REGISTRATION RIGHTS AGREEMENT
Registration Rights Agreement, dated as of November 21, 1997 (the
"Agreement"), by and among Clearview Cinema Group, Inc., a Delaware corporation
(the "Company"), F&N Cinema, Inc., a New Jersey corporation, and Roxbury Cinema,
Inc., a New Jersey corporation (collectively "Seller").
The parties hereto, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound
hereby, agree as follows:
1. DEFINITIONS. The following terms have the meanings set forth in this
Section 1 unless the context clearly otherwise requires:
(a) "Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
(b) "Commission" means the Securities and Exchange Commission.
(c) "Common Stock" means the Common Stock, $.01 par value, of the
Company.
(d) "Holder" means Seller so long as Seller are holders of any
Registrable Securities and Seller's permitted successors, transferees and
assigns so long as any such successor, transferee or assignee executes and
delivers a written agreement, in form and substance satisfactory to the Company,
agreeing to be bound by the provisions of this Agreement.
(e) "Offering" means any underwritten public offering of shares of
Common Stock by the Company or any holder thereof in accordance with the
registration requirements of the Act.
(f) "Registrable Securities" means any shares of Common Stock now or
hereafter held by Seller.
(g) "Registration", "register" and like words mean compliance with
all of the laws, rules and regulations (federal, state and local), and
provisions of agreements and corporate documents pertaining to the public
offering of securities, including registration of any public offering of
securities on any form under the Act.
2. INCIDENTAL REGISTRATION. If the Company shall at any time propose for
itself or any other person the registration under the Act of any Offering (other
than any Offering in connection with any employee benefit plan or a transaction
required to be registered by means of a registration statement on Form S-4), the
Company shall give notice of such proposed registration to all Holders. Upon
receipt of such notice, each Holder may elect to participate in such Offering.
To make such election, any such Holder must give notice to the Company of such
Holder's election and the number of Registrable Securities that such Holder
wishes to sell in such Offering within fifteen (15) days of the day that the
Company gave notice of such Offering.
Subject to the provisions of the last sentence of this Section 2, the Company
shall include in such Offering such Registrable Securities and shall cause the
managing underwriter or sole underwriter of such Offering, if any, to enter into
an underwriting agreement that will have all such electing Holders as parties
thereto. The rights provided in this Section 2 are available to any Holder even
though such Holder may be free at the time to sell all of the Registrable
Securities of such Holder with respect to which registration is requested in
accordance with Rule 144 (or any similar rule or regulation) under the Act. If
the managing underwriter or sole underwriter of any Offering subject to the
provisions of this Section 2 advises the Holders participating therein in
writing that marketing factors require a limitation on the number of shares of
Common Stock to be underwritten in such Offering, then the number of shares of
Common Stock that may be included in such Offering shall be allocated as
follows: (i) all shares of Common Stock to be sold for the account of the
Company shall be included; and (ii) the remaining shares of Common Stock that
may be sold pursuant to the advice of such managing underwriter shall be
allocated among all Holders and other persons participating in such Offering in
proportion, as nearly as practicable, to the respective numbers of shares of
Common Stock held by or issuable to all such persons at the time of the filing
of the registration statement for such Offering.
3. INFORMATION TO BE FURNISHED BY HOLDERS. Each Holder participating in an
Offering pursuant to Section 2 shall furnish to the Company in writing all
information within such Holder's possession or knowledge required by the
applicable rules and regulations of the Commission and by any applicable state
securities or blue sky laws concerning such Holder, the proposed method of sale
or other disposition of the shares of Common Stock being sold by such Holder in
such Offering, and the identity of and compensation to be paid to any proposed
underwriter or underwriters to be employed in connection with such Offering.
