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Exhibit 10(n)
DEPOSIT ESCROW AGREEMENT
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THIS DEPOSIT ESCROW AGREEMENT ("this Agreement") entered into as of the
17th day of December, 1997, by and among REGENT BROADCASTING OF VICTORVILLE,
INC., a Delaware corporation ("Buyer"), RUBY BROADCASTING, INC., a Delaware
corporation ("Seller"), TOPAZ BROADCASTING, INC., a Delaware corporation
("Topaz"), REGENT COMMUNICATIONS, INC., a Delaware corporation ("Regent"),
XXXXXX X. XXXXXX ("Xxxxxx") and SECURITY TITLE & GUARANTY, INC., as escrow agent
(the "Escrow Agent").
RECITALS:
A. Seller and Buyer have entered into an Asset Purchase Agreement dated
as of December 17, 1997 (the "Purchase Agreement"), pursuant to which Buyer has
agreed to purchase from Seller certain assets as described in the Purchase
Agreement. Buyer, Regent and Topaz have also entered into an Agreement of Merger
(the "Merger Agreement") dated as of December 17, 1997.
B. In accordance with Section 3.2 of the Purchase Agreement and Section
28 of the Merger Agreement, Buyer is prepared to deposit with the Escrow Agent
on and subject to the terms and conditions of this Agreement the sum of Four
Hundred Thousand Dollars ($400,000) or an irrevocable stand-by letter of credit
in the face amount of $400,000 as a source of funds for the payment to Seller of
liquidated damages as provided in Section 16.4 of the Purchase Agreement and
Section 29(a) of the Merger Agreement in the event that a Closing under the
Purchase Agreement is not consummated solely by reason of a material breach by
Buyer.
C. The Escrow Agent named above is willing to act as the escrow agent
hereunder on and subject to the terms and conditions of this Agreement.
NOW, THEREFORE, the parties agree as follows:
1. DEFINED TERMS. Capitalized terms used but not otherwise defined
herein shall have the same meanings herein as ascribed to them in the Purchase
Agreement, which is hereby incorporated herein by reference. "Business Days"
means any day which is not a Saturday, Sunday or federal holiday. Periods of
days referred to in this Agreement will be counted in calendar days unless
Business Days are expressly prescribed.
2. ESTABLISHMENT AND MAINTENANCE OF ESCROW FUND. Escrow Agent hereby
acknowledges receipt of either (a) the sum of Four Hundred Thousand Dollars
($400,000) or (b) an irrevocable, stand-by letter of credit in the amount of
Four Hundred Thousand Dollars ($400,000) (said cash deposit or letter of credit
and any cash proceeds thereof and any income earned on such cash proceeds while
on deposit hereunder being referred to as the "Escrow Fund"). Escrow Agent
agrees to hold, invest and disburse the Escrow Fund for the benefit of Buyer and
Seller, their
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respective successors and assigns, as provided herein. The Escrow
Fund shall be released by the Escrow Agent only in accordance with the terms and
conditions hereinafter set forth.
3. RELEASE OF ESCROW FUND.
(a) At the time and place of the Closing under the Purchase
Agreement and Merger Agreement, and simultaneously with the performance by Buyer
and Seller of their respective obligations under the Purchase Agreement and
Merger Agreement, Buyer and Seller shall instruct the Escrow Agent to deliver or
pay the Escrow Fund to Buyer.
(b) On the twentieth (20th) day after Escrow Agent's receipt
of written notice from Seller (with evidence of service of such notice on Buyer)
that (i) the Purchase Agreement has been terminated pursuant to Section 16.1.3
of the Purchase Agreement or pursuant to Section 29(a) of the Merger Agreement
solely because of Buyer's material breach of the Purchase Agreement or Merger
Agreement which was not cured within any applicable cure period, and (ii) all
other conditions to Closing that are within Seller's or Topaz's control, as the
case may be, are at such time satisfied or waived (other than such conditions as
can reasonably be expected to be satisfied by the Closing) ("Seller's Notice"),
Escrow Agent shall deliver the Escrow Fund to Seller; provided, however, that
Escrow Agent shall make no such delivery if Buyer, prior to the expiration of
the aforesaid 20-day period, has provided notice to Escrow Agent and Seller of
its countervailing claim to the Escrow Fund or otherwise claims that Seller is
not entitled to the Escrow Fund for any reason ("Buyer Rebuttal Notice").
