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): December 12, 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: (973) 377-4646
Item 2. Acquisition or Disposition of Assets.
On December 12, 1997, Clearview Cinema Group, Inc. (the "Company"),
together with its wholly-owned subsidiaries CCC Bellevue Cinema Corp., CCC Cedar
Grove Cinema Corp., CCC Kin Mall Cinemas, Inc. and CCC Middlebrook Cinema Corp.
(each referred to herein as a "Subsidiary" and collectively as the
"Subsidiaries"), purchased from The New Bellevue Theater Corp., C.J.M.
Enterprises, Inc., Kin Mall Cinemas, Inc. and Middlebrook Galleria Cinemas, Inc.
(each referred to herein as a "Seller" and collectively as the "Sellers") and
Jesse Sayegh ("Mr. Sayegh"), the sole shareholder of each of the Sellers,
certain assets comprising the operations of four multi-plex theaters (the "CJM
Theaters") with a total of 27 screens located in Essex County, Morris County,
and Monmouth County, New Jersey. The purchase of the CJM Theaters was effected
pursuant to an agreement and plan of reorganization and three asset purchase
agreements. The aggregate purchase price for each of the CJM Theaters was
determined by arm's length negotiations between the Sellers, Mr. Sayegh and the
Company. The Company intends to continue to use the purchased assets in the
operation of multi-plex theaters.
Pursuant to an Agreement and Plan of Reorganization dated as of November
14, 1997 (the "Agreement and Plan of Reorganization") among the Company, CCC
Bellevue Cinema Corp. as the Subsidiary, The New Bellevue Theater Corp. as the
Seller and Mr. Sayegh, (i) the Seller transferred to the Subsidiary certain
furniture, fixtures, equipment and personal property related to the operation of
a four-screen theater located in Upper Montclair, New Jersey and (ii) Mr. Sayegh
granted to the Subsidiary a leasehold interest in the real property (the
"Bellevue Lease") on which that theater is located. In exchange for the assets
transferred, the Company delivered to the Seller 62,500 shares of its Common
Stock, $.01 par value (the "Common Stock"), which represented the number of
shares with an average market value of $750,000 calculated on the last trading
day immediately prior to the date of closing. The parties agreed on that date
that the price per share was $12. The Agreement and Plan of Reorganization and
the Bellevue Lease are attached hereto as Exhibit 2.01 and Exhibit 10.01,
respectively, and are incorporated by reference herein in their entirety.
In connection with the closing of the Agreement and Plan of
Reorganization, the Seller and Mr. Sayegh entered into a Voting Trust Agreement
and a Registration Rights Agreement, each dated as of December 12, 1997,
relating to the shares of Common Stock issued to the Seller as consideration
under the Agreement and Plan of Reorganization. Pursuant to the Voting Trust
Agreement with A. Dale Mayo, the Chairman, President and Chief Executive Officer
of the Company, acting as Trustee (the "Trustee "), 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 Seller. A copy of the Voting Trust
Agreement is attached hereto as Exhibit 9.01 and is incorporated by reference
herein in its entirety.
Under the Registration Rights Agreement, the Company granted the Seller
and Mr. Sayegh incidental registration rights to participate and sell the shares
of the Common Stock received by the Seller pursuant to the Agreement and Plan of
Reorganization 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 10.02 and is
incorporated by reference herein in its entirety.
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Pursuant to an Asset Purchase Agreement dated as of November 14, 1997
among the Company, CCC Cedar Grove Cinema Corp. as the Subsidiary, C.J.M.
Enterprises, Inc. as the Seller and Mr. Sayegh, as amended by Amendment No. 1 to
Asset Purchase Agreement dated as of December 12, 1997 (together, the "Cedar
Grove Agreement"), the Subsidiary purchased a leasehold interest and certain
furniture, fixtures, equipment and personal property related to the operation of
a five-screen theater located in Cedar Grove, New Jersey, and assumed certain
liabilities relating to the lease of that theater pursuant to an Assignment and
Assumption and Consent to Assignment of Lease dated December 12, 1997 (the
"Cedar Grove Lease"). The Cedar Grove Agreement and the Cedar Grove Lease are
attached hereto as Exhibit 2.02 and Exhibit 10.03, respectively, and are
incorporated by reference herein in their entirety.
