with
respect to any of such properties or ii) requests the performance of any
repairs, alterations or other work to or in any of the Real Property or in the
streets bounding the same. Such public utilities are all available for
connection and will be adequate to service the operations of such facilities.
Mansfield has not received any written notice of any proposed, planned or actual
curtailment of service of any utility supplied to any facility of Mansfield.
3.11. ENVIRONMENTAL MATTERS. Mansfield is not subject to any Liability,
penalty or expense (including legal fees), and Acquisition will not suffer or
incur any loss, Liability, penalty or expense (including legal fees) by virtue
of any violation of any Environmental Law occurring prior to the Closing, any
environmental activity conducted on or with respect to any property at or prior
to the Closing or any environmental condition existing on or with respect to any
property at or prior to the Closing, in each case whether or not Mansfield
permitted or participated in such act or omission. None of the Real Property is
listed or, to the knowledge of Mansfield, proposed for listing on the National
Priorities List pursuant to Superfund, CERCLIS or any state or local list of
sites requiring investigation or cleanup.
3.12. TRANSACTIONS WITH RELATED PARTIES. No Related Party has any claim of
any nature, including any inchoate claim, against any of the assets of
Mansfield. No Related Party will at any time after Closing for any reason,
directly or indirectly, be or become entitled to receive any payment or transfer
of money or other property of any kind from Mansfield, and Mansfield will not at
any time after Closing for any reason, directly or indirectly, be or become
subject to any obligation to any Related Party; provided, however, that nothing
in this Section 3.12 shall prohibit any post-closing transactions between
Related Parties.
3.13. EMPLOYEES. Mansfield has no employees and never had any employees.
3.14. EMPLOYEE BENEFITS. Mansfield has no Employee Benefit Plans and never
had any Employee Benefit plans.
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3.15. SUBSIDIARIES AND INVESTMENTS. Mansfield does not own any shares of
capital stock of or other equity interest in any corporation, partnership, joint
venture or other entity.
Neither Mansfield nor any of its officers, directors or employees has
employed any broker or finder or incurred any Liability for any brokerage fee,
commission or finders' fee in connection with any of the transactions
contemplated hereby.
3.17. SECURITIES MATTERS. Stockholders acknowledge that they and their
representatives have received and reviewed all of the documents filed by CCG
through the date hereof (and on the Closing Date, through the Closing) with the
Securities and Exchange Commission. Stockholders and their representatives have
had, at their discretion, an opportunity to meet with the officers CCG to
discuss CCG's business. Stockholders are each acquiring the CCG Shares for his
or its own account with the intention of holding the CCG Shares for purposes of
investment, and not as a nominee or agent for any other party, and not with a
view to the resale or distribution of any of the CCG Shares, and no Stockholder
or has any intention of selling the CCG Shares or any interest therein in
violation of the federal securities laws or any applicable state securities
laws. Stockholders understand that the CCG Shares are not registered under the
Securities Act of 1933, as amended (the "1933 Act"), or under any state
securities laws. Each of the Stockholders is an "accredited investor" within the
meaning of that term as set forth in Rule 501 issued by the Securities and
Exchange Commission under the 1933 Act.
3.18. DISCLOSURE. None of the representations or warranties of Mansfield
or Stockholders contained herein and none of the information contained in the
Schedules referred to herein or the other information or documents furnished or
to be furnished to CCG or any of its representatives by Mansfield or
Stockholders expressly pursuant to the terms of this Agreement is false or
misleading in any material respect or omits to state a fact herein or therein
necessary to make the statements herein or therein not misleading in any
material respect.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF
ACQUISITION AND CCG
As an inducement to Mansfield and Stockholders to enter into this
Agreement and consummate the transactions contemplated hereby, Acquisition and
CCG jointly and severally represent and warrant to Mansfield and Stockholders as
follows:
4.1. ORGANIZATION. Each of Acquisition and CCG is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization, and has the corporate power and authority to own
or lease its properties, carry on its business, enter into this Agreement and
its obligations hereunder.
