Agreement and Plan of Reorganization
Dated as of November 14, 1997
Among
Xxxxx Xxxxxx
The New Bellevue Theater Corp.
CCC Bellevue Cinema Corp.
and
Clearview Cinema Group, Inc.
ARTICLE I. DEFINITIONS; CONSTRUCTION........................................1
1.1. DEFINITIONS...........................................................1
1.2. CONSTRUCTION..........................................................5
ARTICLE II. THE TRANSACTION..................................................5
2.1. EXCHANGE OF ASSETS....................................................5
2.2. CASH..................................................................6
2.3. RETAINED ASSETS......................................................6
2.4. [NOT USED]...........................................................6
2.5. RETAINED LIABILITIES..................................................6
2.6. EXCHANGE OF STOCK FOR ASSETS..........................................6
2.7. CLOSING...............................................................7
2.8. TITLE.................................................................7
2.9. CERTAIN CONSENTS......................................................7
2.10. CCG SHARES...........................................................7
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF TRANSFEROR....................8
3.1. ORGANIZATION..........................................................8
3.2. AUTHORIZATION; ENFORCEABILITY.........................................8
3.3. NO VIOLATION OF LAWS OR AGREEMENTS; CONSENTS..........................8
3.4. CINEMA INCOME STATEMENTS..............................................9
3.5. NO CHANGES............................................................9
3.6. TAXES.................................................................9
3.7. UNDISCLOSED LIABILITIES..............................................10
3.8. CONDITION OF ASSETS; TITLE; BUSINESS.................................10
3.9. NO PENDING LITIGATION OR PROCEEDINGS.................................10
3.10. CONTRACTS...........................................................10
3.11. PERMITS; COMPLIANCE WITH LAW........................................10
3.12. LEASED REAL ESTATE..................................................11
3.13. LABOR RELATIONS.....................................................11
3.14. INSURANCE...........................................................11
3.15. INTELLECTUAL PROPERTY RIGHTS........................................11
3.16. EMPLOYEE BENEFITS...................................................12
3.17. ENVIRONMENTAL MATTERS...............................................12
3.18. ADDITIONAL THEATERS.................................................13
3.19. SECURITIES MATTERS..................................................13
3.20. FINDERS' FEES.......................................................14
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF TRANSFEREE....................14
4.1. ORGANIZATION.........................................................14
4.2. AUTHORIZATION AND ENFORCEABILITY.....................................14
4.3. NO VIOLATION OF LAWS; CONSENTS.......................................14
4.4. NO PENDING LITIGATION OR PROCEEDINGS.................................15
4.5. FINDERS' FEES........................................................15
4.6. STOCK OWNERSHIP......................................................15
4.7. CCG SHARES...........................................................15
ARTICLE V. CERTAIN COVENANTS................................................15
5.1. CONDUCT OF BUSINESS PENDING CLOSING..................................15
5.2. FULFILLMENT OF AGREEMENTS............................................16
5.3. EMPLOYMENT, SEVERANCE AND TERMINATION PAYMENTS.......................16
5.4. TRANSFEROR'S EMPLOYEES...............................................16
5.5. WORKERS' COMPENSATION AND DISABILITY CLAIMS..........................16
5.6. COVENANT NOT TO COMPETE..............................................17
5.7. PUBLICITY............................................................17
5.8. TRANSITIONAL MATTERS.................................................18
5.9. BOOKS AND RECORDS....................................................18
5.10. PERMITS; N.J. ISRA..................................................18
ARTICLE VI. CONDITIONS TO CLOSING; TERMINATION..............................18
6.1. CONDITIONS PRECEDENT TO OBLIGATION OF TRANSFEREE.....................18
6.2. CONDITIONS PRECEDENT TO OBLIGATION OF TRANSFEROR AND XX. XXXXXX......20
6.3. DELIVERIES AND PROCEEDINGS AT CLOSING................................21
6.4. TERMINATION..........................................................22
ARTICLE VII. SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION...................23
7.1. SURVIVAL OF REPRESENTATIONS..........................................23
7.2. INDEMNIFICATION BY TRANSFEROR AND XX. XXXXXX.........................23
7.3. INDEMNIFICATION BY TRANSFEREE........................................24
7.4. WAIVER OF STATUTE OF LIMITATIONS.....................................24
7.5. NOTICE OF CLAIMS.....................................................24
7.6. THIRD PARTY CLAIMS...................................................24
7.7. LIMITATION ON INDEMNIFICATION........................................25
7.8. PAYMENT..............................................................25
ARTICLE VIII. MISCELLANEOUS.................................................25
8.1. COSTS AND EXPENSES...................................................25
8.2. PRORATION OF EXPENSES................................................25
8.3. BULK SALES...........................................................25
8.4. FURTHER ASSURANCES...................................................25
8.5. NOTICES..............................................................26
8.6. CURRENCY.............................................................26
8.7. OFFSET; ASSIGNMENT; GOVERNING LAW....................................27
8.8. AMENDMENT AND WAIVER; CUMULATIVE EFFECT..............................27
8.9. ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES.......................27
8.10. THIRD PARTY BENEFICIARY.............................................27
8.11. SEVERABILITY........................................................27
8.12. COUNTERPARTS........................................................28
Agreement and Plan of Reorganization
("Agreement"), dated as of November 14, 1997, by
and among Xxxxx Xxxxxx, an individual residing in
_________, New Jersey ("Xx. Xxxxxx"), The New
Bellevue Theater Corp., a New Jersey corporation
("Transferor"), CCC Bellevue Cinema Corp., a
Delaware corporation ("Transferee"), and Clearview
Cinema Group, Inc., a Delaware corporation
("CCG").
Transferor currently owns and operates a four-screen movie cinema located
in Montclair, New Jersey (the "Cinema"). Transferee is a wholly owned subsidiary
of CCG.
Xx. Xxxxxx proposes to lease to Transferee the real estate on which the
Cinema is located, pursuant to the Lease Agreement attached as EXHIBIT A hereto.
For federal income tax purposes, it is intended that this transaction
shall qualify as a reorganization pursuant to Section 368 of the Internal
Revenue Code of 1986, as amended.
In consideration of the representations, warranties, covenants and
agreements contained herein, Transferor, Transferee, Xx. Xxxxxx and CCG, 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 1.1. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP.
"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 and Plan of Reorganization, as it may be
amended from time to time.
"Basket Amount" has the meaning given that term in SECTION 7.7.
"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, whether or not funded and whether
or not terminated, (i) maintained or sponsored by Transferor, or (ii) with
respect to which Transferor has or may have Liability or is obligated to
contribute, or (iii) that otherwise covers any of the current or former
employees of
Transferor or their beneficiaries, or (iv) as to which any such current or
former employees of Transferor or their beneficiaries participated or were
entitled to participate or accrue or have accrued any rights thereunder.
"Business" means the operation of the Cinema.
"Transferee" has the meaning given that term in the heading of this
Agreement.
"Transferee Damages" has the meaning given that term in SECTION 7.2.
"Transferee Indemnitees" has the meaning given that term in SECTION 7.2.
"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
Transferee to Transferor pursuant to this Agreement.
"CERCLIS" means the United States Comprehensive Environmental Response
Compensation Liability Information System List pursuant to Superfund.
"Cinema" has the meaning given that term in the first introductory
paragraph of this Agreement.
"Closing" has the meaning given that term in SECTION 2.7.
"Closing Date" has the meaning given that term in SECTION 2.7.
"Code" means the United States Internal Revenue Code of 1986, as amended,
and the applicable rulings and regulations thereunder.
"Damages" means Transferee Damages or Transferor Damages, as the case may
be.
"Deposit" has the meaning given that term in SECTION 2.6.
"Encumbrance" means any liability, debt, mortgage, deed of trust, pledge,
security interest, encumbrance, option, right of first refusal, agreement of
sale, adverse claim, easement, lien, assessment, restrictive covenant,
encroachment, 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 United States Employee Retirement Income Security Act of
1974, as amended, and the applicable rulings and regulations thereunder.
"GAAP" means United States generally accepted accounting principles as
they would be applied to the Cinema.
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"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.
"Income Statements" has the meaning given that term in SECTION 3.4.
"Indemnified Party" has the meaning given that term in SECTION 7.5.