The aggregate purchase price payable under the Cedar Grove Agreement was
$3.25 million and was paid in consideration consisting of: (i) $3.04 million in
cash and (ii) the right to receive, under certain circumstances, 210 shares of
Class B Nonvoting Cumulative Reedemable Preferred Stock (the "Class B Preferred
Stock") of the Company by March 31, 1998. If prior to March 31, 1998, the
Company consummates the issuance of certain debt securities to institutional
investors with an aggregate offering price of at least $70 million, then in lieu
of issuing the shares of Class B Preferred Stock, the Company will pay the
Seller $210,000 in cash plus interest accrued thereon at the annual rate of 10
1/2%.
Pursuant to an Asset Purchase Agreement dated as of November 14, 1997
among the Company, CCC Kin Mall Cinema Corp. as the Subsidiary, Kin Mall
Cinemas, Inc. as the Seller, C.J.M. Enterprises, Inc. and Mr. Sayegh, as amended
by Amendment No. 1 to Asset Purchase Agreement dated as of December 12, 1997
(together, the "Kin Mall Agreement"), the Subsidiary purchased a leasehold
interest and certain furniture, fixtures, equipment and personal property
related to the operation of an eight-screen theater located in Kinnelon, New
Jersey and assumed certain liabilities relating to the lease of that theater
pursuant to an Assignment and Assumption and Consent to Assignment of Lease
dated December 12, 1997 (the "Kin Mall Lease"). The Kin Mall Agreement and the
Kin Mall Lease are attached hereto as Exhibit 2.03 and Exhibit 10.04,
respectively, and are incorporated by reference herein in their entirety.
The aggregate purchase price payable under the Kin Mall Agreement was
$3.25 million and was paid in consideration consisting of: (i) $2.5 million in
cash and (ii) the right to receive, under certain circumstances, 750 shares of
Class B Preferred Stock by December 12, 1999. If the Company consummates the
issuance of certain debt securities to institutional investors with an aggregate
offering price of at least $70 million, then in lieu of issuing the shares of
Class B Preferred Stock, the Company will pay the Seller $750,000 in cash plus
interest accrued thereon at the annual rate of 10 1/2%. However, the right to
receive either the 750 shares of Class B Preferred Stock or the $750,000 in cash
will be terminated if prior to December 12, 1999 all material governmental
approvals to construct a new theater complex in a specified location have been
obtained.
Pursuant to an Asset Purchase Agreement dated as of November 14, 1997
among the Company, CCC Middlebrook Cinema Corp. as the Subsidiary, Middlebrook
Galleria Cinemas, Inc. as the Seller and Mr. Sayegh, as amended by Amendment No.
1 to Asset Purchase Agreement dated as of December 12, 1997 (together, the
"Middlebrook Agreement"), the
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Subsidiary purchased a leasehold interest and certain furniture, fixtures,
equipment and personal property related to the operation of a five-screen
theater located in Ocean Township, New Jersey and assumed certain liabilities
relating to the lease of that theater pursuant to an Assignment and Assumption
and Consent to Assignment of Lease dated December 12, 1997 (the "Middlebrook
Lease"). The Middlebrook Agreement and the Middlebrook Lease are attached hereto
as Exhibit 2.04 and Exhibit 10.05, respectively, and are incorporated by
reference herein in their entirety.
The aggregate purchase price payable under the Middlebrook Agreement was
$2.25 million and was paid in consideration consisting of: (i) $1.71 million in
cash and (ii) the right to receive, under certain circumstances, 540 shares of
Class B Preferred Stock by March 31, 1998. If prior to March 31, 1998, the
Company consummates the issuance of certain debt securities to institutional
investors with an aggregate offering price of at least $70 million, then in lieu
of issuing the shares of Class B Preferred Stock, the Company will pay the
Seller $540,000 plus interest accrued thereon at the annual rate of 10 1/2%.
Pursuant to each of the Cedar Grove Agreement, Kin Mall Agreement and
Middlebrook Agreement, Mr. Sayegh granted to the Company for a period of three
years a right of first refusal to purchase any movie theater property proposed
to be sold by Mr. Sayegh. Such right of first refusal expires on December 12,
2000.