4.2. AUTHORIZATION; ENFORCEABILITY. This Agreement constitutes the legal,
valid and binding obligations of Acquisition, enforceable against it in
accordance with its terms, except as may be limited by applicable bankruptcy,
insolvency, moratorium, fraudulent transfer, preference and other laws and
equitable principles affecting the scope and enforcement to creditors' rights
generally, and are also limited by Mansfield's and Stockholders' implied
covenants of good faith, fair dealing and commercially reasonable conduct, and
by the effects of judicial discretion
11
on the availability of remedies and realization of benefits under and
enforceability of this Agreement in all respects as written. All actions
contemplated by this Agreement have been duly and validly authorized by all
necessary proceedings by Acquisition.
4.3. NO VIOLATION OF LAWS; CONSENTS. Neither the execution and delivery of
this Agreement, the consummation of the transactions contemplated hereby nor the
compliance with or fulfillment of the terms, conditions or provisions hereof by
Acquisition or CCG will: i) contravene any provision of any Governing Document
of Acquisition, or ii) violate any Law or any judgment or order of any
Governmental Body to which Acquisition is subject or by which any of its assets
may be bound or affected. Except as set forth on Schedule 4.3 and the filing of
the Instruments of Merger, no consent, approval or authorization of, or
registration or filing with, any Person is required in connection with the
execution and delivery by Acquisition of this Agreement or the consummation by
Acquisition of the transactions contemplated hereby.
4.4. NO PENDING LITIGATION OR PROCEEDINGS. No Litigation is pending or, to
the knowledge of Acquisition, threatened against or affecting Acquisition or CCG
in connection with any of the transactions contemplated by this Agreement.
4.5. FINDERS' FEES. Neither Acquisition, CCG nor any of their officers,
directors or employees has employed any broker or finder or incurred any
Liability for any brokerage fee, commission or finders' fee in connection with
any of the transactions contemplated hereby.
4.6. CCG SHARES. At Closing and upon issuance of the Deferred Merger
Consideration, the CCG Shares shall be duly authorized, validly issued and fully
paid and non-assessable.
4.7. CCG FINANCIAL STATEMENTS. CCG's historical financial statements
contained in the reports filed by it with the Securities Exchange Commission are
true and correct in all material respects.
ARTICLE V.
CERTAIN COVENANTS
5.1. CONDUCT OF BUSINESS PENDING CLOSING. From and after the date hereof
and until the Closing Date or earlier termination hereof, (i) Mansfield and
Stockholders shall use its commercially reasonable efforts to obtain the Permit;
(ii) Mansfield shall not engage in any other business or activity except
activities related to obtaining the Permit; (iii) Mansfield shall not change its
Organization Documents, merge dissolve, liquidate, issue or redeem any capital
stock, declare any dividend or engage in any other fundamental corporate
transaction; (iv) Mansfield shall give to Acquisition and to Acquisition's
employees and representatives (including accountants, actuaries, attorneys,
environmental consultants and engineers) access during normal business hours to
the Real Property.
5.2. ACQUISITION PROPOSALS. Mansfield and Stockholders shall not (nor
shall they permit any of their affiliates to) directly or indirectly, solicit,
initiate or encourage any inquiries or the making of any proposals from, engage
or participate in any negotiations or discussions with, provide any confidential
information or data to, or enter into (or authorize) any agreement
12
or agreement in principle with any person or announce any intention to do any of
the foregoing, with respect to any offer or proposal to acquire all or any part
of Mansfield's assets, properties, or Business whether by merger, purchase of
capital stock or assets or otherwise.