"Indemnifying Party" has the meaning given that term in SECTION 7.5.
"Intellectual Property Rights" means trademark and service xxxx rights,
applications and registrations, trade names, fictitious names, service marks,
logos and brand names, copyrights, copyright applications, letters patent,
patent applications and licenses of any of the foregoing, improvements,
blueprints, specifications, drawings, designs and other intellectual property
and proprietary rights.
"IRS" means the United States Internal Revenue Service.
"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.
"Lease Agreement" mean the Lease Agreement for the Cinema identified on
EXHIBIT A hereto.
"Leased Real Estate" means the real estate subject to the Lease Agreement.
"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 3.9.
"Other Agreements" means the other agreements and instruments of title,
assignment or assumption hereunder.
"Permits" has the meaning given that term in SECTION 3.11.
"Permitted Encumbrances" means liens for current taxes not yet due and
liens of public record on personal property identified on SCHEDULE 1.1P.
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"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, a Governmental Body and any
other legal entity.
"Registration Rights Agreement" has the meaning given that term in SECTION
6.1(N).
"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, PCBs and friable asbestos.
"Related Party" means (i) Transferor, (ii) any Affiliate of Transferor,
(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.
"Retained Assets" has the meaning given that term in SECTION 2.3.
"Retained Liabilities" has the meaning given that term in SECTION 2.5.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Deposits" means the security deposits under the Leases.
"Superfund" means the United States 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 or local 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.
"Transferor" has the meaning given that term in the heading of this
Agreement.
"Transferor Damages" has the meaning given that term in SECTION 7.3.
"Transferor Group" means Transferor and any corporation that may be
aggregated with Transferor under Sections 414(b), (c), (m) or (o) of the Code.
"Transferor Indemnitees" has the meaning given that term in SECTION 7.3.
"Transferor's Predecessor" means any predecessor in interest to
Transferor, whether by merger, combination, reorganization or otherwise.
"Transferred Assets" has the meaning given that term in SECTION 2.1(D).
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"Voting Trust Agreement" has the meaning given that term in SECTION
6.1(M).
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.
THE TRANSACTION
2.1. EXCHANGE OF ASSETS. Except as otherwise provided in SECTIONS 2.2 and
2.3, at the Closing, Transferor shall convey, transfer and assign to Transferee,
and Transferee shall assume from Transferor, all of Transferor's properties and
business as a going concern, and goodwill and tangible or intangible assets of
every kind, nature and description existing on the Closing Date located at or
used in connection with the Cinema, whether personal, in electronic form or
otherwise, and whether or not any of such assets have any value for accounting
purposes or are carried or reflected on or specifically referred to in its books
or financial statements, free and clear of all Encumbrances (collectively, the
"Transferred Assets"). Without limiting the foregoing, the Transferred Assets
shall include the following:
(i) All of Transferor's tangible assets, including office furniture,
office equipment and supplies, computer hardware and software, projectors,
projector bulbs, ticketing machines, leasehold improvements on or related to the
Leased Real Estate or related to the Business;
(ii) All of Transferor's books, records, manuals, documents, books
of account, correspondence, sales reports, literature, brochures, advertising
material and the like related to the Business (other than accounting records and
corporate books and records as defined in SECTION 2.3);
(iii) All of Transferor's inventory and supplies, including
concession products, candy items and paper goods for the Business;
(iv) All of Transferor's rights under leases for personal property,
if any;
(v) All of Transferor's rights under the Permits;
(vi) All of Transferor's goodwill and rights in and to the name
"Bellevue";
(vii) Transferor's rights to the telephone numbers for Cinema
location; and
(viii) The goodwill of the Business.
5
2.2. CASH. As a convenience, Transferor shall assign xxxxx cash on hand at
Closing to Transferee and Transferee shall at Closing reimburse Transferor for
the face amount of such cash.
2.3. RETAINED ASSETS. Except for the Transferred Assets, Transferee is not
receiving and Transferor is not assigning Transferor's accounting records and
corporate minute books, stock books and corporate seal (collectively, the
"Retained Assets"). Accounting Records of Transferor shall remain the exclusive
property of Transferor in accord with this Section, and shall mean any and all
books of original entry, including any register or computer tapes, all journals
or ledgers, all canceled checks, payroll records, bank or other account
statements, including account statements or reports to or from any vendors,
suppliers, film companies, or otherwise, including any correspondence relating
to same or to any other items designated as an accounting record hereunder, and
including all financial statements, records, tax returns, and all workpapers or
supporting information relating thereto, including all information gathered or
compiled by Transferor or Transferor's agents or accountants therefor, or
summaries of same, including all disks, print-outs, or other digital or analog,
written or electronic recording thereof. The Purchased Assets shall not include
any permits that are non-transferable. Transferor knows of no reason why any
permit issued to Transferor for use in its business would not be issued to
Transferee for use by it after the Closing, assuming only Transferee is
qualified to receive same.
2.4. [NOT USED].
2.5. RETAINED LIABILITIES. Transferee does not hereby and shall not assume
or in any way undertake to pay, perform, satisfy or discharge any other
Liability of Transferor, whether existing on, before or after the Closing Date
or arising out of any transactions entered into, or any state of facts existing
on, prior to or after the Closing Date (the "Retained Liabilities"), and
Transferor agrees to pay and satisfy when due all Retained Liabilities. Without
limiting the foregoing, the term "Retained Liabilities" shall include
Liabilities:
(i) to any Related Party;
(ii) for or under any Benefit Plan;
(iii) for any Taxes, whether or not by reason of, or in connection
with, the transactions contemplated by this Agreement;
(iv) with respect to Transferor's administrative and corporate
operations; and
(v) to any film distributor.
Transferee acknowledges that Transferee is responsible for any and all
liabilities of the Business first occurring after the Closing Date.
2.6. EXCHANGE OF STOCK FOR ASSETS.
(a) EXCHANGE OF STOCK. In exchange for the Transferred Assets, the
Transferee shall deliver to the Transferor the CCG Shares. The CCG Shares to be
delivered hereunder shall equal that number of shares of CCG Common Stock equal
to the result obtained by dividing $750,000
6
by the closing price for the CCG Shares on the last trading day immediately
prior to Closing; provided, HOWEVER, that in no event shall the number of CCG
Shares to be delivered hereunder exceed 68,182. The CCG Shares being delivered
pursuant hereto shall not be registered under the Securities Act.
(b) SECTION 368. This transaction is intended to be a reorganization
within the meaning of Section 368 of the Code. The CCG Shares to be issued
pursuant hereunder will be issued solely in exchange for the Transferred Assets,
and no agreement contained herein or contemplated hereby represents, provides
for, or is intended to be consideration for the Transferred Assets. The parties
hereto shall take reasonable steps necessary to ensure the transaction
contemplated herein is treated for federal income tax purposes as set forth in
this Section. However, neither party hereto warrants to the other that the
transactions herein will be a tax-free reorganization under the Code.
(c) DEPOSIT. Transferee will deliver to Transferor within three business
days after the date that CJM Enterprises receives the consent to the assignment
to CCC Cedar Grove Cinema Corp. of the lease for the five-screen theater
operated by it at Cedar Grove, New Jersey, a good faith deposit equal to Fifteen
Thousand Dollars (the "Deposit") which shall be returned to Transferee at
Closing if there is a Closing hereunder. If there is no Closing hereunder, then
the Deposit shall be returned promptly to Transferee, unless Transferee is in
material breach hereof and such material breach was the sole cause of the
failure to Close hereunder. The Deposit shall be held in escrow by Transferor's
counsel (as a fiduciary) subject to the terms of this Agreement.
2.7. CLOSING. The consummation of the exchange of the Transferred Assets
and the CCG Shares, and the consummation of the other transactions contemplated
hereby (the "Closing") shall take place at 10:00 a.m., local time, on December
12, 1997 at the offices of Xxxxxxxxxxx & Xxxxxxxx, LLP, 1251 Avenue of the
Americas, New York, New York, 10020-1104 or at such other time, date or place as
the parties agree (the "Closing Date"). Closing shall be effective at 12:01 a.m.
on the Closing Date.
2.8. TITLE. Title to all Transferred Assets shall pass from Transferor to
Transferee at Closing, subject to the terms and conditions of this Agreement.