The Company and the Subsidiaries paid the cash consideration for the CJM
Theaters from funds borrowed by the Company and its wholly-owned subsidiaries
pursuant to an Amended and Restated Credit Agreement dated as of September 12,
1997 (the "Credit Agreement"), as amended by the First Amendment to the Amended
and Restated Credit Agreement dated as of December 12, 1997 (the "First
Amendment"). The First Amendment increased the Company's credit facility from
$30 million to $36 million and provided for the participation by The Bank of New
York in the credit facility for an aggregate amount of $10 million. The Credit
Agreement was previously filed as Exhibit 10.01 to the Company's quarterly
report on Form 10-QSB for the quarter ended June 30, 1997 filed on September 26,
1997 and is incorporated by reference herein in its entirety. The First
Amendment is attached hereto as Exhibit 10.07 and incorporated by reference
herein in its entirety.
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.
(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.
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(c) Exhibits.
2.01 Agreement and Plan of Reorganization dated as of November 14,
1997 by and among the Clearview Cinema Group, Inc., CCC
Bellevue Cinema Corp., The New Bellevue Theater Corp. and
Jesse Sayegh.
2.02 Asset Purchase Agreement dated as of November 14, 1997 by and
among Clearview Cinema Group, Inc., CCC Cedar Grove Cinema
Corp., C.J.M. Enterprises, Inc. and Jesse Sayegh, as amended
by Amendment No. 1 to Asset Purchase Agreement dated as of
December 12, 1997.
2.03 Asset Purchase Agreement dated as of November 14, 1997 by and
among Clearview Cinema Group, Inc., CCC Kin Mall Cinema Corp.,
Kin Mall Cinemas, Inc., C.J.M. Enterprises, Inc. and Jesse
Sayegh, as amended by Amendment No. 1 to Asset Purchase
Agreement dated as of December 12, 1997.
2.04 Asset Purchase Agreement dated as of November 14, 1997 by and
among Clearview Cinema Group, Inc., CCC Middlebrook Cinema
Corp., Middlebrook Galleria Cinemas, Inc. and Jesse Sayegh, as
amended by Amendment No. 1 to Asset Purchase Agreement dated
as of December 12, 1997.
9.01 Voting Trust Agreement dated as of December 12, 1997 by and
among The New Bellevue Theater Corp., Jesse Sayegh and A. Dale
Mayo, as Trustee.
10.01 Lease dated December 1997 between Jesse Y. Sayegh and CCC
Bellevue Cinema Corp. together with Rider to Lease, as amended
by Rider Attachment to Lease dated December 12, 1997.
10.02 Registration Rights Agreement dated as of December 12, 1997 by
and among Clearview Cinema Group , Inc., The New Bellevue
Theater Corp. and Jesse Sayegh.
10.03 Assignment and Assumption and Consent to Assignment of Lease
dated December 12, 1997 by and among Jesse Sayegh, CCC Cedar
Grove Cinema Corp., Clearview Cinema Group, Inc. and Leonard
Diener Investment Company, assigning that certain Lease
Agreement by and between Beatrice Diener d/b/a/ Leonard
Diener Investment Company and Jessee Sayegh dated May 29,
1990, as amended by letter dated March 26, 1997.
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10.04 Assignment and Assumption and Consent to Assignment of Lease
dated December 12, 1997 by and among Jesse Sayegh, CCC Kin
Mall Cinema Corp., Clearview Cinema Group, Inc. and C.J.M.
Enterprises, Inc., assigning that certain Lease by and between
Lester M. Entin Associates and C.J.M. Enterprises, Inc. dated
December 17, 1991, as amended by First Amendment to lease
dated December 31, 1996.
10.05 Assignment and Assumption and Consent to Assignment of Lease
dated December 12, 1997 by and among Jesse Sayegh, CCC
Middlebrook Cinema Corp., Clearview Cinema Group, Inc.,
Westwood Oaks, Inc. and Westwood Oaks Associates, assigning
that certain Lease by and between Westwood Oaks, Inc. and
Jesse Sayegh dated September 28, 1993, together with Rider LC
to Lease.