5.3. FULFILLMENT OF AGREEMENTS. Acquisition and Mansfield shall use
commercially reasonable efforts to cause all of those conditions to the
obligations of the other under Article VI that are not beyond its reasonable
control to be satisfied on or prior to the Closing and shall use its
commercially reasonable efforts to take, or cause to be taken, all action and to
do, or cause to be done, all things necessary, proper or advisable to consummate
and make effective the transactions contemplated by this Agreement.
5.4. PERFORMANCE OF LEASE OBLIGATIONS. From and after the Closing Date
Acquisition shall perform the obligations of the tenant under the terms of the
Lease.
5.5. TAXES; OTHER LIABILITIES. Stockholders shall be liable for filing all
Tax Returns for Mansfield with respect to any taxable period ending prior to the
Closing Date and shall be liable for all Taxes and, except as provided in
Section 2.13, all other Liabilities incurred by Mansfield prior to the Closing
Date.
5.6. COVENANT AGAINST COMPETITION AND DISCLOSURE. To accord to Acquisition
and CCG the full value of the Merger, Stockholders shall not, directly or
indirectly, (i) for a period of five years after the date hereof, directly or
indirectly, engage or become interested in (as owner, stockholder, partner or
otherwise) the operation of any movie theater within a five mile radius of the
Real Property, (ii) for a period of five years after the date hereof, directly
or indirectly, engage or become interested in (as owner, stockholder, partner or
otherwise) the operation of any movie theater within a five mile radius of any
theater owned directly or indirectly by CCG on the date immediately following
the Closing Date, or (iii) disclose to anyone, or use in competition with
Acquisition, any information with respect to any confidential or secret aspect
of the operations of Acquisition's business. It is acknowledged that
Stockholders currently operate certain movie theaters and nothing in subsection
(ii) of the previous sentence shall prohibit the Sellers from operating such
theaters. Stockholders acknowledge that the remedy at law for breach of the
provisions of this Section 5.6 will be inadequate and that, in addition to any
other remedy CCG may have, they will be entitled to an injunction restraining
any such breach or threatened breach, without any bond or other security being
required. If any court construes the covenant in this Section 5.6 or any part
thereof, to be unenforceable because of its duration or the area covered
thereby, the court shall have the power to reduce the duration or area to the
extent necessary so that such provision is enforceable.
ARTICLE VI.
CONDITIONS TO CLOSING; TERMINATION
6.1. CONDITIONS PRECEDENT TO OBLIGATION OF ACQUISITION. The obligation of
Acquisition to proceed with the Closing under this Agreement is subject to the
fulfillment prior to or at Closing of the following conditions, any one or more
of which may be waived in whole or in part by Acquisition at Acquisition's sole
option:
13
(a) BRINGDOWN OF REPRESENTATIONS AND WARRANTIES; COVENANTS. Each of the
representations and warranties of Mansfield contained in this Agreement shall be
true and correct in all material respects on and as of the Closing Date, with
the same force and effect as though such representations and warranties had been
made on, as of and with reference to the Closing Date. Mansfield shall have
performed in all respects all of the covenants and complied with all of the
provisions required by this Agreement and the Asset Purchase Agreement to be
performed or complied with by it at or before the Closing.
(b) LITIGATION. No statute, regulation or order of any Governmental Body
shall be in effect that restrains or prohibits the transactions contemplated
hereby or that would limit or adversely affect Acquisition's ability to operate
under the Lease as contemplated thereunder, and nor shall there be pending, any
action or proceeding challenging the lawfulness of or seeking to prevent or
delay any of the transactions contemplated by this Agreement or seeking monetary
or other relief by reason of the consummation of any of such transactions.
(c) NO MATERIAL ADVERSE CHANGE. Between the date hereof and the Closing
Date, there shall have been no material adverse change, regardless of insurance
coverage therefor, in the Lease or the Liabilities, prospects or condition,
financial or otherwise, of Mansfield or the theater to be constructed on the
Real Property.
