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EXHIBIT 10.31
DEPOSIT ESCROW AGREEMENT
THIS DEPOSIT ESCROW AGREEMENT (this "Escrow Agreement") is
made and entered into as of the 8th day of July 1997, by and among STC
Broadcasting, Inc., a Delaware corporation (the "Buyer"), Xxxxxxx X. Xxxxxxx,
the Xxxxx Xxxxx Trust, the Xxxxxxxxx Xxxxx Testamentary Trust, the Xxxxx Xxxxxx
GST Exempt Trust, the Xxxxxxx Xxxxxx Trust, Xxxx X. Xxxxxx and the Xxxx Xxxxxx
Trust (the foregoing individuals and trusts shall be referred to herein
collectively as the "Sellers," and together with the Buyer, the "Undersigned"),
and Xxxxxx Xxxxx Bank ("Escrow Agent").
RECITALS
A. The Buyer, Abilene Radio and Television Company, a Delaware
corporation (the "Company"), and the Sellers have entered into a Stock Purchase
Agreement, dated as of the date hereof (the "Purchase Agreement"), pursuant to
which the Sellers have agreed to sell, assign, transfer, convey and deliver to
the Buyer, and the Buyer has agreed to purchase from the Sellers, all the
capital stock of the Company, all in accordance with and subject to the terms
and conditions set forth in the Purchase Agreement;
B. Pursuant to the Purchase Agreement, the Buyer is required to
deliver to the Escrow Agent an original, irrevocable letter of credit (the
"Letter of Credit") issued for the benefit of Sellers in the amount of $425,000
in the form attached hereto as Appendix A;
C. As a condition to the execution of the Purchase Agreement, the
Undersigned have agreed to execute and deliver this Escrow Agreement; and
D. Unless otherwise defined herein, capitalized terms used herein
shall have the meanings assigned to them in the Purchase Agreement.
AGREEMENTS
Accordingly, in consideration of the recitals and of the respective
agreements and covenants contained herein and in the Purchase Agreement, and
intending to be legally bound hereby, the parties agree as follows:
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ARTICLE I
Section 1.1 Letter of Credit Escrow.
(a) Contemporaneously with the execution of this Escrow
Agreement, Buyer has delivered the Letter of Credit to Escrow Agent, pursuant
to the provisions of the Purchase Agreement.
(b) The Letter of Credit, any proceeds from the Letter of
Credit payable by its terms to the Escrow Agent and any interest or income
accrued thereon (the "Funds") are referred to herein as the "Escrowed
Property". The Escrowed Property shall be held, administered and disposed of
by the Escrow Agent in accordance with the terms and conditions hereinafter set
forth.
Section 1.2 Acceptance of Appointment as Escrow Agent. Escrow Agent,
by signing this Escrow Agreement, accepts its appointment as escrow agent with
respect to the Escrowed Property and agrees to hold and deliver the Escrowed
Property in accordance with the terms of this Escrow Agreement.
Section 1.3 Delivery of Letter of Credit to Sellers. Not more than
three (3) business days after (a) the delivery to Escrow Agent of written
instructions signed by Sellers' Representative and Buyer stating that the
Letter of Credit is to be delivered to Sellers, or (b) the delivery to Escrow
Agent of a copy of a Final Determination (as defined below) establishing
Sellers' right to the Letter of Credit, Escrow Agent shall deliver the Letter
of Credit to Sellers as provided in such instructions or Final Determination.
A "Final Determination" shall mean a final non-appealable judgment of a court
of competent jurisdiction. The Escrow Agent, at its option, shall be entitled
to seek and, if received, rely conclusively upon a written opinion of legal
counsel to the effect that a Final Determination delivered to the Escrow Agent
pursuant to this Escrow Agreement satisfies the requirements hereof.
Section 1.4 Delivery of Letter of Credit to Buyers. Except as
otherwise provided in the last sentence of this Section 1.4, not more than
three (3) business days after (a) the delivery to Escrow Agent of written
instructions signed by Buyer and Sellers' Representative stating that the
Letter of Credit is to be delivered to Buyer, or (b) the delivery to Escrow
Agent of a copy of a Final Determination establishing Buyer's right to the
Letter of Credit, Escrow Agent shall deliver the Letter of Credit to Buyer. At
the Closing, simultaneously upon receipt by Escrow Agent of written
instructions signed by Buyer and Sellers' Representative stating that the
Letter of Credit is to be delivered to Buyer, the Escrow Agent shall deliver
the Letter of Credit to Buyer or its representative.