10.06 Amended and Restated Credit Agreement dated as of September
12, 1997 by and among Clearview Cinema Group, Inc., its
wholly-owned subsidiaries and The Provident Bank.
10.07 First Amendment to Amended and Restated Credit Agreement dated
as of December 12, 1997 by and among Clearview Cinema Group,
Inc., et al. and The Provident Bank.
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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 22, 1997
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Exhibit Index
SEQUENTIAL
EXHIBIT NO. DOCUMENT PAGE NO.
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2.01 Agreement and Plan of Reorganization dated as of November 14, 1997
by and among the Clearview Cinema Group, Inc., CCC Bellevue Cinema
Corp., The New Bellevue Theater Corp. and Jesse Sayegh.
2.02 Asset Purchase Agreement dated as of November 14, 1997 by and
among Clearview Cinema Group, Inc., CCC Cedar Grove Cinema Corp.,
C.J.M. Enterprises, Inc. and Jesse Sayegh, as amended by Amendment
No. 1 to Asset Purchase Agreement dated as of December 12, 1997.
2.03 Asset Purchase Agreement dated as of November 14, 1997 by and
among Clearview Cinema Group, Inc., CCC Kin Mall Cinema Corp., Kin
Mall Cinemas, Inc., C.J.M. Enterprises, Inc. and Jesse Sayegh, as
amended by Amendment No. 1 to Asset Purchase Agreement dated as of
December 12, 1997.
2.04 Asset Purchase Agreement dated as of November 14, 1997 by and
among Clearview Cinema Group, Inc., CCC Middlebrook Cinema Corp.,
Middlebrook Galleria Cinemas, Inc. and Jesse Sayegh, as amended by
Amendment No. 1 to Asset Purchase Agreement dated as of December
12, 1997.
9.01 Voting Trust Agreement dated as of December 12, 1997 by and among
The New Bellevue Theater Corp., Jesse Sayegh and A. Dale Mayo, as
Trustee.
10.01 Lease dated December 1997 between Jesse Y. Sayegh and CCC Bellevue
Cinema Corp. together with Rider to Lease, as amended by Rider
Attachment to Lease dated December 12, 1997.
10.02 Registration Rights Agreement dated as of December 12, 1997 by and
among Clearview Cinema Group, Inc., The New Bellevue Theater Corp.
and Jesse Sayegh.
10.03 Assignment and Assumption and Consent to Assignment of Lease dated
December 12, 1997 by and among Jesse Sayegh, CCC Cedar Grove
Cinema Corp., Clearview Cinema Group, Inc. and Leonard Diener
Investment Company, assigning that certain Lease Agreement by and
between Beatrice Diener d/b/a/
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Leonard Diener Investment Company and Jessee Sayegh dated May
29, 1990, as amended by letter dated March 26, 1997.
10.04 Assignment and Assumption and Consent to Assignment of Lease dated
December 12, 1997 by and among Jesse Sayegh, CCC Kin Mall Cinema
Corp., Clearview Cinema Group, Inc. and C.J.M. Enterprises, Inc.,
assigning that
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certain Lease by and between Lester M. Entin Associates and C.J.M.
Enterprises, Inc. dated December 17, 1991, as amended by First
Amendment to lease dated December 31, 1996.
10.05 Assignment and Assumption and Consent to Assignment of Lease dated
December 12, 1997 by and among Jesse Sayegh, CCC Middlebrook
Cinema Corp., Clearview Cinema Group, Inc., Westwood Oaks, Inc.
and Westwood Oaks Associates, assigning that certain Lease by and
between Westwood Oaks, Inc. and Jesse Sayegh dated September 28,
1993, together with Rider LC to Lease.
10.06 Amended and Restated Credit Agreement, by and among Clearview Incorporated by reference
Cinema Group, Inc., its wholly-owned subsidiaries and The from Exhibit 10.01 to the
Provident Bank, dated September 12, 1997. Form 10-QSB for the
Quarter ended June 30,
1997 filed on September
26, 1997.
10.07 First Amendment to Amended and Restated Credit Agreement dated as
of December 12, 1997 by and among Clearview Cinema Group, Inc., et
al. and The Provident Bank.
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