(d) CLOSING CERTIFICATE. Mansfield shall have delivered a certificate,
dated the Closing Date, in the form of "Exhibit D" hereto, certifying to the
fulfillment of the conditions set forth in subparagraphs (a), (b) and (c) of
this Section. Such certificate shall constitute a representation and warranty of
Mansfield with regard to the matters therein for purposes of this Agreement.
(e) CLOSING DOCUMENTS. Acquisition shall have received the documents
referred to in Section 6.3(a). All agreements, certificates, opinions and other
documents delivered by Mansfield to Acquisition hereunder shall be in form and
substance satisfactory to Acquisition.
(f) LEASEHOLD. Acquisition shall have received from the Lessor consents to
leasehold mortgage, and estoppel certificates and from each existing mortgagee
with respect to the Real Property all consents, nondisturbance agreements, and
other documents as Mansfield may be entitled to under the terms of Lease.
(g) PERMIT. Mansfield shall have obtained the Permit.
(h) RENT. All rent due under the Lease Agreement accruing through the date
of the issuance of the Permit shall have been paid in full.
(i) PRIVATE PLACEMENT. CCG shall be satisfied in its sole discretion that
the issuance of the CCG Shares pursuant hereto are exempt from registration
under the Securities Act.
(j) LEASE AMENDMENT. The Lease shall have been amended to include terms no
less favorable than as set forth in "Exhibit H".
6.2. CONDITIONS PRECEDENT TO OBLIGATION OF MANSFIELD. The obligation of
Mansfield to proceed with the Closing under this Agreement is subject to the
fulfillment prior to or at
14
Closing of the following conditions, any one or more of which may be waived in
whole or in part by Mansfield at Mansfield's sole option:
(a) BRINGDOWN OF REPRESENTATIONS AND WARRANTIES; COVENANTS. Each of the
representations and warranties of Acquisition and CCG contained in this
Agreement shall be true and correct in all material respects on and as of the
Closing Date, with the same force and effect as though such representations and
warranties had been made on, as of and with reference to the Closing Date.
Acquisition and CCG shall have performed all of the covenants and complied in
all respects with all of the provisions required by this Agreement and the Asset
Purchase Agreement to be performed or complied with by it at or before the
Closing.
(b) LITIGATION. No statute, regulation or order of any Governmental Body
shall be in effect that restrains or prohibits the transactions contemplated
hereby, and there shall not have been threatened, nor shall there be pending,
any action or proceeding by or before any Governmental Body challenging the
lawfulness of or seeking to prevent or delay any of the transactions
contemplated by this Agreement or seeking monetary or other relief by reason of
the consummation of such transactions.
(c) CLOSING CERTIFICATE. Acquisition shall have delivered a certificate,
dated the Closing Date, in the form of "Exhibit E", certifying to the
fulfillment of the conditions set forth in subparagraphs (a) and (b) of this
Section. Such certificate shall constitute a representation and warranty of
Acquisition with regard to the matters therein for purposes of this Agreement.
(d) PERMIT. Mansfield shall have obtained the Permit.
(e) CLOSING DOCUMENTS. Mansfield shall have received the documents
referred to in Section 6.3(b). All agreements, certificates, opinions and other
documents delivered by Acquisition to Mansfield hereunder shall be in form and
substance satisfactory to Mansfield.
(f) LEASE AMENDMENT. The Lease shall have been amended to include terms no
less favorable than as set forth in "Exhibit H".
6.3. DELIVERIES AND PROCEEDINGS AT CLOSING.
(a) DELIVERIES BY MANSFIELD. Mansfield shall deliver or cause to be
delivered to Acquisition at the Closing:
i) Certificates of the appropriate public officials to the
effect that Mansfield was a validly existing corporation in good standing in its
state of incorporation as of a date not more than 30 days prior to the Closing
Date.
ii) Certificates formerly representing all the Mansfield Shares.
iii) Incumbency and specimen signature certificates dated the
Closing Date, signed by the officers of Mansfield and certified by their
respective Secretaries.