Transferee assume no risk of loss to the Transferred Assets prior to Closing.
2.9. CERTAIN CONSENTS. Nothing in this Agreement shall be construed as an
attempt to assign any Permit included in the Transferred Assets which is by its
terms or in law nonassignable without the consent of the other party or parties
thereto, unless such consent shall have been given, or as to which all the
remedies for the enforcement thereof enjoyed by Transferor would not, as a
matter of law, pass to Transferee as an incident of the assignments provided for
by this Agreement.
2.10. 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. Transferor covenants that it 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
7
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.
Transferor agrees and consents 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.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF TRANSFEROR
As an inducement to Transferee and CCG to enter into this Agreement and
consummate the transactions contemplated hereby, Transferor and Xx. Xxxxxx
jointly and severally represent and warrant to Transferee and CCG as follows:
3.1. ORGANIZATION. Transferor is a corporation duly organized, validly
existing and in good standing under the laws of the State of New Jersey, and has
the power and authority to own or lease its properties, carry on the Business as
now conducted, enter into this Agreement and the Other Agreements to which it is
or is to become a party and perform its obligations hereunder and thereunder.
3.2. AUTHORIZATION; ENFORCEABILITY. This Agreement and each Other
Agreement to which Transferor is a party have been duly executed and delivered
by and constitute the legal, valid and binding obligations of Transferor and Xx.
Xxxxxx, enforceable against them in accordance with their respective terms. Each
Other Agreement to which Transferor and Xx. Xxxxxx are to become a party
pursuant to the provisions hereof, when executed and delivered by Transferor and
Xx. Xxxxxx, will constitute the legal, valid and binding obligation of
Transferor and Xx. Xxxxxx, enforceable against them in accordance with the terms
of such Other Agreement. All actions contemplated by this Section have been duly
and validly authorized by all necessary proceedings by Transferor.
3.3. NO VIOLATION OF LAWS OR AGREEMENTS; CONSENTS. Neither the execution
and delivery of this Agreement or any Other Agreement to which Transferor or Xx.
Xxxxxx is or is to become a party, the consummation of the transactions
contemplated hereby or thereby nor the
8
compliance with or fulfillment of the terms, conditions or provisions hereof or
thereof by Transferor or Xx. Xxxxxx will: (i) contravene any provision of any
Governing Document of Transferor, (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 material
contract, agreement or instrument to which Transferor or Xx. Xxxxxx is a party
or by which any of their assets may be bound or affected, (iii) result in the
creation, maturation or acceleration of any Liability of Transferor or Xx.
Xxxxxx (or give to any other Person the right to cause such a creation,
maturation or acceleration), (iv) violate any Law or violate any judgment or
order of any Governmental Body to which Transferor is subject or by which any of
the Transferred Assets or any of its other assets may be bound or affected, or
(v) result in the creation or imposition of any Encumbrance upon any of the
Transferred Assets or give to any other Person any interest or right therein. No
consent, approval or authorization of, or registration or filing with, any
Person is required in connection with the execution and delivery by Transferor
or Xx. Xxxxxx of this Agreement or any of the Other Agreements to which it is or
is to become a party pursuant to the provisions hereof or the consummation by
Transferor or Xx. Xxxxxx of the transactions contemplated hereby or thereby.
3.4. CINEMA INCOME STATEMENTS. The Transferor commenced operation of the
Cinema in December, 1996. Attached hereto as EXHIBIT C are the income statements
for the Cinema for the nine month period ended August 31, 1997 (the "Income
Statements"). The Income Statements (i) are correct and complete, (ii) have been
prepared in accordance with GAAP on a consistent basis, and (iii) fairly present
the results of operation of the Cinema for periods then ended in accordance with
GAAP. Transferor has no money due and owing to any film distributor in
connection with the Cinema except for money owing in the normal course of
business for which an amount is not ascertainable to pay or which is not due
prior to Closing. The aggregate gross box office revenues for the Cinema for the
period from January 1, 1997 through August 31, 1997 was $750,000. The aggregate
gross concession revenues for the Cinema for the period from January 1, 1997
through August 31, 1997, was $250,000. Earnings before interest, taxes and
depreciation and amortization for the Cinema for the period from January 1, 1997
through August 31, 1997 was $236,000.
3.5. NO CHANGES. Since September 30, 1996, Transferor has conducted the
Business only in the ordinary course. Without limiting the generality of the
foregoing sentence, since September 30, 1996, there has not been any: (i)
material adverse change in the Transferred Assets or Leased Real Estate; (ii)
damage or destruction to any Purchased Asset or Leased Real Estate, whether or
not covered by insurance; (iii) strike or other labor trouble at the Cinema;
(iv) increase in the salary, wage or bonus of any employee of the Cinema; or (v)
agreement or commitment to do any of the foregoing. Except as provided on
SCHEDULE 3.5, since September 30, 1996, Transferor has not made any material
changes, substitutions or replacements to the equipment, furniture or fixtures
at the Cinema.
3.6. TAXES. Transferor, its Affiliates and Transferor's Predecessor, have
filed or caused to be filed on a timely basis, or will file or cause to be filed
on a timely basis, all Tax Returns that are required to be filed by it prior to
or on the Closing Date, pursuant to the Law of
9
each governmental authority with taxing power over it. All such Tax Returns were
or will be, as the case may be, correct and complete. Transferor and
Transferor's Predecessor have paid or will pay all Taxes that have or will
become due as shown on such Tax Returns or pursuant to any assessment received
as an adjustment to such Tax Returns (subject to all rights of appeal by
Transferee). Transferor and Transferor's Predecessor have withheld and paid all
Taxes required to have been withheld in connection with amounts paid or owing to
any employee, independent contractor, creditor, stockholder or other third
party.
3.7. UNDISCLOSED LIABILITIES. Except as disclosed on SCHEDULE 3.7,
Transferor has no, and after Closing shall have no, Liabilities of any kind or
nature whatsoever that would attach to the Transferred Assets or for which any
Transferee or CCG may become liable.
3.8. CONDITION OF ASSETS; TITLE; BUSINESS. Transferor has good, marketable
and exclusive title to all of the Transferred Assets. The tangible Transferred
Assets are in good operating condition and repair suitable for the purposes for
which they are used in the Business, and all equipment included in the
Transferred Assets have been maintained in the normal course of business by
qualified professionals. Except as disclosed on SCHEDULE 3.8 and except for
Permitted Encumbrances, none of the Transferred Assets is subject to any
Encumbrance. SCHEDULE 3.8 identifies any property located on the Leased Real
Estate that is not owned by Transferor. The Encumbrances identified on SCHEDULE
3.8 will be removed by Transferor on or prior to Closing. The Transferred Assets
do not contain any shares of capital stock of or other equity interest in any
Person. On the Closing Date, the Transferred Assets will include at a minimum
(i) one functioning xenon projector bulb for each auditorium in the Cinema, and
(ii) one new, unused, spare xenon projector bulb for each type of projector at
the Cinema location.
3.9. 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 Transferor and Xx. Xxxxxx, threatened against
or affecting Transferor, Xx. Xxxxxx, the Business, any of the Transferred
Assets, the Leased Real Estate, or any of the transactions contemplated by this
Agreement or any Other Agreement except for claims for personal injury and
workers compensation and further except for claims for property damage
identified on SCHEDULE 3.9 and claims by Governmental Bodies identified on
SCHEDULE 3.9. There is presently no outstanding judgment, decree or order of any
Governmental Body against or affecting Transferor, Xx. Xxxxxx, the Business, any
of the Transferred Assets, the Leased Real Estate, or any of the transactions
contemplated by this Agreement or any Other Agreement. Neither Transferor nor
Xx. Xxxxxx has any pending any Litigation against any third party related to the
Business.
3.10. CONTRACTS. There is no contract, lease or other agreement, that
materially affects or is used in the Business or the Leased Real Estate.
3.11. PERMITS; COMPLIANCE WITH LAW. Subject to SECTION 5.10, Transferor
holds all health department and certificates of occupancy required under any
applicable Law in connection with the operation of the Business and use and
occupancy of the Leased Real Estate ("Permits"). The Transferred Assets include
all Permits other than the occupancy permit which must be
10
obtained under local law by Transferee. Transferor has received no notice of any
violation of Law which has not been remedied or rectified.
