Exhibit 10.44
INDEMNIFICATION ESCROW AGREEMENT
This Indemnification Escrow Agreement ("Escrow Agreement") is made and
entered into as of the 29th day of May, 1996 by and among Clearview Cinema
Group, Inc., CCC Washington Cinema Corp., CCC Allwood Cinema Corp., and CCC New
City Cinema Corp. (collectively, "CCG"), and Township of Washington Theatre,
Inc. ("Washington"), Allwood Clifton Cinema, Inc. ("Allwood"), and New City
Cinema, Inc. ("New City" and collectively with Washington, and Allwood, the
"Seller Group") and Jack Wenarsky as escrow agent (hereinafter referred to as
the "Escrow Agent").
CCG and the Seller Group have entered into an Asset Purchase Agreement
dated May 29, 1996 (the "Asset Purchase Agreement").
Pursuant to Section 2.06 of the Asset Purchase Agreement, CCG and the
Seller Group wish to establish an escrow account with a portion of the purchase
price to secure the obligations of the Sellers under Article VII of the Asset
Purchase Agreement.
CCG and the Seller Group desire to deposit with the Escrow Agent the funds
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. At the Closing (as defined in the Asset Purchase
Agreement), CCG shall deposit with the Escrow Agent, the principal sum of
$100,000 (the "Principal Amount"). The Principal Amount and any interest thereon
are hereinafter collectively referred to as the "Escrow Fund". The Escrow Agent
shall place the Principal Amount in his trust account.
1.2 Notice of Claims. Subject to Sections 1.3 and 1.4 below, upon receipt
of notice from CCG (the "Notice") that any Purchaser Indemnitee (as defined in
the Asset Purchase Agreement) is entitled to a payment pursuant to Article VII
of the Agreement and the amount thereof, the Escrow Agent shall, at least 10
days but not more than 15 days following receipt of such notice, disburse to
such Purchaser Indemnitee an amount equal to the lesser of (i) the balance of
the Escrow Fund or (ii) the amount specified in the Notice. Any Notice shall
specify with reasonable detail the reasons why the requesting party is entitled
to the disbursement.
1.3 Notice of Dispute. Notwithstanding the foregoing, in the event that the
Seller Group objects to the disbursement of any portion of the Escrow Fund, they
shall so notify Escrow Agent not more than 9 days from the date of the Notice.
Any objection shall specify with
reasonable detail the reasons why the objecting party is objecting to the
disbursement. Such a dispute shall be resolved in the manner set forth in
Section 1.4 below and Escrow Agent shall continue to hold the Escrow Fund until
it has received a nonappealable court order from a court of competent
jurisdiction directing the disposition of such property, or until it has
received appropriate written instructions signed by both CCG and by John Nelson
or such other person as shall have been designated by John Nelson.
1.4 Uncertainty. In the event that Escrow Agent, in good faith, shall be in
doubt as to what action it should take hereunder, Escrow Agent may, at its
option, refuse to comply with any claims or demands on it or refuse to take any
other action hereunder, so long as such disagreement continues or such doubt
exists; and in any such event, Escrow Agent shall not be or become liable in any
way or to any person for its failure or refusal to act, and Escrow Agent shall
be entitled to continue to so refrain from acting until it has received (a) a
nonappealable court order from a court of competent jurisdiction directing the
disposition of such property, or (b) appropriate written instructions signed
both by CCG and by John Nelson or such person as is designated by John Nelson.
1.5. Final Disbursement. On the first anniversary of the date hereof, the
Escrow Agent shall set aside and retain in escrow any amount specified in a
Notice theretofore received from CCG pursuant to Section 1.2 and not theretofore
disbursed or otherwise resolved and shall disburse the remainder of the Escrow
Fund, if any, to the Seller Group for distribution to the persons entitled
thereto in accordance with the Asset Purchase Agreement. Once the claim set
forth in any such Notice has been determined, the Escrow Agent shall distribute
the amount of such claim as finally determined or agreed to CCG and shall
distribute the remainder to the Seller Group as set forth in the preceding
sentence.
1.6. Time of Essence. The parties agree that time is of the essence with
respect to all deliveries referenced in this Article 1.
ARTICLE II
Delivery of Notices; Statements.
2.1 If CCG shall send any certificate, notice, request, demand and other
communication (each a "Certificate") to the Escrow Agent, CCG shall
simultaneously send such Certificate to the Seller Group by facsimile and
certified mail. If the Seller Group shall send a Certificate to the Escrow
Agent, the Seller Group shall simultaneously send such Certificate to CCG by
facsimile and certified mail.
2.2 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 (i) upon the second business day after the date of
mailing, if delivered by certified mail, postage prepaid, (ii) upon delivery, if
sent by hand delivery, 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 CCG, 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, NY 10020
Telecopy: (212) 536-3901
(ii) if to the Seller Group, to:
John Nelson
93 Hope Road
Blairstown, NJ 07825
with a required copy to:
Jack Wenarsky, Esquire
225 Route 10
Succasunna, NJ 07876
Telecopy: (201) 927-5252
(iii) if to Escrow Agent, to:
Jack Wenarsky, Esquire
225 Route 10
Succasunna, NJ 07876
Telecopy: (201) 927-5252
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.
ARTICLE III
General Provisions.
3.1 CCG and the Seller Group agree to indemnify Escrow Agent and hold him
harmless from any loss or liability, including reasonable attorneys' fees and
expenses, arising from
his 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 3.1 relating to indemnity of the Escrow Agent
shall survive the termination of this Escrow Agreement and the final
disbursement of the Escrow Fund.
3.2 In the absence of fraud on his 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 him hereunder
that he 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 CCG or the Seller Group (as the case may be) from time to
time, unless the Escrow Agent shall have received timely objection to such
certificate, notice, authorization or document pursuant to Section 1.3 hereof.
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 document to determine whether
it conforms to the requirements of this Escrow Agreement.
3.3 The service of Jack Wenarsky as Escrow Agent under this Agreement shall
not disqualify Mr. Wenarsky from the representation the Seller Group in any
matter, including but not limited to, any dispute relating to this Escrow
Agreement.
3.4 This Escrow Agreement shall inure to the benefit of, and be binding
upon, the parties hereto and their respective successors. This Escrow Agreement
may not be assigned with the written consent of the parties hereto. This Escrow
Agreement is not intended to confer upon any person other than the parties
hereto any rights or remedies hereunder.
3.5 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.
3.6 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.
WITNESS the due execution hereof the day and year first above written.
Clearview Cinema Group, Inc.
By:
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A. Dale Mayo
President
ACCEPTED AND AGREED
Township of Washington Theatre, Inc.
Allwood Clifton Cinema, Inc.
New City Cinema, Inc.
By:
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John Nelson
President