iv) True and correct copies of (A) the Governing Documents (other
than the bylaws) of Mansfield as of a date not more than 30 days prior to the
Closing Date, certified by
15
the Secretary of State of New Jersey and (B) the bylaws of Mansfield as of the
Closing Date, certified by its Secretary.
v) Certificates of the Secretary of Mansfield (A) setting forth
resolutions of the Board of Directors of Mansfield and Stockholders (qua
stockholders) of Mansfield authorizing the execution and delivery of this
Agreement and the performance by Mansfield of the transactions contemplated
hereby, and (B) to the effect that the Governing Documents of Mansfield
delivered pursuant to Section 6.3(a)(iv) were in effect at the date of adoption
of such resolutions, the date of execution of this Agreement and the Closing
Date.
vi) The Voting Trust Agreement executed by Stockholders.
vii) The Registration Rights Agreement executed by Stockholders.
viii) The minute books, stock ledgers and corporate seal of
Mansfield.
ix) The opinion of Alter Bartfeld & Mantel LLP, legal counsel to
Mansfield, in substantially the form of "Exhibit F".
x) Such other agreements and documents as Acquisition may
reasonably request.
(B) DELIVERIES BY ACQUISITION. Acquisition shall deliver or cause to be
delivered to Mansfield at the Closing:
i) Certificates of the appropriate public official to the effect
that each of Acquisition and CCG was a validly existing corporation in its state
of incorporation as of a date not more than 30 days prior to the Closing Date.
ii) Incumbency and specimen signature certificates dated the
Closing Date signed by the officers of Acquisition and CCG and certified by
their Secretaries.
iii) True and correct copies of (A) the Governing Documents (other
than the bylaws) of Acquisition as of a date not more than 30 days prior to the
Closing Date, certified by the Secretary of State of Delaware and (B) the bylaws
of Acquisition and CCG as of the Closing Date, certified by their Secretaries.
iv) Certificate of the Secretary of Acquisition (A) setting forth
resolutions of the Board of Directors of Acquisition authorizing the execution
and delivery of this Agreement and the performance by Acquisition of the
transactions contemplated hereby, certified by the Secretary of Acquisition and
(B) to the effect that the Governing Documents of Acquisition delivered pursuant
to Section 6.3(b)(iii) were in effect at the date of adoption of such
resolutions, the date of execution of this Agreement and the Closing Date.
v) The opinion of Kirkpatrick & Lockhart LLP, Acquisition's and
CCG's legal counsel, in substantially the form of "Exhibit G".
vi) Such other agreements and documents as Mansfield may reasonably
request.
16
6.4. TERMINATION. This Agreement may be terminated and the Merger
abandoned at any time prior to Closing by: (i) mutual consent of Acquisition and
Mansfield; (ii) Acquisition, if any of the conditions specified in Section 6.1
hereof shall not have been fulfilled by January 15, 1999 and shall not have been
waived by Acquisition; or (iii) Mansfield, if any of the conditions specified in
Section 6.2 hereof shall not have been fulfilled by January 15, 1999 and shall
not have been waived by Mansfield. The failure of any party hereto to satisfy
any condition to Close hereunder not within the control of such party (such as
failure to obtain the Permit) shall not be deemed a material breach by such
party. Subject to Section 2.14, any party in material breach hereof shall be
liable to the other parties for any breach which breach led to termination
hereof. Only the rights and obligations of the parties set forth in this Section
6.4 and Sections 2.14, 2.15, 5.2, 7.2, 7.3 and 8.1 shall survive a termination
of this Agreement in the event there is no Closing, and Section 5.2 shall
survive termination hereof so long as the Option remains outstanding. Any party
hereto shall also be entitled to seek any other remedy to which it may be
entitled at law or in equity in the event of such termination, which remedies
shall include injunctive relief and specific performance.
ARTICLE VII.