3.12. LEASED REAL ESTATE. Xx. Xxxxxx has the right to quiet enjoyment of
all Leased Real Estate, including all renewal rights under the Lease Agreement.
Xx. Xxxxxx has not received any written or oral notice of assessments for public
improvements against any Leased Real Estate 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 relates to violations of building,
safety or fire ordinances or regulations, claims any defect or deficiency with
respect to any of such properties or requests the performance of any repairs,
alterations or other work to or in any of such properties or in the streets
bounding the same, which in each case has not been remedied or rectified. There
is no pending condemnation, expropriation, eminent domain or similar proceeding
affecting all or any portion of the Leased Real Estate. Xx. Xxxxxx has not
received any written notice of any proposed, planned or actual curtailment of
service of any utility supplied to the Leased Real Estate. None of the Leased
Real Estate is subleased to any person. The Lease is in full force and effect in
accordance with their terms, and have not been modified or amended (other than
as disclosed on EXHIBIT A) and, to the knowledge of Transferor and Xx. Xxxxxx,
no party thereto is in default under any of the terms contained therein.
3.13. LABOR RELATIONS. No employee of Transferor is represented by any
union or other labor organization. No representation election, arbitration
proceeding, grievance, labor strike, dispute, slowdown, stoppage or other labor
trouble is pending or, to the knowledge of Transferor and Xx. Xxxxxx, threatened
against, involving, affecting or potentially affecting Transferor. No complaint
against Transferor or Transferor's Predecessor is pending or, to the knowledge
of Transferor and Xx. Xxxxxx, threatened before the National Labor Relations
Board, the Equal Employment Opportunity Commission or any similar state or local
agency, by or on behalf of any employee of Transferor or Transferor's
Predecessor. To the knowledge of Transferor and Xx. Xxxxxx, Transferor has no
Liability for any occupational disease of any of its employees, former employees
or others.
3.14. INSURANCE. SCHEDULE 3.14 discloses all insurance policies on an
"occurrence" basis with respect to which Transferor or Transferor's Predecessor
is the owner, insured or beneficiary.
3.15. INTELLECTUAL PROPERTY RIGHTS. Transferor neither owns nor is
licensee to any form of Intellectual Property Rights related to the Cinema other
than the names "CJM Enterprises", which is a Retained Asset, and rights to show
films to the public according to agreements which are Retained Assets and
Retained Liabilities. To the knowledge of Transferor and Xx. Xxxxxx, no other
Person has any rights to the names "Xxxxxxxxxxx" in connection with the use of a
cinema in Xxxxxxxxxxx, New Jersey. To the knowledge of Transferor and Xx.
Xxxxxx, Transferor is not infringing upon the intellectual property rights of
any other Person. SCHEDULE 3.14 identifies all computer software owned by
Transferor. With respect to any such computer software, the Transferor makes no
agreement or other warranties or representations hereunder other than that
Transferor a licensee of certain computer software used by it in connection with
certain computer hardware that Transferor is selling to Transferee hereunder and
as to any license for software used with respect to said computer hardware,
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(a) Transferor will assign to Transferee at Closing any rights, title, or
interest in said software, but without warranty,
(b) Transferor's obligation to sell, transfer, or assign any such software
as is otherwise called for above shall be void if prohibited by any such
license, and
(c) At Closing, regardless of whether (a) or (b) is the case, the price
paid by Transferee to Transferor will remain as is otherwise called for in the
agreement.
3.16. EMPLOYEE BENEFITS. Except for medical and dental coverage, life
insurance, and long-term disability plans described on SCHEDULE 3.16 for those
managers of the Cinema identified on SCHEDULE 3.16, Transferor does not maintain
any Benefit Plan for any employees employed at the Cinema. After the Closing,
neither Transferee or CCG will have any Liability, with respect to any Benefit
Plan of Transferor or any other member of the Transferor Group, whether as a
result of delinquent contributions, distress terminations, fraudulent transfers,
failure to pay premiums to the PBGC, withdrawal Liability or otherwise. SCHEDULE
3.16 identifies the names of all employees of Transferor employed at the Cinema,
including each listed employee's address, current compensation, vacation time to
which he or she is entitled and vacation time so far taken. SCHEDULE 3.16 also
includes copies of Transferor's payroll records for all persons currently
employed by Transferor at the Cinema. There are no written or oral agreements or
arrangements providing for the employment by Transferor of any person at the
Cinema other than "at will" agreements. All employees of Transferor at the
Cinema are employees at will. Transferor does not provide a motor vehicle to any
employee of Transferor at the Cinema.
3.17. ENVIRONMENTAL MATTERS. The representations and warranties contained
in this Section are qualified by (i) the disclosures on SCHEDULE 3.17, (ii) the
knowledge of Transferor and Xx. Xxxxxx as to the activities of Tranferor's
Predecessors, and (iii) the knowledge of Transferor and Xx. Xxxxxx as to the
activities of third parties prior to the time that Transferor took possession of
the property subject to the Lease Agreement:
(a) COMPLIANCE; NO LIABILITY. Transferor and Transferor's Predecessor have
operated the Business and each parcel of Leased Real Estate in compliance with
all applicable Environmental Laws. Transferor is not subject to any Liability,
penalty or expense (including legal fees) in connection with the Business or
ownership or leasing of the Leased Real Estate by virtue of any violation of any
Environmental Law, any environmental activity conducted on or with respect to
any property or any environmental condition existing on or with respect to any
property, in each case whether or not Transferor or Transferor's Predecessors
permitted or participated in such act or omission.
(b) TREATMENT; CERCLIS. Neither Transferor nor Transferor's Predecessors
have treated, stored, recycled or disposed of any Regulated Material on any
Leased Real Estate in violation of applicable Environmental Laws, and, to the
knowledge of Transferor and Xx. Xxxxxx, no other Person has treated, stored,
recycled or disposed of any Regulated Material on any part of the Leased Real
Estate in violation of applicable Environmental Laws. There has been no release
of any Regulated Material at, on or under any Leased Real Estate. Neither
Transferor nor Transferor's Predecessors have transported or arranged for the
transportation of any Regulated
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Material from the Cinema to any location that is listed or proposed for listing
on the National Priorities List pursuant to Superfund, on CERCLIS or any other
location that is the subject of federal, state or local enforcement action or
other investigation that may lead to claims against Transferor or Transferor's
Predecessor for cleanup costs, remedial action, damages to natural resources, to
other property or for personal injury including claims under Superfund.
(c) NOTICES; EXISTING CLAIMS; CERTAIN REGULATED MATERIALS; STORAGE TANKS.
Neither Transferor nor Transferor's Predecessors have received any request for
information, notice of claim, demand or other notification that it is or may be
potentially responsible with respect to any investigation, abatement or cleanup
of any threatened or actual release of any Regulated Material. To the knowledge
of Transferor and Xx. Xxxxxx, Transferor is not required to place any notice or
restriction relating to the presence of any Regulated Material at any Leased
Real Estate. There has been no past, and there is no pending or contemplated,
claim by Transferor or Transferor's Predecessor under any Environmental Law or
Laws based on actions of others that may have impacted on the Leased Real
Estate, and neither Transferor nor Transferor's Predecessors has entered into
any agreement with any Person regarding any remedial action or existing
environmental Liability or expense with respect to any of the Real Property or
any real property adjacent to the Real Property. To the knowledge of Transferor
and Xx. Xxxxxx, all storage tanks located on the Leased Real Estate, whether
underground or aboveground, are disclosed on SCHEDULE 3.17. Transferor has not
closed or caused to be closed any underground storage tank on the Leased Real
Estate.
(d) CONFIDENTIALITY. Transferee and CCG (for itself and for any affiliate
of itself or of Transferee) hereby agree that they will not disclose to any
person any information they may have gained with regard to the operation or the
finances of the business sold by Transferor hereunder which information was
gained by disclosures made to them by Transferor and that this obligation of
confidentiality shall survive the Closing. Without otherwise limiting the
information subject to the obligation of confidentiality set forth above, the
information to be kept confidential by Transferee and Transferee's affiliates,
as is set forth above, shall include the financial statements annexed to this
agreement and the financial representations made hereunder and any information
contained in any accounting records of Transferor as may have been disclosed or
made available to Transferee in Transferee's review of Transferor's business
prior to Closing.