(c) On the twentieth (20th) day after Escrow Agent's receipt
of written notice from Buyer (with evidence of service of such notice on Seller)
that the Purchase Agreement has been terminated for any reason other than the
circumstances described in Section 3(a) or (b) above ("Buyer's Notice"), Escrow
Agent shall deliver the Escrow Fund to Buyer; provided, however, that Escrow
Agent shall make no such delivery if Seller, prior to the expiration of the
aforesaid 20-day period, has provided notice to Escrow Agent and Buyer of
Seller's countervailing claim to the Escrow Fund or otherwise claims that Buyer
is not entitled to the Escrow Fund for any reason ("Seller's Rebuttal Notice").
(d) After timely receipt by Escrow Agent of Seller's Rebuttal
Notice or Buyer's Rebuttal Notice, Escrow Agent shall not deliver the Escrow
Fund until such time as Escrow Agent receives: (a) a written agreement signed by
Seller and Buyer providing instructions as to the disposition of the Escrow
Fund, or (b) a certified copy of an order or judgment from an arbitrator or
court which has become final (meaning that the order or judgment is no longer
subject to appeal to or review by a court of competent jurisdiction) with
respect to the disposition of the Escrow Fund, at which time, Escrow Agent shall
deliver the Escrow Fund in accordance with said agreement, order or judgment.
Any interest earned on the Escrow Fund in all events shall be delivered to
Seller at the termination of this Agreement.
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(e) Notwithstanding any other provision of this Escrow
Agreement, Escrow Agent shall, upon receipt of written instructions signed
jointly by Seller and Buyer, deliver the Escrow Fund to the party or parties
named in, or otherwise act in accordance with such instructions.
(f) In the event there has not been delivered to the Escrow
Agent, if applicable, a renewed and extended letter of credit within thirty (30)
days prior to of the expiration date of any letter of credit then on deposit,
the Escrow Agent shall, and is hereby irrevocably authorized and directed
without notice to or further action from Buyer or Seller and without regard to
any contrary instructions from either Buyer or Seller, to draw on said letter of
credit in full and to accept and hold the proceeds therefrom in escrow pursuant
to the terms of this Agreement, in which event the cash proceeds, and all
interest earned thereon, shall be deemed to be the Escrow Fund.
4. DISPUTE. In the event of any dispute among any of the parties to
this Agreement, including with respect to Buyer's or Seller's disputed claim to
the Escrow Fund or the interpretation or administration of this Agreement, the
Escrow Agent shall make no delivery or other disposition of the Escrow Fund
until it has received (i) written instructions executed by both Buyer and
Seller, or (ii) a certified copy of an order or judgment from an arbitrator or
court which has become final (meaning that the order or judgment is no longer
subject to appeal to or review by a court of competent jurisdiction) with
respect to the disposition of the Escrow Fund, whereupon Escrow Agent shall
deliver the Escrow Fund in accordance with such joint written instructions,
order or judgment.
5. TERMINATION OF THE ESCROW FUND. The Escrow Agreement shall
terminate:
(a) On the date on which the entire Escrow Fund shall have
been paid to or for the account of Buyer or Seller pursuant to the provisions of
this Agreement; or
(b) On the date on which the entire Escrow Fund shall have
been tendered to a court pursuant to Section 15 of this Agreement.
Upon disbursement by the Escrow Agent of all of the Escrow Fund as
provided in this Agreement, the duties of the Escrow Agent under this Agreement
shall be completed and the Escrow Agent shall have no further obligation, duty,
or liability under, or arising out of, this Agreement to any other party hereto.
6. JOINT INSTRUCTIONS. Notwithstanding anything herein to the contrary,
the Escrow Agent may act upon any written instructions given by Buyer and Seller
jointly.