4. COSTS AND EXPENSES. Except as provided in the last sentence of this
Section 4, the Company shall pay all costs and expenses in connection with the
registration of any Offering under this Agreement. Such costs and expenses for
any Offering, include: (a) the reasonable fees and expenses of the Company's
counsel and one special counsel selected by the Holders offering shares of
Common Stock in such Offering; (b) the fees and expenses of the Company's
accountants and auditors; (c) the costs and expenses incident to the
preparation, printing and filing of any and all documents to be filed under the
Act and any applicable state securities or blue sky laws in connection with such
Offering, each prospectus forming a part of the relevant registration statement
and all amendments thereof and supplements thereto; (d) the costs incurred in
connection with the qualification of the Offering and the shares of Common Stock
being offered in such Offering under any applicable state securities or blue sky
laws (including any related fees and disbursements); (e) the cost of listing the
shares of Common Stock being offered in such Offering on any exchange; (f) the
cost of furnishing to each Holder such copies as such Holder shall reasonably
request of the relevant registration statement, each preliminary prospectus and
the final prospectus forming part of such registration statement and each
amendment thereof or supplement thereto; and (g) all expenses incident to
delivery of the shares of Common Stock being offered in such Offering to any
underwriter or underwriters. Notwithstanding anything to the contrary set forth
herein, the Company shall not be obligated to pay (i) the commissions or
discounts payable to any underwriter for any shares of Common Stock sold by any
Holder or (ii) any costs or expenses incurred in connection with any
registration statement referred to in Section 2 which any other person on whose
behalf such registration statement is being filed has agreed to pay.
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5. INDEMNIFICATION BY COMPANY. The Company shall, to the maximum extent
permitted by law, indemnify and hold harmless each Holder participating in any
Offering pursuant to this Agreement, any underwriter for such Holder and each
person, if any, who controls (as defined in the Act) such Holder or such
underwriter against any losses, claims, damages, liabilities, judgments,
settlements, awards and expenses (including attorneys' fees) (each a "Loss" and
collectively "Losses") to which such Holder or underwriter or controlling person
may become subject under the Act or otherwise, insofar as such Losses are caused
by, based upon, arise out of, or relate to, any untrue statement or alleged
untrue statement of any material fact contained in the registration statement
for such Offering, any prospectus contained therein, or any amendment thereof or
supplement thereto, or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that the Company shall not be liable
in any such case to the extent that any such Loss is caused by, is based upon,
arises out of, or relates to, an untrue statement or alleged untrue statement or
omission or alleged omission made in conformity with written information
furnished by such Holder or underwriter specifically for use in preparation of
such registration statement, prospectus, amendment or supplement or if, in
respect to such statement, alleged statement, omission or alleged omission, the
final prospectus for such registration statement corrected such statement,
alleged statement, omission or alleged omission and a copy of such final
prospectus was not sent or given by or on behalf of such Holder at or prior to
the confirmation of the sale of shares of Common Stock of such Holder with
respect to which such Loss relates. The Company shall reimburse each such
Holder, underwriter or controlling person for any legal or other expenses
incurred by such Holder, underwriter or controlling person in connection with
investigating or defending against any such Loss as incurred if such Holder,
underwriter or controlling person has provided to the Company an undertaking to
repay such reimbursed expenses if it is determined that such Holder, underwriter
or controlling person was not entitled to indemnification hereunder.
6. INDEMNIFICATION BY HOLDER. Each Holder participating in any Offering
pursuant to this Agreement shall, to the maximum extent permitted by law,
indemnify and hold harmless the Company, each of its directors, each of its
officers who has signed the applicable registration statement and each person,
if any, who controls the Company against any Losses to which the Company or any
such director, officer or controlling person may become subject under the Act or
otherwise, insofar as such Losses are caused by, based upon, arise out of, or
relate to, (a) any untrue or alleged untrue statement of any material fact
contained in the registration statement for such Offering, any prospectus
contained therein, or any amendment thereof or supplement thereto, or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such Losses are caused by,
based upon, arise out of, or relate to, an untrue statement or alleged untrue
statement or omission or alleged omission made in conformity with written
information furnished by such Holder specifically for use in preparation of such
registration statement, prospectus, amendment or supplement; or (b) any untrue
statement or alleged untrue statement or omission or alleged omission made in
any preliminary prospectus for such registration statement if, in respect to
such statement, alleged statement, omission or alleged omission, the final
prospectus for such registration statement corrected such statement, alleged
statement, omission or alleged omission and a copy of such final prospectus was
not sent or given by or on behalf of such Holder at or prior to the confirmation
of the sale of shares of Common Stock of such Holder with respect to which such
Loss relates. Each Holder's obligation under
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this Section 7 shall be several and not joint and in no event shall exceed the
net proceeds received by such Holder in the Offering to which the applicable
Loss relates.