3.18. ADDITIONAL THEATERS. Neither Transferor nor Xx. Xxxxxx has any
knowledge of the intention by any person to construct or open any movie
theater within a five-mile radius of the Cinema.
3.19. SECURITIES MATTERS. Xx. Xxxxxx and Transferor 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. Xx. Xxxxxx and Transferor and their
representatives have had, at their discretion, an opportunity to meet with the
officers CCG to discuss CCG's business. Xx. Xxxxxx and Transferor 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 Transferor or Stockholder has any intention of selling
the CCG Shares or any interest therein in
13
violation of the federal securities laws or any applicable state securities
laws. Xx. Xxxxxx and Transferor 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 Xx. Xxxxxx and Transferor 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 0000 Xxx.
3.20. FINDERS' FEES. Neither Transferor nor any of its officers, managers
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 or by any Other Agreement.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF TRANSFEREE
As an inducement to Transferor to enter into this Agreement and consummate
the transactions contemplated hereby, Transferee and CCG jointly and severally
represent and warrant to Transferor and Xx. Xxxxxx as follows:
4.1. ORGANIZATION. Each of Transferee and CCG is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and has the corporate power and authority to own or lease its
properties, carry on its business, enter into this Agreement and the Other
Agreements to which it is or is to become a party and perform its obligations
hereunder and thereunder.
4.2. AUTHORIZATION AND ENFORCEABILITY. This Agreement and each Other
Agreement to which Transferee and CCG is a party have been duly executed and
delivered by and constitute the legal, valid and binding obligations of
Transferee and CCG, enforceable against it in accordance with their respective
terms. Each Other Agreement to which Transferee and CCG is to become a party
pursuant to the provisions hereof, when executed and delivered by Transferee and
CCG, will constitute the legal, valid and binding obligation of Transferee and
CCG, enforceable against Transferee and CCG in accordance with the terms of such
Other Agreement. All actions contemplated by this Section have been duly and
validly authorized by all necessary proceedings by Transferee and CCG.
4.3. NO VIOLATION OF LAWS; CONSENTS. Neither the execution and delivery of
this Agreement or any Other Agreement to which Transferee or CCG is or is to
become a party, the consummation of the transactions contemplated hereby or
thereby nor the compliance with or fulfillment of the terms, conditions or
provisions hereof or thereof by Transferee or CCG will: (i) contravene any
provision of the Governing Documents of any Transferee or CCG, (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 contract,
agreement or instrument to which any Transferee or CCG is a party or by which
any of their assets may be bound or affected, (iii) result in the creation,
maturation or acceleration of any Liability of any Transferee or CCG (or give to
any other Person the right to cause such a creation, maturation or
14
acceleration), or (iv) violate any Law or any judgment or order of any
Governmental Body to which any Transferee or CCG is subject or by which any of
its assets may be bound or affected. Except for the consent of Provident Bank,
no consent, approval or authorization of, or registration or filing with, any
Person is required in connection with the execution or delivery by Transferee or
CCG of this Agreement or any of the Other Agreements to which Transferee or CCG
is or is to become a party pursuant to the provisions hereof or the consummation
by Transferee or CCG of the transactions contemplated hereby or thereby.
4.4. NO PENDING LITIGATION OR PROCEEDINGS. No Litigation is pending or, to
the knowledge of any Transferee or CCG, threatened against or affecting CCG or
any Affiliate of CCG in connection with any of the transactions contemplated by
this Agreement or any Other Agreement to which Transferee and CCG is or is to
become a party or that would, to CCG's knowledge, have a material adverse effect
on CCG's business considered as a whole. There is presently no outstanding
judgment, decree or order of any Governmental Body against or affecting CCG or
any Affiliate of CCG in connection with the transactions contemplated by this
Agreement or any Other Agreement to which any Transferee or CCG is or is to
become a party.
4.5. FINDERS' FEES. Neither Transferee, 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. STOCK OWNERSHIP. CCG owns all of the issued and outstanding capital
stock of the Transferee.
4.7. CCG SHARES. At Closing, the CCG Shares shall be duly authorized,
validly issued and fully paid and non-assessable.
ARTICLE V.
CERTAIN COVENANTS
5.1. CONDUCT OF BUSINESS PENDING CLOSING. From and after the date hereof
and until the Closing Date, unless Transferee shall otherwise consent in
writing, Transferor shall (and Xx. Xxxxxx shall cause Transferor to) conduct its
affairs as follows:
(a) ORDINARY COURSE; COMPLIANCE. The Business shall be conducted only in
the ordinary course and consistent with past practice. Transferor and Xx. Xxxxxx
shall maintain the Transferred Assets, and the Leased Real Estate consistent
with past practice and shall comply in a timely fashion with the provisions of
all Permits and its other agreements and commitments. Transferor shall use its
best efforts to keep the Business organization intact, keep available the
services of its present employees and preserve the goodwill of its suppliers,
patrons and others having business relations with it. Transferor shall maintain
in full force and effect its policies of insurance, subject only to variations
required by the ordinary operations of the Business, or else shall obtain, prior
to the lapse of any such policy, substantially similar coverage with insurers of
recognized standing.
15
(b) PROHIBITED TRANSACTIONS. Transferor shall not: (i) amend or terminate
any Permit; (ii) fail to pay any Liability or charge when due, other than
Liabilities contested in good faith by appropriate proceedings; (iii) enter into
any employment or consulting contract or arrangement with any employee of the
Cinema; (iii) take any action or omit to take any action that is reasonably
likely to result in the occurrence of any event described in SECTION 3.5; or
(vi) take any action or omit to take any action that will cause a breach or
termination of any Permit, other than termination by fulfillment of the terms
thereunder.
(c) ACCESS, INFORMATION AND DOCUMENTS. Transferor shall give to Transferee
and to Transferee's employees and representatives (including accountants,
attorneys, environmental consultants and engineers) access during normal
business hours to all of the properties, books, contracts, commitments, records,
officers, personnel and accountants (including independent public accountants
and their workpapers) of Transferor solely as they relate to the Cinema and
shall furnish to Transferee all such documents and copies of documents and all
information with respect to the properties, Liabilities and affairs of
Transferor (solely as they relate to the Cinema) as Transferee may reasonably
request, including but not limited to weekly reports of gross box office and
concession receipts at the Cinema, at the same time such reports are available
to Transferor's management.
5.2. FULFILLMENT OF AGREEMENTS. Each party hereto shall use its best
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 best 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. Transferor shall, prior to Closing, obtain the consents referred
to in SECTION 3.3.
5.3. EMPLOYMENT, SEVERANCE AND TERMINATION PAYMENTS. Transferor agrees to
pay, perform and discharge any and all severance payments, payroll and
employment related Liabilities with respect to employees of Transferor at the
Cinema accruing up to the close of business on the date immediately preceding
the Closing Date or which result from the transfer of the Transferred Assets
hereunder and the employment by Transferee of those employees and shall
indemnify and hold harmless Transferee and its directors, officers and
Affiliates from and against any and all losses, Liabilities, damages, costs and
expenses, including reasonable legal fees and disbursements, that any of the
aforesaid may suffer or incur by reason of or relating to any such Liabilities.
5.4. TRANSFEROR'S EMPLOYEES. Transferee shall have the right, but not the
obligation, to offer employment to any of the employees of Transferor who are
employed at the Cinema. At or prior to the Closing, Transferor shall fully
compensate all employees of Transferor at the Cinema for all work performed
through and including the Closing Date. Transferor does not guaranty that any of
the employees to which Transferee or CCG will offer employment will accept such
offer of employment.
5.5. WORKERS' COMPENSATION AND DISABILITY CLAIMS.
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(a) TRANSFEROR'S LIABILITY. Transferor shall remain liable for all
Liability for all workers' compensation, disability and occupational diseases of
or with respect to all of Transferor's employees attributable to injuries,
claims, conditions, events and occurrences occurring on or before the Closing
Date.
(b) TRANSFEREE'S LIABILITY. Transferee shall be liable for all Liability
for all workers' compensation, disability and occupational diseases of or with
respect to all of employees of Transferor hired by Transferee attributable to
injuries, claims, conditions, events and occurrences first occurring after the
Closing Date.