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
7.1. SURVIVAL OF REPRESENTATIONS. All representations, warranties and
agreements made by any party in this Agreement or pursuant hereto shall survive
the Closing, but all claims for damages made by virtue of such representations,
warranties and agreements shall be made under, and subject to the limitations
set forth in, this Article VII, except that the representation and warranty
contained in Section 4.7 shall not survive Closing.
7.2. INDEMNIFICATION BY MANSFIELD AND STOCKHOLDERS. Stockholders, jointly
and severally, and Martin Drescher severally and not jointly, shall indemnify,
defend, save and hold Acquisition and their officers, directors, employees,
agents and Affiliates (collectively, "ACQUISITION INDEMNITEES") harmless from
and against all demands, claims, allegations, assertions, actions or causes of
action, assessments, losses, damages, deficiencies, Liabilities, costs and
expenses (including reasonable legal fees, interest, penalties, and all
reasonable amounts paid in investigation, defense or settlement of any of the
foregoing) and whether or not any such demands, claims, allegations, etc., of
third parties are meritorious (collectively, "ACQUISITION DAMAGES") asserted
against, imposed upon, resulting to, required to be paid by, or incurred by
Acquisition Indemnitees, directly or indirectly, in connection with, arising out
of, that could result in, or which would not have occurred but for i) a breach
of any representation or warranty made by Mansfield or any Stockholder or Martin
Drescher in this Agreement, in any certificate or document furnished pursuant
hereto by Mansfield, and ii) a breach or nonfulfillment of any covenant or
agreement made by Mansfield or any Stockholder in or pursuant to this Agreement.
7.3. INDEMNIFICATION BY ACQUISITION. Acquisition and CCG shall indemnify,
defend, save and hold Mansfield and Stockholders and their officers, directors,
employees, Affiliates and agents (collectively, "MANSFIELD INDEMNITEES")
harmless from and against any and all demands, claims, actions or causes of
action, assessments, losses, damages, deficiencies, Liabilities, costs and
expenses (including reasonable legal fees, interest, penalties, and all
reasonable amounts paid in investigation, defense or settlement of any of the
foregoing) and whether or not any such
17
demands, claims, allegations, etc., of third parties are meritorious
(collectively, "MANSFIELD DAMAGES") asserted against, imposed upon, resulting
to, required to be paid by, or incurred by Mansfield Indemnitees, directly or
indirectly, in connection with, arising out of, that could result in, or which
would not have occurred but for i) a breach of any representation or warranty
made by Acquisition in this Agreement or in any certificate or document
furnished pursuant hereto by Acquisition, and ii) a breach or nonfulfillment of
any covenant or agreement made by Acquisition in or pursuant to this Agreement.
7.4. NOTICE OF CLAIMS. If Acquisition Indemnitee or Mansfield Indemnitee
(an "INDEMNIFIED PARTY") believes that it has suffered or incurred or will
suffer or incur Acquisition Damages or Mansfield Damages, as the case may be
("DAMAGES") for which it is entitled to indemnification under this Article VII,
such Indemnified Party shall so notify the party or parties from whom
indemnification is being claimed (the "INDEMNIFYING PARTY") with reasonable
promptness and reasonable particularity in light of the circumstances then
existing. If any action at law or suit in equity is instituted by or against a
third party with respect to which any Indemnified Party intends to claim any
Damages, such Indemnified Party shall promptly notify the Indemnifying Party of
such action or suit. The failure of an Indemnified Party to give any notice
required by this Section shall not affect any of such party's rights under this
Article VII or otherwise except and to the extent that such failure is actually
prejudicial to the rights or obligations of the Indemnified Party.
7.5. THIRD PARTY CLAIMS. The Indemnified Party shall have the right to
conduct and control, through counsel of its choosing, the defense of any third
party claim, action or suit, and the Indemnified Party may compromise or settle
the same, provided that the Indemnified Party shall give the Indemnifying Party
advance notice of any proposed compromise or settlement. The Indemnified Party
shall permit the Indemnifying Party to participate in the defense of any such
action or suit through counsel chosen by the Indemnifying Party, provided that
the fees and expenses of such counsel shall be borne by the Indemnifying Party.