7. INVESTMENTS OF ESCROW FUND. Prior to the final distribution of the
Escrow Fund upon termination of this Agreement as provided in Section 5 hereof,
the Escrow Agent shall invest and reinvest any cash portion of the Escrow Fund
in savings accounts, money market accounts or secured certificates of deposit in
United States banks, or securities issued or guaranteed by the United States
Government, as may from time to time be directed by Seller. In the absence of
direction from Seller as to investments, the Escrow Agent shall invest and
reinvest the cash Escrow
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Fund in federally insured savings accounts. The Escrow Agent shall not be liable
for any damages, losses or expenses resulting from any investment, or the sale
or redemption of any investment, made in accordance with this Section 7.
8. PROVISIONS RELATING TO ESCROW AGENT. The Escrow Agent shall serve
hereunder without compensation. The Escrow Agent agrees to hold the Escrow Fund
under the terms and conditions of this Agreement and to perform only the acts
and duties expressly imposed upon it hereby. The Escrow Agent's duties under
this Agreement will not in any way be modified, amended, amplified or increased
by reference to any document, instrument or agreement referred to herein or
whose terms or definitions are incorporated or referenced herein. The Escrow
Agent will be under no obligation to institute or defend any action, suit or
legal proceeding in connection herewith or to take any other action likely to
involve it in expense unless it has been first indemnified to its satisfaction.
The Escrow Agent will have no duty to take notice and will not be charged with
knowledge or notice of the existence of any agreement, understanding or other
arrangement or of any facts not set forth or referred to in this Agreement or in
any properly written, signed and delivered notices or demands to it as herein
provided. In the event of the receipt by the Escrow Agent of any notice or
demand not provided for in, or in compliance with, this Agreement or of any
inconsistent or conflicting notices or demands, the Escrow Agent will be
protected in taking no action whatsoever with reference to such notice of
demand. The Escrow Agent shall not be liable to anyone for any damages, losses,
or expenses which may be incurred as a result of any act or omission of the
Escrow Agent except to the extent, but only to the extent, of any direct, as
opposed to consequential, damages suffered which are caused by the Escrow
Agent's willful misconduct or gross negligence. Accordingly, the Escrow Agent
shall not incur any such liability with respect to (i) any action taken or
omitted in good faith upon the advice of counsel or counsel for any other party
hereto, given with respect to any question relating to the duties and
responsibilities of the Escrow Agent under this Agreement or (ii) any action
taken or omitted in reliance upon any instrument, including execution, or the
identity or authority of any person executing such instrument, its validity and
effectiveness, but also as to the truth and accuracy of any information
contained therein which the Escrow Agent shall, in good faith, believe to be
genuine, to have been signed by a proper person or persons and to conform to the
provisions of this Agreement. If the Escrow Agent shall determine in its sole
discretion to require receipts for delivery of any Escrow Fund or any portion
thereof, the Escrow Agent shall be under no duty to deliver the Escrow Fund or
any portion thereof unless the person to whom delivery is to be made executes
and delivers to the Escrow Agent a receipt in form acceptable to the Escrow
Agent. The Escrow Agent shall not be required to obtain any such receipt.
9. NOTICES. All notices, demands and other communication which may or
are required to be given hereunder or with respect hereto shall be in writing
and shall be addressed and given in accordance with the provisions of Section
17.9 of the Purchase Agreement, as if such Section 17.9 were fully written
herein. All notices, demands and other communications given hereunder shall be
addressed to the Escrow Agent as follows:
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Security Title & Guaranty, Inc.
2100 PNC Center, 000 X. Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000-0000
Attn: Xxxxxxx X. Xxxxxxx, Esq.
Fax: (000) 000-0000
10. BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns.
No party shall assign its rights or obligations under this Agreement, by
operation of law or otherwise, without the written consent of the other parties.