5.6. COVENANT NOT TO COMPETE.
(a) RESTRICTION. For a period of five years from and after the Closing
Date, neither Transferor nor Xx. Xxxxxx shall not, directly or indirectly, own,
manage, operate, join, control or participate in the ownership, management,
operation or control of, or be employed or otherwise connected as an officer,
employer, stockholder, partner or otherwise with, the Cinema within a seven mile
radius of any theatre owned directly or indirectly by CCG on the date
immediately following the Closing Date. Ownership of not more than 2% of the
outstanding stock of any publicly traded company or operation of the projects
identified in SECTION 5.11 shall not be a violation of this Section.
(b) ENFORCEMENT. The restrictive covenant contained in this Section is a
covenant independent of any other provision of this Agreement and the existence
of any claim that Transferor may allege against any other party to this
Agreement, whether based on this Agreement or otherwise, shall not prevent the
enforcement of this covenant. Transferor agrees that Transferee's remedies at
law for any breach or threat of breach by Transferor of the provisions of this
Section will be inadequate, and that Transferee shall be entitled to an
injunction or injunctions to prevent breaches of the provisions of this Section
and to enforce specifically the terms and provisions hereof, in addition to any
other remedy to which Transferee may be entitled at law or equity. In the event
of litigation regarding this covenant not to compete, the prevailing party in
such litigation shall, in addition to any other remedies the prevailing party
may obtain in such litigation, be entitled to recover from the other party its
reasonable legal fees and out of pocket costs incurred by such party in
enforcing or defending its rights hereunder. The length of time for which this
covenant not to compete shall be in force shall not include any period of
violation or any other period required for litigation during which Transferee
seek to enforce this covenant. Should any provision of this Section be adjudged
to any extent invalid by any competent tribunal, such provision will be deemed
modified to the extent necessary to make it enforceable.
5.7. PUBLICITY. Transferor and Transferee shall not issue any press
release or otherwise make any announcements to the public or the employees of
Transferor with respect to this Agreement prior to the Closing Date without the
prior written consent of the other, except as required by Law. If Transferee
believes that a public disclosure of the transactions contemplated hereby is
required by law, Transferee shall give to Transferor notice thereof at least 24
hours prior to making such disclosure.
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5.8. TRANSITIONAL MATTERS. Transferor and Xx. Xxxxxx shall cooperate with
and assist Transferee and its authorized representatives in order to provide, to
the extent reasonably requested by Transferee, an efficient transfer of control
of the Transferred Assets and the Leased Real Estate and to avoid any undue
interruption in the activities and operations of the Business and the Leased
Real Estate following the Closing Date. Transferor shall not cause any utilities
to be disconnected until the Transferee shall have established an account for
such utility in Transferee's own name. Transferor shall assist in transferring
to Transferee the telephone numbers for the Cinema location. Transferee shall be
liable to Transferor for the utility payments for any utility maintained by the
Transferor after the Closing Date. Transferor shall cooperate with Transferee's
lender, Provident Bank, in connection with the consummation by Transferee of the
transactions provided hereunder, as reasonably requested by such lender. Such
cooperation shall permit Provident Bank to rely on the legal opinion be
delivered by Transferor's counsel hereunder. Prior to Closing, Transferor shall
remove all of its movie trailers from films at the Cinema.
5.9. BOOKS AND RECORDS. Transferor shall not destroy or dispose of any
books, records, and files relating to the Business to the extent that they
pertain to the Business prior to the Closing Date.
5.10. PERMITS; N.J. ISRA. Transferor shall use its best efforts to provide
to Transferee valid Permits for the Cinema prior to Closing. In the event that
Transferor is unable to do so by Closing, then Transferor shall provide
Transferee with such Permits within 30 days after Closing. Transferors shall
obtain prior to Closing letters of Non-Applicability with respect to the Leased
Real Estate under the New Jersey Site Recovery Act (PL 1993, ch. 39).
ARTICLE VI.
CONDITIONS TO CLOSING; TERMINATION
6.1. CONDITIONS PRECEDENT TO OBLIGATION OF TRANSFEREE. The obligation of
Transferee and CCG 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 Transferee or CCG at
Transferee's or CCG's sole option:
(a) BRINGDOWN OF REPRESENTATIONS AND WARRANTIES; COVENANTS. Each of the
representations and warranties of Transferor and Xx. Xxxxxx 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.
Transferor and Xx. Xxxxxx shall have performed in all respects all of the
covenants and complied with all of the provisions required by this 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, after Closing, limit or adversely affect Transferee's
ownership of the Transferred Assets or the Leased Real Estate in a manner
different from Transferor's, and there shall not have been threatened, nor shall
there be pending, any action or proceeding by or before any Governmental Body
challenging the
18
lawfulness of or seeking to prevent or delay any of the transactions
contemplated by this Agreement or any of the Other Agreements 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 Business or any of the Transferred Assets, results of
operations, prospects or condition, of the Cinema or the Leased Real Estate.
(d) CLOSING CERTIFICATE. If Closing occurs after the date hereof,
Transferor shall have delivered a certificate, dated the Closing Date 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 Transferor with regard to the matters therein for purposes of this Agreement.
(e) CLOSING DOCUMENTS. Transferee and CCG shall have received the other
documents referred to in SECTION 6.3(A). All agreements, certificates, opinions
and other documents delivered by Transferor to Transferee and CCG hereunder
shall be in form and substance reasonably satisfactory to Transferee and CCG.
(f) TITLE INSURANCE. Transferee, at their sole cost and expense, shall
have obtained for all Leased Real Estate final marked commitments to issue to
Transferee ALTA (1990-Form B with appropriate state endorsements) owner's
policies of title insurance in coverage amounts equal to the fair market values
of the Leased Real Estate, insuring good title to the Leased Real Estate with
mechanic's liens coverage and such endorsements as Transferee may have
reasonably requested and with exceptions only for ALTA standard printed
exceptions (other than mechanic's and materialmen's liens and rights of
possession), and Permitted Encumbrances.
(g) BOARD APPROVAL; BANK APPROVAL. Transferee and CCG shall have received
the approval of its Board of Directors and its senior secured lender to the
transactions contemplated hereunder.
(h) OTHER AGREEMENTS. CCG shall have closed under the agreement to
purchase Cinema 23 in Cedar Grove, New Jersey, which is owned by Xx. Xxxxxx.
(i) RELEASE OR TERMINATION OF MORTGAGE AND OTHER ENCUMBRANCES. Transferor
shall have caused all Encumbrances on the Leased Real Estate and all
Encumbrances on the other Transferred Assets to be released.
(j) LEASED REAL ESTATE. Xx. Xxxxxx shall have executed and delivered
the Lease Agreement.
(k) CONSENTS. Transferor shall have received the other consents, approvals
and actions of the Persons identified in SECTION 3.3.
(l) NEW THEATER TRANSITION FORMS. Transferee shall have received a
completed New Theater Transition Form in respect of the Transferor.
19
(m) VOTING TRUST AGREEMENT. Transferor shall have executed and delivered a
Voting Trust Agreement substantially in the form of EXHIBIT D with respect to
the CCG Shares ("Voting Trust Agreement").
(n) REGISTRATION RIGHTS AGREEMENT. Transferor shall have executed and
delivered a Registration Rights Agreement substantially in the form of EXHIBIT E
with respect to the CCG Shares ("Registration Rights Agreement").
(o) DUE DILIGENCE. CCG shall have been satisfied with its due diligence
investigation of the Cinema.
6.2. CONDITIONS PRECEDENT TO OBLIGATION OF TRANSFEROR AND XX. XXXXXX. The
obligation of Transferor and Xx. Xxxxxx 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
Transferor or Xx. Xxxxxx at Transferor's or Xx. Xxxxxx'x sole option:
(a) BRINGDOWN OF REPRESENTATIONS AND WARRANTIES; COVENANTS. Each of the
representations and warranties of Transferee 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.
Transferee and CCG shall have performed all of the covenants and complied in all
respects with all of the provisions required by this 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 the Other Agreements or seeking monetary or
other relief by reason of the consummation of such transactions.