7. NOTICE TO INDEMNITOR. Promptly after receipt by any indemnified party
of notice of the commencement of any action which may involve an indemnifiable
Loss, such indemnified party shall, if a claim is to be made against an
indemnifying party with respect to such Loss pursuant hereto, notify such
indemnifying party of the commencement thereof; but the failure to so notify
such indemnifying party shall not relieve it from any liability that it may have
to such indemnified party hereunder unless such indemnifying party shall have
been actually and materially prejudiced by such failure. In case any such action
is brought against any indemnified party and it notifies an indemnifying party
of the commencement thereof, and such indemnifying party, without acknowledging
any validity of the underlying claim, acknowledges that it may be obligated to
indemnify such indemnified party therefor, such indemnifying party shall be
entitled to participate in, and, to the extent that it may wish, jointly with
any other indemnifying party similarly notified, to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified party, but may not
settle such action without the consent of such indemnified party, which consent
shall not be unreasonably withheld, unless such settlement involves no payment
by such indemnified party, no equitable relief against such indemnified party
and a complete release of all claims against such indemnified party. If an
indemnifying party undertakes the defense of any matter for which indemnity is
claimed under this Agreement, and if the relevant indemnified party wishes
nevertheless to retain counsel to represent it in such matter, the fees of such
counsel shall be the responsibility solely of the party retaining such counsel
unless such indemnified party and such indemnifying party have conflicting or
separate defenses in such action, in which case the attorneys' fees of such
indemnified party will be borne by such indemnifying party.
8. ADDITIONAL OBLIGATIONS. If, in order to effect any Offering in
accordance with this Agreement, such Offering or the shares of Common Stock
being offered in such Offering require a declaration of, registration with, or
approval of, any federal or state governmental official or authority (other than
registration under the Act or qualification or registration under state
securities or blue sky laws) before such shares of Common Stock may be sold, the
Company at its own expense shall take all reasonable actions in connection with
such registration, declaration or approval and will use its reasonable best
efforts to cause such shares of Common Stock to be duly registered or approved
as may be required; provided, however, that in connection therewith or as a
condition thereof, the Company may not be required to execute a general consent
to service or to qualify to do business in any jurisdiction. The foregoing shall
not be applicable to any regulatory requirements applicable solely to any Holder
wishing to participate in any such Offering.
9. RULE 144 COVENANTS. With a view to making available to each Holder the
benefits of Rule 144 under the Act (which term as used in this Section 9
includes the present Rule 144 and any other, additional, substitute,
supplemental or analogous rule or regulation of the Commission that may at any
time permit a Holder to sell Registrable Securities to the public without
compliance with the registration requirements of the Act), the Company (a) shall
maintain registration of the Common Stock under Section 12 or 15(d) of the
Securities Exchange Act of 1934, as amended; (b) shall file with the Commission
in a timely manner all reports and other documents required to be filed by an
issuer of securities registered under the Securities Exchange Act of 1934, as
amended, so as to maintain the availability of Rule 144 to the Holders; (c) at
its expense, forthwith upon any Holder's request, shall deliver to such Holder a
certificate, signed by
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one of the Company's principal officers, stating (i) the Company's name, address
and telephone number (including area code); (ii) the Company's I.R.S. taxpayer
identification number; (iii) the Company's Commission file number; (iv) the
number of shares of Common Stock outstanding as shown by the most recent report
or statement published by the Company or filed by the Company with the
Commission; and (v) that the Company has filed the reports required to be filed
under the Securities Exchange Act of 1934, as amended, for a period of at least
90 days prior to the date of such certificate and in addition has filed the most
recent annual report required to be filed thereunder and such other or
additional information as shall be necessary to make available to such Holder
the ability to offer and sell the maximum number of shares of Common Stock under
Rule 144; and (d) when Rule 144 is being complied with, shall deliver securities
not bearing any legend restricting transfer of such securities, as requested
from time to time by any Holder subject to this Agreement.