11. INDEMNITY OF ESCROW AGENT. Seller and Buyer hereby jointly and
severally agree to indemnify the Escrow Agent and hold the Escrow Agent and its
officers, directors, employees, affiliates, and agents (collectively the
"Indemnified Parties" and, individually, as "Indemnified Party") harmless
against any and all actions, causes of action, suits, demands, investigations,
obligations, judgments, losses, costs, liabilities, damages, and expenses
(irrespective of whether such Indemnified Party is a party to the action for
which indemnification hereunder is sought) including, but not limited to,
reasonable attorneys' fees at customary hourly rates which are incurred by,
accrued, asserted, made or brought against, charged to, or recoverable from the
Indemnified Parties or any of them as a result of, or arising out of, or
relating to, or as a direct or indirect result of this Agreement or any and all
claims, actions, settlement or liability for acts or failure to act in
connection with this Agreement, excepting, however, any such loss or expense to
the extent, but only to the extent, of any direct, as opposed to consequential,
damages suffered which are caused by the Escrow Agent's gross negligence or its
willful misconduct.
12. COUNTERPARTS. This Agreement and any notices delivered pursuant
hereto may be executed simultaneously in two or more counterparts, each of which
shall be deemed an original, and it shall not be necessary in making proof of
this Agreement or any such notices to produce or account for more than one such
counterpart.
13. GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with the laws of the State of California without regard to the
conflict of law provisions thereof. EACH OF THE PARTIES HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
IN ANY WAY TO THIS AGREEMENT, INCLUDING ANY COUNTERCLAIM MADE IN SUCH ACTION OR
PROCEEDING, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE DECIDED
SOLELY BY A JUDGE IN THE COUNTY OF LOS ANGELES, CALIFORNIA. Each of the parties
hereto hereby acknowledges that it has been represented by counsel in the
negotiation, execution and delivery of this agreement and that its lawyers have
fully explained the meaning of the agreement, including in particular the
jury-trial waiver.
14. RESIGNATION. The Escrow Agent may resign as Escrow Agent at any
time and for any reason upon fifteen (15) days' prior written notice to Buyer
and Seller. In the event the Escrow
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Agent resigns as provided above, the Escrow Agent shall deliver the Escrow Fund
to the person or entity designated in writing by Buyer and Seller as a
replacement escrow agent hereunder (or if Buyer and Seller have not provided
Escrow Agent with written notice of a designated replacement escrow agent within
said 15-day period, to a bank or trust company chosen by Escrow Agent), provided
that such person or entity executes an addendum to this Agreement agreeing to
act as Escrow Agent hereunder and to be bound by the terms of the Agreement.
Upon such delivery of the Escrow Funds to such replacement escrow agent, the
Escrow Agent will be discharged from any and all further duties, obligations,
and liabilities under this Agreement, except to the extent, but only to the
extent, of any direct, as opposed to consequential, damages suffered which are
caused by Escrow Agent's prior willful misconduct or gross negligence. Promptly
upon receipt of said notice of resignation, Buyer and Seller shall promptly
agree on a bank, trust company, or other entity or person to serve as a
replacement new escrow agent hereunder and notify Escrow Agent thereof in
writing.
15. INTERPLEADER. In the event of any disagreement among the parties to
this Agreement, or among them or any other person resulting in adverse claims
and demands being made in connection with or from any property involved herein
or affected hereby, the Escrow Agent may, but need not, tender into the registry
or custody of any court of competent jurisdiction all money or property in its
hands under the terms of this Agreement, together with such legal proceedings as
it deems appropriate and thereupon to be discharged from all further duties,
obligations, and liabilities under this Agreement, except to the extent, but
only to the extent, of any direct, as opposed to consequential, damages suffered
which are caused by Escrow Agent's prior willful misconduct or gross negligence.
IN WITNESS WHEREOF, each of the parties hereto has executed this Escrow
Agreement by its duly authorized officer, as of the day and year first above
written.
SELLER:
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RUBY BROADCASTING, INC.
By: ____________________________________
Name: ____________________________________
Title: ____________________________________
BUYER:
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REGENT BROADCASTING OF VICTORVILLE, INC.
By: ____________________________________
Name: ____________________________________
Title: ____________________________________
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ESCROW AGENT:
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SECURITY TITLE & GUARANTY, INC.
By: ____________________________________
Name: ____________________________________
Title: ____________________________________
REGENT COMMUNICATIONS, INC.
By: ____________________________________
Name: ____________________________________
Title: ____________________________________
TOPAZ BROADCASTING, INC.
By: ____________________________________
Name: ____________________________________
Title: ____________________________________
XXXXXX X. XXXXXX
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