(c) CLOSING CERTIFICATE. If Closing occurs after the date hereof,
Transferee and CCG shall have delivered a certificate, dated the Closing Date
certifying to the fulfillment of the conditions set forth in subparagraphs (a)
and (b) of this SECTION 6.2. Such certificate shall constitute a representation
and warranty of Transferee with regard to the matters therein for purposes of
this Agreement.
(d) OTHER AGREEMENTS. Xx. Xxxxxx shall have closed under CCG's agreement
to purchase Cinema 23, which is owned by Xx. Xxxxxx.
(e) CLOSING DOCUMENTS. Transferor shall also have received the other
documents referred to in SECTION 6.3(B). All agreements, certificates, opinions
and other documents delivered by Transferee to Transferor hereunder shall be in
form and substance reasonably acceptable to counsel for Transferor, in the
exercise of such counsel's reasonable professional judgment.
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(f) LEASE AGREEMENT. Transferee shall have executed and delivered the
Lease Agreement.
6.3. DELIVERIES AND PROCEEDINGS AT CLOSING.
(a) DELIVERIES BY TRANSFEROR AND XX. XXXXXX. Transferor and Xx. Xxxxxx
shall deliver or cause to be delivered to Transferee at the Closing:
(i) General warranty instrument of conveyance and assignment of the
Transferred Assets in the form attached hereto as EXHIBIT F.
(ii) Assignments of all transferable or assignable licenses, Permits
and warranties relating to the Transferred Assets and of any Intellectual
Property included in the Transferred Assets, duly executed and in forms
acceptable to Transferee.
(iii) [not used].
(iv) Certificates of the appropriate public officials to the effect
that Transferor was a validly existing corporation in good standing in its state
of formation as of a date not more than 15 business days prior to the Closing
Date.
(v) Incumbency and specimen signature certificates dated the Closing
Date, signed by the officers of Transferor and certified by its Chief Executive
Officer or Executive Vice President.
(vi) True and correct copies of the Transferor's Certificate of
Incorporation certified by the Secretary of State as of the Closing Date.
(vii) Certificates of Transferor (A) setting forth all resolutions
of the Directors of Transferor and the stockholders of Transferor authorizing
the execution and delivery of this Agreement and the Other Agreements and the
performance by Transferor of the transactions contemplated hereby and thereby,
and (B) to the effect that the Certificate of Incorporation of Transferor
delivered pursuant to SECTION 6.3(A)(VI) were in effect at the date of adoption
of such resolutions, the date of execution of this Agreement and the Closing
Date.
(viii) The opinion of Buklad & Buklad, legal counsel to Transferor,
in substantially the form of EXHIBIT G.
(ix) Keys for the Cinema location.
(x) All vendor warranties (including those for the roofs on the
Cinema) respecting the Transferred Assets.
(xi) Such other agreements and documents as Transferee may
reasonably request.
(b) DELIVERIES BY TRANSFEREE. Transferee shall deliver or cause to be
delivered to Transferor at the Closing:
21
(i) [not used].
(ii) A certificate of the appropriate public official to the effect
that Transferee and CCG is a validly existing corporation in the State of
Delaware as of a date not more than 15 business days prior to the Closing Date.
(iii) Incumbency and specimen signature certificates signed by the
officers of Transferee and CCG and certified by the Secretary of Transferee and
CCG.
(iv) True and correct copies of the Certificates of Incorporation of
Transferee and CCG as of a date not more than 15 business days prior to the
Closing Date, certified by the Secretary of State of Delaware.
(v) A certificate of the Secretary of Transferee and CCG (A) setting
forth all resolutions of the Board of Directors of Transferee and CCG
authorizing the execution and delivery of this Agreement and Other Agreements
and the performance by Transferee and CCG of the transactions contemplated
hereby and thereby, certified by the Secretary of Transferee and CCG and (B) to
the effect that the Certificates of Incorporation of Transferee delivered
pursuant to SECTION 6.3(B)(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 opinion of Xxxxxxxxxxx & Xxxxxxxx LLP, counsel to
Transferee and CCG, in substantially the form of EXHIBIT H.
(vii) Such other agreements and documents as Transferor may
reasonably request.
6.4. TERMINATION.
(a) MUTUAL CONSENT; FAILURE OF CONDITIONS. Except as provided in SECTION
6.4(B), this Agreement may be terminated at any time prior to Closing by: (i)
mutual consent of Transferee, CCG and Transferor; (ii) Transferee and CCG, if
any of the conditions specified in SECTION 6.1 hereof shall not have been
fulfilled by December 19, 1997 and shall not have been waived by Transferee and
CCG; or (iii) Transferor, if any of the conditions specified in SECTION 6.2
hereof shall not have been fulfilled by December 19, 1997 and shall not have
been waived by Transferor. In the event of termination of this Agreement by
either Transferee, CCG or Transferor pursuant to clause (ii) or (iii) of the
immediately preceding sentence, Transferee and CCG, on the one hand, and
Transferor on the other hand shall be liable to the other for any breach hereof
by such party, which breach led to such termination, and the rights and
obligations of the parties set forth in SECTIONS 7.2, 7.3 and 8.1 shall survive
such termination. Transferee, CCG and Transferor 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. Notwithstanding the foregoing, in the event that this Agreement is
terminated by one party hereto pursuant to clause (ii) or (iii) of the first
sentence of this Section solely as a result of a breach by the other party
hereto of a representation or warranty of such other party as of a date after
the date of this Agreement, which breach could not have been reasonably
anticipated by such other party and was beyond the reasonable control of such
other party, then the remedy of
22
the party terminating this Agreement shall be limited solely to recovery of all
of such party's costs and expenses incurred in connection herewith.
(b) CASUALTY DAMAGE. Notwithstanding anything else herein to the contrary,
if prior to Closing the Transferred Assets (or any portion thereof) are damaged
by fire or any other cause, the reasonable estimate of the immediate repair of
which would cost more than $50,000, Transferee at its option, which may be
exercised by written notice given to Transferor within ten business days after
Transferee's receipt of notice of such loss, may declare this Agreement null and
void, or Transferee may Close subject to reduction of the Purchase Price by the
amount of any applicable insurance deductible which shall be paid by Transferee
and assignment to Transferee of the proceeds from any insurance carried by
Transferor covering such loss. If prior to Closing the Transferred Assets (or
any portion thereof) are damaged by fire or any other cause, the reasonable
estimate of the repair of which would cost $50,000 or less, such event shall not
excuse Transferee from their obligations under this Agreement, but the Purchase
Price shall be reduced by an amount equal to the amount of such cost and
Transferor shall be entitled to retain the net insurance proceeds collected or
to be collected by Transferor.
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; PROVIDED, HOWEVER, that, representations and warranties hereunder
shall survive for a period of three years after the Closing Date, with the
exception of the representations and warranties contained in SECTIONS 3.1, 3.2,
3.3 AND 3.6, the first sentence of SECTION 3.8, and SECTIONS 4.1, 4.2 AND 4.3,
all of which shall survive for the period of the applicable statute of
limitations plus 90 days. All claims for damages made by virtue of any
representations, warranties and agreements herein shall be made under, and
subject to the limitations set forth in, this ARTICLE VII. The representations
and warranties set forth in ARTICLES III and IV are cumulative, and any
limitation or qualification set forth in any one representation and warranty
therein shall not limit or qualify any other representation and warranty
therein. Except the representations and warranties of each party hereto
expressly contained in this Agreement or the Other Agreements, no party hereto
is making and specifically disclaims any representations or warranties of any
kind or character, express or implied.
7.2. INDEMNIFICATION BY TRANSFEROR AND XX. XXXXXX. Transferor and Xx.
Xxxxxx shall jointly and severally indemnify, defend, save and hold Transferee,
CCG and their officers, directors, employees, agents and Affiliates
(collectively, "Transferee Indemnitees") harmless from and against 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; collectively, "Transferee Damages") asserted
against, imposed upon, resulting to, required to be paid by, or incurred by any
Transferee Indemnitees, directly or indirectly, in connection with, arising out
of, resulting from, or which would not have occurred but for, (i) a material
breach of any representation or warranty made by Transferor in this Agreement,
in any certificate or
23
document furnished pursuant hereto by Transferor or any Other Agreement to which
Transferor is or is to become a party, (ii) a breach or nonfulfillment of any
covenant or agreement made by Transferor in or pursuant to this Agreement and in
any Other Agreement to which Transferor is or is to become a party, (iii) any
Retained Liability, (iv) any successor liability (or Liabilities based on
similar theories) arising out of any facts or circumstances occurring prior to
the Closing Date or Liability arising out of or attaching by virtue of
Transferor being a member of a controlled group or affiliated group of entities,
(v) the provisions of 29 U.S.C. ss. 1161-1168, as same may be amended from time
to time, and the regulations and rulings thereunder, with respect to the
employees of Transferor at the Cinema, and (vi) the oil spill on the Leased Real
Estate resulting from the removal of an underground storage tank.