10. NOTICES. All notices and other communications provided for hereunder
must be in writing and shall be deemed to have been given on the same day when
personally delivered or sent by confirmed facsimile transmission or on the next
business day when delivered by receipted courier service or on the third
business day when mailed with sufficient postage, registered or certified mail,
return receipt requested, to the following addresses:
(a) if to the Company: Clearview Cinema Group, Inc., 7 Waverly
Place, Madison, New Jersey 07940, Telecopy No. (201) 377-4303, marked
"Attention: President," with a copy to: Kirkpatrick & Lockhart LLP, 1251 Avenue
of the Americas, New York, New York 10020, Attention: David L. Forney, Esq.;
(b) if to Seller: c/o Ferman & Nelson, 21 Sunset Strip, P.O. Box
648, Succasunna, New Jersey 07876, marked "Attention: John Nelson," with a copy
to: Alter Bartfeld & Mantel LLP, 90 Park Avenue, New York, New York 10016,
marked "Attention: Arthur S. Mantel, Esq."
or to such other address as any party shall have furnished to the other parties
pursuant to this Section 10. Failure to send a copy of a notice to any attorney
shall not vitiate any notice sent to a party.
11. ENTIRE AGREEMENT; MODIFICATION OF AGREEMENT; CONSENTS. This Agreement
constitutes the entire agreement among the parties hereto with respect to the
subject matter hereof. Changes in or additions to this Agreement may be made
and/or compliance with any covenant or condition herein set forth may be omitted
only upon written consent of all the parties hereto; provided, however, that any
agreement by any person to become a party to this Agreement because such person
has acquired shares of Common Stock from Seller only needs to be executed by
such person and the Company to be binding upon all of the parties hereto.
12. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective permitted
successors, transferees and assigns. For purposes of this Agreement, any person
who is a successor to or assignee of any party hereto by operation of law,
including by means of a merger, consolidation or share exchange or by the laws
of intestacy or inheritance or pursuant to a will (but only if such person is
the administrator or executor of the applicable estate) and excluding any person
who receives a distribution of shares of Common Stock as an heir, upon
dissolution or liquidation (whether full or partial), as a
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dividend on or a redemption (whether full or partial) of such person's interest
in such party or by any other means, shall be deemed to be a permitted successor
or assignee hereunder upon execution of an agreement to become a party hereto.
Any person who receives a distribution of shares of Common Stock from any party
hereto by any other means or for any other reason shall only be permitted to
become a party hereto if (a) such person, after such distribution, beneficially
owns at least five percent of the then outstanding shares of Common Stock, on a
fully diluted basis, or (b) such person is an affiliate of the Company (as
defined in Rule 144 under the Act), and such person executes an agreement to
become a party hereto.
13. GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with the laws of the State of Delaware without regard to any of its
principles of conflicts of law.
14. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same agreement.
15. TERM. This Agreement shall remain in full force and effect until the
earliest to occur of (a) the liquidation or dissolution of the Company, (b) the
sale of all or substantially all of the assets of the Company, and (c) the tenth
anniversary of the date hereof.
16. CONSTRUCTION.
(a) The descriptive headings of this Agreement are for convenience
only and shall not control or affect the meaning or construction of any
provision of this Agreement.
(b) As used in this Agreement, the term "person" means any
individual, corporation, partnership, joint venture, trust, limited liability
company, governmental authority or other entity.
(c) The invalidity or unenforceability of any particular provision
of this Agreement in any jurisdiction shall not affect the other provisions
hereof or such provision in other jurisdictions, and this Agreement shall be
construed in such jurisdiction in all respects as if such invalid or
unenforceable provision were omitted. Furthermore, in lieu of such illegal,
invalid, or unenforceable provision in such jurisdiction there shall be added
automatically as a part of this Agreement a provision as similar in terms to
such illegal, invalid or unenforceable provision as may be possible and be
legal, valid and enforceable.
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IN WITNESS WHEREOF, the parties hereto have caused this Registration
Rights Agreement to be duly executed as of the date first set forth above.
CLEARVIEW CINEMA GROUP, INC.
By: /s/ A. Dale Mayo
------------------------------------
A. Dale Mayo
President
F&N CINEMA, INC.
By: /s/ John Nelson
------------------------------------
John Nelson
President
ROXBURY CINEMA, INC.
By: /s/ John Nelson
------------------------------------
John Nelson
President
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