If the Indemnified Party permits the Indemnifying Party to undertake, conduct
and control the conduct and settlement of such action or suit, i) the
Indemnifying Party shall not thereby permit to exist any Encumbrance upon any
asset of the Indemnified Party; ii) the Indemnifying Party shall not consent to
any settlement that does not include as an unconditional term thereof the giving
of a complete release from liability with respect to such action or suit to the
Indemnified Party; iii) the Indemnifying Party shall permit the Indemnified
Party to participate in such conduct or settlement through counsel chosen by the
Indemnified Party; and iv) the Indemnifying Party shall agree promptly to
reimburse the Indemnified Party for the full amount of any Damages including
fees and expenses of counsel for the Indemnified Party incurred after giving the
foregoing notice to the Indemnifying Party and prior to the assumption of the
conduct and control of such action or suit by the Indemnifying Party.
ARTICLE VIII.
MISCELLANEOUS
8.1. COSTS AND EXPENSES. Acquisition and CCG, on the one hand, and
Mansfield and Stockholders, on the other hand, shall each pay its respective
expenses, brokers' fees and commissions, and Stockholders shall pay all of the
pre-Closing expenses of Mansfield incurred in connection with this Agreement and
the transactions contemplated hereby,
18
including all accounting, legal and appraisal fees and settlement charges.
8.2. FURTHER ASSURANCES. Mansfield shall, at any time and from time to
time on and after the Closing Date, upon request by Acquisition and without
further consideration, take or cause to be taken such actions and execute,
acknowledge and deliver, or cause to be executed, acknowledged and delivered,
such instruments, documents, transfers, conveyances and assurances as may be
required or desirable for the better conveying, transferring, assigning,
delivering, assuring and confirming the Mansfield's assets to Acquisition.
8.3. NOTICES. All notices and other communications given or made pursuant
to this Agreement shall be in writing and shall be deemed to have been duly
given or made i) the second business day after the date of mailing, if delivered
by registered or certified mail, postage prepaid, ii) upon delivery, if sent by
hand delivery, iii) upon delivery, if sent by prepaid courier, with a record of
receipt, or iv) the next day after the date of dispatch, if sent by cable,
telegram, facsimile or telecopy (with a copy simultaneously sent by registered
or certified mail, postage prepaid, return receipt requested), to the parties at
the following addresses:
(a) if to Acquisition to CCG, to:
Clearview Cinema Group, Inc.
7 Waverly Place
Madison, NJ 07940
Telecopy: (201) 377-4303
Attention: A. Dale Mayo, President
with a required copy to:
David L. Forney, Esq.
Kirkpatrick & Lockhart LLP
1500 Oliver Building
Pittsburgh, PA 15222
Telecopy: (412) 355-6501
(b) if to Mansfield or Stockholders, to:
John Nelson
93 Hope Road
Blairstown, New Jersey 07825
with a required copy to:
Arthur S. Mantel, Esq.
Alter Bartfeld & Mantel LLP
90 Park Avenue
New York, NY 10016
Telecopy: (212) 953-5061
19
Any party hereto may change the address to which notice to it, or copies
thereof, shall be addressed, by giving notice thereof to the other parties
hereto in conformity with the foregoing.
8.4. OFFSET; ASSIGNMENT; GOVERNING LAW. Acquisition shall be entitled to
offset or recoup from any amounts due to Mansfield from Acquisition hereunder
(including in respect the Deferred Merger Consideration) against any obligation
of Mansfield to Acquisition hereunder. This Agreement and all the rights and
powers granted hereby shall bind and inure to the benefit of the parties hereto
and their respective permitted successors and assigns. This Agreement and the
rights, interests and obligations hereunder may not be assigned by any party
hereto without the prior written consent of the other parties hereto, except
that Acquisition may make such assignments to any Affiliate of Acquisition
provided that Acquisition remains liable hereunder. This Agreement shall be
governed by and construed in accordance with the laws of the State of New Jersey
except to the extent that the laws of the Delaware General Corporation Law
apply.