7.3. INDEMNIFICATION BY TRANSFEREE. Transferee and CCG shall indemnify,
defend, save and hold Xx. Xxxxxx and Transferor and its officers, directors,
employees, Affiliates and agents (collectively, "Transferor 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; collectively, "Transferor Damages") asserted against, imposed upon,
resulting to, required to be paid by, or incurred by any Transferor Indemnitees,
directly or indirectly, in connection with, arising out of, resulting from, or
which would not have occurred but for, (i) a material breach of any
representation or warranty made by Transferee or CCG in this Agreement or in any
certificate or document furnished pursuant hereto by Transferee or CCG or any
Other Agreement to which Transferee or CCG is or is to become a party, and (ii)
a breach or nonfulfillment of any covenant or agreement made by any Transferee
or CCG in or pursuant to this Agreement and in any Other Agreement to which any
Transferee or CCG is or is to become a party.
7.4. WAIVER OF STATUTE OF LIMITATIONS. Each party hereto waives any
applicable statute of limitations that may be applicable to Damages arising
under clauses (iii), (iv) and (v) of Section 7.2 and clause (iii) of Section
7.3.
7.5. NOTICE OF CLAIMS. If any Transferee Indemnitee or Transferor
Indemnitee (an "Indemnified Party") believes that it has suffered or incurred or
will suffer or incur any 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.
7.6. THIRD PARTY CLAIMS. The Indemnifying 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 Indemnifying Party may compromise or settle
the same, provided that the Indemnifying Party shall give the Indemnified Party
advance notice of any proposed compromise or settlement. The
24
Indemnifying Party shall permit the Indemnified Party to participate in the
defense of any such action or suit through counsel chosen by the Indemnified
Party, provided that the fees and expenses of such counsel shall be borne by the
Indemnified Party (subject to reimbursement pursuant to SECTION 7.1 or 7.2, as
the case may be).
7.7. LIMITATION ON INDEMNIFICATION. No Indemnified Party shall be entitled
to make a claim for indemnification for inaccuracy in or breach of
representation or warranty pursuant to clause (I) of SECTION 7.2 until the
cumulative and aggregate amount of all Damages as a result of all matters
covered by clause (I) of SECTION 7.2 exceeds $10,000 (the "Basket Amount"). If
and when such damages do exceed the Basket Amount, then the Indemnified Party
shall be entitled to indemnification for all such damages in excess of the
Basket Amount. Any indemnification payment under this Agreement shall take into
account any insurance proceeds or other third party reimbursement actually
received (other than the proceeds of any self insurance or, to the extent it is
the economic equivalent of self insurance, any insurance that is retrospectively
rated).
7.8. PAYMENT. All indemnification payments under this ARTICLE VII shall be
made promptly in cash.
ARTICLE VIII.
MISCELLANEOUS
8.1. COSTS AND EXPENSES. Transferee and CCG, on the one hand, and
Transferor and Xx. Xxxxxx, on the other hand, shall each pay its respective
expenses, brokers' fees and commissions and expenses incurred in connection with
this Agreement and the transactions contemplated hereby, including all
accounting, legal and appraisal fees and settlement charges. All transfer taxes,
if any, incurred as a result of the transfer of the Transferred Assets shall be
paid by Transferor.
8.2. PRORATION OF EXPENSES. All accrued expenses associated with the
Leased Real Estate included in the Transferred Assets, such as rents and other
charges under the Lease Agreement, electricity, gas, water, sewer, telephone,
property taxes, security services and similar items, shall be prorated between
Transferee and Transferor as of the Closing Date. Transferee and Transferor
shall settle such amounts within 30 days after Closing.
8.3. BULK SALES. The parties hereto waive compliance with the provisions
of any bulk sales law applicable to the transactions contemplated hereby, and,
notwithstanding anything else in this Agreement to the contrary, Transferor
shall hold Transferee harmless from and against all claims asserted against the
Transferred Assets or the Transferee pursuant to such bulk sales laws.
Transferor agrees to pay timely its account creditors with respect to
liabilities not being assumed by Transferee hereunder.
8.4. FURTHER ASSURANCES. Transferor shall, at any time and from time to
time on and after the Closing Date, upon the reasonable request by Transferee
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,
25
conveyances and assurances as may be required or desirable for the better
conveying, transferring, assigning, delivering, assuring and confirming the
Transferred Assets to Transferee.
8.5. 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 fifth 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:
(i) if to Transferee, to:
0 Xxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxxxx 00000
Telecopy: (000) 000-0000
Attention: A. Xxxx Xxxx, President
with a required copy to:
Xxxxx X. Xxxxxx, Esq.
Xxxxxxxxxxx & Xxxxxxxx LLP
0000 Xxxxxx Xxxxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Telecopy: (000) 000-0000
(ii) if to Transferor, to:
Xx. Xxxxx X. Xxxxxx
Rialto Theatre of Westfield, Inc.
000-000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Telecopy:
with a required copy to:
Xxxxx X. Xxxxxx, Xx., Esquire
Buklad & Buklad
00 X. Xxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxx Xxxxxx 00000
Telecopy: (000) 000-0000
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.
8.6. CURRENCY. All currency references herein are to United States
dollars.
26
8.7. OFFSET; ASSIGNMENT; GOVERNING LAW. Transferee and CCG shall be
entitled to offset or recoup from amounts due to Transferor from Transferee or
CCG hereunder or under any Other Agreement against any obligations of Transferor
to Transferee or CCG hereunder or under any Other Agreement (including
Transferee Damages). 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 Transferee or CCG may
make such assignments to any Affiliate of Transferee or CCG provided that
Transferee or CCG remain liable hereunder, and, further, Transferee and CCG may
collaterally assign their rights hereunder to Provident Bank or other commercial
lending institution. This Agreement shall be governed by and construed in
accordance with the laws of New Jersey without regard to its conflict of law
doctrines.
8.8. 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. 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.
8.9. 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 Transferee Indemnitees and Transferor
Indemnitees and SECTION 8.10.
8.10. THIRD PARTY BENEFICIARY. No Person is an intended third party
beneficiary of this Agreement.
8.11. 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.
27
8.12. 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.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
XXXXX XXXXXX
/s/ Xxxxx Xxxxxx
---------------------------------
THE NEW BELLEVUE THEATER CORP.
By: /s/ Xxxxx Xxxxxx
------------------------------
Xxxxx Xxxxxx
Title: President
CLEARVIEW CINEMA GROUP, INC.
By: /s/ A. Xxxx Xxxx
------------------------------
A. Xxxx Xxxx
Title: President
CCC BELLEVUE CINEMA CORP.
By: /s/ A. Xxxx Xxxx
--------------------------------
A. Xxxx Xxxx
Title: President
28
LIST OF SCHEDULES AND EXHIBITS
Schedule 1.1P Permitted Encumbrances
Schedule 3.5 No Changes
Schedule 3.7 Undisclosed Liabilities
Schedule 3.8 Title; Business
Schedule 3.9 Litigation or Proceedings
Schedule 3.12 Leased Real Estate
Schedule 3.14 Insurance
Schedule 3.16 Employee Benefits
Schedule 3.17 Environmental Matters
Exhibit A Leased Real Estate/Lease Agreement
Exhibit B [Not Used]
Exhibit C Income Statements
Exhibit D Voting Trust Agreement
Exhibit E Registration Rights Agreement
Exhibit F Form of General Warranty Instrument of Assignment
Exhibit G Form of Opinion of Buklad & Buklad
Exhibit H Form of Opinion of Xxxxxxxxxxx & Xxxxxxxx LLP
[Schedules and Exhibits will be provided upon request.]