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Section 1.5 Replacement of Letter of Credit.
Buyers may provide to Sellers' Representative for Sellers'
approval at least forty-five (45) calendar days before the expiration of the
Letter of Credit a form of a substitute Letter of Credit in a form
substantially identical to Appendix A (with an identical expiration date to the
then existing Letter of Credit) issued by the issuer of the original Letter of
Credit or by a United States bank having assets and a net worth (as established
by the most recent public financial information of such bank, copies of which
shall be provided by Buyer to Sellers' Representative) equal to or greater than
the bank which issued the then existing Letter of Credit, together with a
statement signed by Buyer, in each case, certifying that such substitute Letter
of Credit will comply with the foregoing requirements. If Sellers'
Representative approves such form of substitute Letter of Credit in writing
(such approval not to be unreasonably withheld, conditioned or delayed), and
Buyer delivers to Escrow Agent an original of such substitute Letter of Credit
(duly executed by the issuing bank) and Sellers' Representative's written
approval, at least thirty (30) calendar days before the expiration of the
Letter of Credit, such substitute Letter of Credit shall thereafter be deemed
the "Letter of Credit" for all purposes hereunder; and if a substitute Letter
of Credit is being provided, the Escrow Agent shall simultaneously exchange the
prior Letter of Credit for the substituted Letter of Credit and give receipts,
if requested by Buyer, for the same.
ARTICLE II
ESCROW AGENT
Section 2.1 Language Concerning the Escrow Agent. To induce the
Escrow Agent to act hereunder, it is further agreed by the Undersigned that:
(a) The Escrow Agent shall not be under any duty to give
the Escrowed Property any greater degree of care than it gives its own similar
property and shall not be required to invest any funds held hereunder except as
directed in this Escrow Agreement. Uninvested funds held hereunder shall not
earn or accrue interest.
(b) This Escrow Agreement expressly sets forth all the
duties of the Escrow Agent with respect to any and all matters pertinent
hereto. No implied duties or obligations shall be read into this Escrow
Agreement against the Escrow Agent. The Escrow Agent shall not be bound by the
provisions of any agreement among the Undersigned except this Escrow Agreement.
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(c) The Escrow Agent shall not be liable, except for its
own gross negligence or willful misconduct and, except with respect to claims
based upon such gross negligence or willful misconduct that are successfully
asserted against the Escrow Agent, the Undersigned shall jointly and severally
indemnify and hold harmless the Escrow Agent (and any successor Escrow Agent)
from and against any and all losses, liabilities, claims, actions, damages and
expenses, including reasonable attorneys' fees and disbursements, arising out
of and in connection with this Escrow Agreement. Without limiting the
foregoing, the Escrow Agent shall in no event be liable in connection with its
investment or reinvestment of any cash held by it hereunder in good faith, in
accordance with the terms hereof, including without limitation, any liability
for any delays (not resulting from its gross negligence or willful misconduct)
in the investment or reinvestment of the Funds or any loss of interest incident
to any such delays.
(d) The Escrow Agent shall be entitled to rely upon any
order, judgment, certification, demand, notice, instrument or other writing
delivered to it hereunder (including facsimiles thereof) without being required
to determine the authenticity or the correctness of any fact stated therein or
the propriety or validity or the service thereof. The Escrow Agent may act in
reliance upon any instrument or signature believed by it to be genuine and may
assume that any person purporting to give receipt or advice or make any
statement or execute any document in connection with the provisions hereof has
been duly authorized to do so. Without limiting the generality of the
foregoing, Escrow Agent may rely on any extension or Letter of Credit delivered
to it as constituting the Letter of Credit hereunder for all purposes unless
notified in writing by Sellers to the contrary prior to its substitution.
(e) The Escrow Agent may act pursuant to the advice of
counsel with respect to any matter relating to this Escrow Agreement and shall
not be liable for any action taken or omitted in accordance with such advice.
(f) The Escrow Agent does not have any interest in the
Escrowed Property deposited hereunder but is serving as escrow holder only and
having only possession thereof. Buyer shall pay or reimburse the Escrow Agent
upon request for any transfer taxes or other taxes relating to the Escrowed
Property incurred in connection herewith and shall indemnify and hold harmless
the Escrow Agent from any amounts that it is obligated to pay in the way of
such taxes. Any payments from this Escrow Account shall be subject to any
applicable withholding taxes. Upon request, the parties hereto will promptly
provide the Escrow Agent with appropriate Form W-9 or Form W-8 (or other
applicable forms). This paragraph and Section 2.1(c) shall survive
notwithstanding any termination of this Escrow Agreement or the resignation of
the Escrow Agent.
