Exhibit 10.38
ESCROW AGREEMENT
This Escrow Agreement ("Escrow Agreement") made and entered into as of
the 8 day of September, 1995 by and among Cinema Grand Ave., Inc., a New York
corporation ("GAI"), and Triplex Movies at Port Washington, Inc. a New York
corporation ("PWI," and together with GAI, the "GG Group") and Clearview Cinema
Group, Inc. a Delaware corporation ("CCG"), CCC Grand Avenue Cinema Corp., a
Delaware corporation ("GACC"), and CCC Port Washington Cinema Corp., a Delaware
corporation ("PWCC," and together with CCG and GACC, the "Clearview Group") and
Hollenberg, Levin, Solomon, Ross and Belsky, LLP as escrow agent (hereinafter
referred to as the "Escrow Agent");
The Clearview Group and the GG Group have entered into an Agreement
dated the date hereof (the "Agreement") that requires that the Clearview Group
and the GG Group to place certain funds and documents into escrow with the
Escrow Agent to be held and disbursed in accordance with the terms and
conditions of that Agreement.
The Clearview Group and the GG Group desire to deposit with the Escrow
Agent the funds and documents described herein to be distributed as set forth
herein.
In consideration of the foregoing and the mutual covenants set forth
herein, and intending to be legally bound hereby, the parties hereto agree as
follows:
ARTICLE I
Deliveries to the Escrow Agent.
1.1 Escrow Fund. Simultaneously with the execution of this Escrow
Agreement, the Clearview Group is depositing with the Escrow Agent, the
principal sum of Two Thousand Forty-one Thousand, Two Hundred Forty Thousand
Dollars ($240,000) (the "Principal Amount"). The Principal Amount and any
interest thereon, are hereinafter collectively referred to as the "Escrow Fund".
The Escrow Agent shall subject to collection of the Principal Amount invest the
assets in the Escrow Fund in certificates of deposit at the Stewart Avenue
Garden City Branch of Fleet Bank in an account entitled Security Deposit of
Clearview Cinema Group, Inc., CCC Grand Avenue Cinema Corp. and CCC Port
Washington Cinema Corp. for the benefit of the GG Group pursuant to Escrow
Agreement, dated September 8, 1995. The Clearview Group may, from time to time,
deposit additional funds with the Escrow Agent; provided, however, that the
maximum amount of Escrowed Funds held at a particular time shall not exceed
$240,000, plus accrued interest.
1.2 Escrowed Documents. Simultaneously with the execution of this
Escrow Agreement, (i) the GG Group is delivering to the Escrow Agent (a)
assignments of Grand Avenue and Port Washington Leases duly executed by the GG
Group and (b) a general warranty bill of sale and instrument of assignment duly
executed by the GG Group, and (ii) the Clearview Group is delivering to the
Escrow Agent simultaneously with the execution of this Agreement an assignment
of rights of the Clearview Group.
ARTICLE II
Disposition of the Escrow Fund and Documents.
2.1 Use of Escrow Funds. The rights of each of the GG Group and the
Clearview Group to the Escrow Funds shall be as set forth in the Agreement. The
Clearview Group covenants that it will not assign or encumber or attempt to
assign or encumber the Escrow Funds and neither the Escrow Agent nor its
successors or assigns shall be bound by any such assignment, encumbrance,
attempted assignment or attempted encumbrance.
2.2 Request of the Parties. Upon receipt of written request (the
"Request") from either of the GG Group or the Clearview Group (each an
"Instructing Party") to disburse funds and/or documents, the Escrow Agent shall
immediately deliver by facsimile and certified mail a copy of the Request to the
other of the Clearview Group or the GG Group (each an "Instructed Party"). If,
within the ten business day period following the delivery of the Request to the
Instructed Party the Instructed Party shall not have delivered to the Escrow
Agent a written objection to the Request, the Escrow Agent shall disburse funds
and documents in accordance with the Request.
2.3 Expiration of the Agreement. The Escrow Agent shall pay the Escrow
Fund directly to the Clearview Group as soon as shall be practicable after the
Termination Date (as defined in Section 4.1), unless, as of the Termination
Date, the Escrow Agent shall (i) have pending before it any request to pay any
of the Escrow Fund pursuant to any other Section of this Escrow Agreement or
(ii) have filed an interpleader action pursuant to Section 4.4 of this Escrow
Agreement.
ARTICLE III
Delivery of Notices; Statements.
3.1 If the GG Group shall send any certificate, notice, request,
demand and other communication ( each a "Certificate") to the Escrow Agent, the
GG Group shall
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simultaneously send such Certificate to the Clearview Group by facsimile and
certified mail. If the Clearview Group shall send a Certificate to the Escrow
Agent, the Clearview Group shall simultaneously send such Certificate to the GG
Group by facsimile and certified mail.
3.2 All certificates, notices, requests, demands and other
communications hereunder or with respect hereto shall be in writing and shall be
deemed to have been duly given or made upon the second business day after the
date of mailing, if delivered by certified mail, postage prepaid, i) upon
delivery, if sent by hand delivery, ii) upon delivery, if sent by prepaid
courier or overnight service (such as Federal Express), with a record of
receipt, or iii) 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 the Clearview Group, to:
Clearview Cinema Group, Inc.
