Exhibit 10.42
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., and CCC Xxxxxxx Cinema Corp. (collectively, "CCG"), and Xxxxxxx
Cinema, Inc. (the "Transferor") and Xxxx Xxxxxxxx as escrow agent (hereinafter
referred to as the "Escrow Agent").
CCG and the Transferor have entered into an Agreement and Plan of
Reorganization dated May 29, 1996 (the "Agreement").
Pursuant to Section 2.06 of the Agreement, CCG and the Transferor wish to
establish an escrow account with a portion of the CCG Shares to secure the
obligations of the Transferor under Article VII of the Agreement.
CCG and the Transferor desire to deposit with the Escrow Agent the shares
of stock 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 Agreement), CCG shall
deposit with the Escrow Agent, 173 shares of stock of CCG (the "Escrow Fund").
For the purposes of calculating the number of shares to be distributed as a
result of a claim made under this Agreement, the shares shall be valued at book
value ("Book Value") per share computed on a fully diluted basis reflected in
CCG's most recent annual audited financial statements.
1.2 Notice of Claims. Subject to Sections 1.3 and 1.4 below, upon receipt
of notice from CCG (the "Notice") that any Transferee Indemnitee (as defined in
the 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 Transferee
Indemnitee an amount equal to the lesser of (i) the number of shares held in the
Escrow Fund or (ii) the number of shares specified in the Notice. Any Notice
shall specify with reasonable detail the reasons why the requesting party is
entitled to the disbursement, the dollar amount of such claim, and the
calculation setting forth the Book Value of the shares.
1.3 Notice of Dispute. Notwithstanding the foregoing, in the event that the
Transferor 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 Xxxx Xxxxxx or such other person as shall
have been designated by Xxxx Xxxxxx.
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 Xxxx Xxxxxx or such person as is designated by Xxxx Xxxxxx.
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 Transferor for distribution to the persons entitled thereto
in accordance with the 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
Transferor 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 I.
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 Transferor by facsimile and
certified mail. If the Transferor shall send a Certificate to the Escrow Agent,
the Transferor 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.
0 Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
Telecopy: (000) 000-0000
with a required copy to:
Xxxxxx X. Xxxxxxxx, Esquire
Xxxxxxxxxxx & Xxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Telecopy: (000) 000-0000
(ii) if to the Transferor, to:
Xxxx Xxxxxx
00 Xxxx Xxxx
Xxxxxxxxxxx, XX 00000
with a required copy to:
Xxxx Xxxxxxxx, Esquire
000 Xxxxx 00
Xxxxxxxxxx, XX 00000
Telecopy: (000) 000-0000
(iii) if to Escrow Agent, to:
Xxxx Xxxxxxxx, Esquire
000 Xxxxx 00
Xxxxxxxxxx, XX 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.
ARTICLE III
General Provisions.
3.1 CCG and the Transferor 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 Transferor (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 Xxxx Xxxxxxxx as Escrow Agent under this Agreement shall
not disqualify Xx. Xxxxxxxx from the representation the Transferor 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.
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WITNESS the due execution hereof the day and year first above written.
Clearview Cinema Group, Inc.
By: ____________________
A. Xxxx Xxxx,
President
ACCEPTED AND AGREED
Township of Washington Theatre, Inc.
Xxxxxxx Xxxxxxx Cinema, Inc.
New City Cinema, Inc.
By: ______________________
Xxxx Xxxxxx,
President