8.5. AMENDMENT AND WAIVER; CUMULATIVE EFFECT. To be effective, any
amendment or waiver under this Agreement must be in writing and be signed by the
party against whom enforcement of the same is sought. Neither the failure of any
party hereto to exercise any right, power or remedy provided under this
Agreement or to insist upon compliance by any other party with its obligations
hereunder, nor any custom or practice of the parties at variance with the terms
hereof shall constitute a waiver by such party of its right to exercise any such
right, power or remedy or to demand such compliance. Except as provided in
Section 6.4, the rights and remedies of the parties hereto are cumulative and
not exclusive of the rights and remedies that they otherwise might have now or
hereafter, at law, in equity, by statute or otherwise.
8.6. ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES. This Agreement and
the Schedules and Exhibits set forth all of the promises, covenants, agreements,
conditions and undertakings between the parties hereto with respect to the
subject matter hereof, and supersede all prior or contemporaneous agreements and
understandings, negotiations, inducements or conditions, express or implied,
oral or written. This Agreement is not intended to confer upon any Person other
than the parties hereto any rights or remedies hereunder, except the provisions
of Sections 7.2 and 7.3 relating to Acquisition Indemnitees and Mansfield
Indemnitees.
8.7. SEVERABILITY. If any term or other provision of this Agreement is
held by a court of competent jurisdiction to be invalid, illegal or incapable of
being enforced under any rule of Law in any particular respect or under any
particular circumstances, such term or provision shall nevertheless remain in
full force and effect in all other respects and under all other circumstances,
and all other terms, conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that the transactions contemplated hereby are fulfilled to the fullest
extent possible.
8.8. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which
together shall be deemed to be one and the same instrument.
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8.9. MARTIN DRESCHER. Martin Drescher, a stockholder of Mansfield, hereby
consents to the Merger and has voted in favor of the Merger, qua a stockholder
of Mansfield, and consents, acknowledges and agrees to the provisions of this
Agreement set forth in Article II, Article VII and Article VIII.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
CLEARVIEW CINEMA GROUP, INC.
By:/s/ A. Dale Mayo
-----------------------------------
A. Dale Mayo
Title: President
CCC MANSFIELD CINEMA CORP.
By:/s/ A. Dale Mayo
-----------------------------------
Title: President
WARREN COUNTY CINEMAS, INC.
By:/s/ John Nelson
-----------------------------------
John Nelson
Title: President
STOCKHOLDERS:
/s/ John Nelson
--------------------------------------
John Nelson
/s/ Pamela Ferman
--------------------------------------
Pamela Ferman
/s/ Seth Ferman
--------------------------------------
Seth Ferman
/s/ Martin Drescher
--------------------------------------
Martin Drescher
22
SCHEDULES
SCHEDULE 3.3 - Consents
SCHEDULE 3.4 - Undisclosed Liabilities
SCHEDULE 3.5 - Mansfield Shares
SCHEDULE 3.10 - Description of Real Property
SCHEDULE 4.3 - Consents
23
EXHIBITS
EXHIBIT A - Lease
EXHIBIT B - Form of Registration Rights Agreement
EXHIBIT C - Form of Voting Trust Agreement
EXHIBIT D - Form of Mansfield Closing Certificate
EXHIBIT E - Form of Acquisition Closing Certificate
EXHIBIT F - Form of Opinion of Alter Bartfeld & Mantel LLP
EXHIBIT G - Form of Opinion of Kirkpatrick & Lockhart LLP
EXHIBIT H - Form of Lease Amendment
[Schedules and Exhibits will be provided upon request.]
24