7 Waverly Place
Madison, NJ 07940
Telecopy: (201) 377-4303
with a required copy to:
Warren H. Colodner, Esquire
Kirkpatrick & Lockhart LLP
1251 Avenue of the Americas
New York, New York 10020
Telecopy: (212) 536-3901
(ii) if to the GG Group, to:
Carmi Djiji
30 Wren Drive
Roslyn, New York 11576
Telecopy: (516) 627-3302
with a required copy to:
Herbert W. Solomon
Hollenberg, Levin, Solomon, Ross
and Belsky, LLP
585 Stewart Avenue
Garden City, NY 11530
Telecopy: (516) 745-6642
(iii) if to Escrow Agent, to:
Herbert W. Solomon
Hollenberg, Levin, Solomon, Ross
and Belsky, LLP
585 Stewart Avenue
Garden City, NY 11530
Telecopy: (516) 745-6642
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.
3.3 The Escrow Agent shall promptly deliver or cause to be delivered
to the Clearview Group and to the GG Group monthly bank statements reflecting
the status of and any activity in the account.
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ARTICLE IV
General Provisions
4.1 If not sooner terminated by the written consent of both the GG
Group and the Clearview Group, this Escrow Agreement shall terminate on August
31, 2000 or later, if required pursuant to the Escrow Agent's obligations under
this Agreement (the "Termination Date").
4.2 The Clearview Group and the GG Group agree to indemnify Escrow
Agent and hold it harmless from any loss or liability, including reasonable
attorneys' fees and expenses, arising from its service as Escrow Agent hereunder
and any actions taken pursuant hereto, except for losses or liabilities arising
from Escrow Agent's fraud, gross negligence or willful misconduct. The
provisions of this Section 4.2 relating to indemnity of the Escrow Agent shall
survive the Termination Date and the final disbursement of the Escrow Fund or
the sooner expiration of this Escrow Agreement or removal of the Escrow Agent
for any reason.
4.3 In the absence of fraud on its part, Escrow Agent shall be
entitled to rely conclusively, as to the truth of the statements contained
therein, upon any certificate, notice, authorization or other document delivered
to it hereunder which it reasonably believes to be in conformity with the
requirements of this Escrow Agreement and to be genuine and to have been signed
by any authorized representative of the Clearview Group or the GG Group (as the
case may be) from time to time. The Escrow Agent need not investigate any
factual matters averred or stated in any such certificate, notice, authorization
or other document; provided, however, that Escrow Agent shall examine each such
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document to determine whether it conforms to the requirements of this Escrow
Agreement.
4.4 If Escrow Agent in good faith is in doubt as to what actions
should be taken hereunder, Escrow Agent shall have the absolute right to deposit
the Escrow Fund with the Clerk of the Supreme Court of Nassau County in
accordance with CPLB 1006 and upon such deposit the Escrow Agent shall be
released from all liability under this Escrow Agreement.
4.5 The service of Hollenberg, Levin, Solomon, Ross and Belsky, LLP as
Escrow Agent under this Agreement shall not disqualify Hollenberg, Levin,
Solomon, Ross and Belsky, LLP from the representation of Carmi Djiji or any of
the GG Group in any matter, including but not limited to, any dispute relating
to this Escrow Agreement.
4.6 The Clearview Cinema Group, Inc. shall file tax
returns reflecting the interest earned on the Escrow Funds, and
shall pay any and all taxes due on the income to Clearview
Cinema Group, Inc. on account of the interest earned on the
Escrow Funds. Its Taxpayer Identification Number is
_______________.
4.7 During the term of the Agreement, the Escrowed Funds shall be held
for the benefit of the GG Group pursuant to the terms of the Agreement, and
shall not be subject to the rights of any trustee, creditor, or other person
with respect to the Clearview Group in any bankruptcy, reorganization,
insolvency or receivership proceeding.
4.8 This Escrow Agreement shall inure to the benefit of, and be
binding upon, the parties hereto and their respective successors. The Clearview
Group may not assign its rights under this Agreement. This Escrow Agreement is
not intended to confer upon any person other than the parties hereto any rights
or remedies hereunder.
4.9 This Escrow Agreement may not be revoked, rescinded or modified as
to any of its terms or conditions except upon consent in writing of all the
parties hereto.
4.10 This Escrow Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, and all of which shall
together constitute one and the same instrument.
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WITNESS the due execution hereof the day and year first above written.
Cinema Grand Ave., Inc.
By:_________________________
Title:___________________
Triplex Movies at Port
Washington, Inc.
By:_________________________
Title:___________________
Clearview Cinema Group, Inc.
By:_________________________
Title:___________________
CCC Grand Avenue Cinema Corp.
By:_________________________
Title:___________________
CCC Port Washington Cinema
Corp.
By:_________________________
Title:___________________
Hollenberg, Levin, Solomon,
Ross and Belsky, LLP
By:_________________________
Title:___________________
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