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(g) The Escrow Agent makes no representations as to the
validity, value, genuineness or the collectability of any security or other
document or instrument held by or delivered to it.
(h) The Escrow Agent shall not be called upon to advise
any party as to the wisdom in selling or retaining or taking or refraining from
any action with respect to any securities or other property deposited
hereunder.
(i) The Escrow Agent (and any successor Escrow Agent) may
at any time resign as such by delivering the Escrowed Property to any successor
Escrow Agent jointly designated by each of the Undersigned in writing or to any
court of competent jurisdiction, whereupon the Escrow Agent shall be discharged
of and from any and all further obligations arising in connection with this
Escrow Agreement. The resignation of the Escrow Agent will take effect on the
earlier of (i) the appointment of a successor (including a court of competent
jurisdiction) or (ii) the day which is thirty (30) days after the date of
delivery of its written notice of resignation to each of the Undersigned. If
at that time the Escrow Agent has not received a designation of a successor
Escrow Agent, the Escrow Agent's sole responsibility after that time shall be
to safekeep the Escrowed Property until receipt of a designation of successor
Escrow Agent or a joint written disposition instruction by each of the
Undersigned or a final order of a court of competent jurisdiction.
(j) The Escrow Agent shall have no responsibility for the
contents of any writing of the arbitrators or any third party contemplated
herein as a means to resolve disputes and may rely without any liability upon
the contents thereof.
(k) In the event of any disagreement between the
Undersigned resulting in adverse claims or demands being made in connection
with the Escrowed Property, or in the event that the Escrow Agent in good faith
is in doubt as to what action it should take hereunder, the Escrow Agent shall
retain the Escrowed Property until the Escrow Agent shall have received (i) a
Final Determination directing delivery of the Escrowed Property or (ii) a
written agreement executed by Sellers' Representative and Buyer directing
delivery of the Escrowed Property, in which event the Escrow Agent shall
disburse the Escrowed Property in accordance with such order or agreement. The
Escrow Agent, at its option, shall be entitled to seek and, if obtained, rely
conclusively upon an opinion of independent counsel to the effect that any
court order delivered to Escrow Agent is a Final Determination. The Escrow
Agent shall act on such court order and legal opinion without further question.
(l) The compensation of the Escrow Agent (as payment in
full) for the services to be rendered by the Escrow Agent hereunder shall be
paid by Buyer in
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the amount of $500 per year for the period the Escrow Agreement is in effect,
together with reimbursement for all reasonable expenses, disbursements and
advances incurred or made by the Escrow Agent in performance of its duties
hereunder (including reasonable fees, expenses and disbursements of its
counsel). All fees and expenses of the Escrow Agent hereunder, other than
initial fee paid upon the execution hereof, shall be paid first out of
interest, dividends, and other income earned on the Funds, if any, and then, to
the extent of any shortfall, by Buyer. Any fees or expenses of the Escrow
Agent or its counsel which are not paid as provided for herein may be taken
from any property held by the Escrow Agent hereunder. It is understood that
the Escrow Agent's fees may be adjusted from time to time to conform to its
then current guidelines.
(m) No printed or other matter in any language (including
without limitation, prospectuses, notices, reports and promotional material)
which mentions the Escrow Agent shall be issued by the other parties hereto or
on such parties' behalf unless the Escrow Agent shall first have given its
specific written consent thereto, or is otherwise required by statute, law or
court order.
(n) The other parties hereto authorize the Escrow Agent,
for any securities held hereunder, to use the services of any United States
central securities depository it deems appropriate, including, but not limited
to, the Depository Trust Company and the Federal Reserve Book Entry System.
(o) In the event conflicting demands are made or
conflicting notices are served upon Escrow Agent, directly related to its
duties under this Agreement, the parties hereto agree that the Escrow Agent
shall take no action until (i) such action is agreed to in writing by the
parties hereto or (ii) issuance of a court order by a court of competent
jurisdiction directing Escrow Agent with respect to the action which is the
subject of the conflicting demands or notices.
(p) Purchaser and Sellers hereby agree, severally but not
jointly, to indemnify Escrow Agent for, and to hold Escrow Agent harmless
against, any loss, liability or expense incurred without negligence or bad
faith on the part of Escrow Agent, arising out of or in connection with Escrow
Agent's entering into this Agreement and carrying out Escrow Agent's duties
hereunder, including costs and expenses of successfully defending Escrow Agent
against any claim of liability with respect thereto. One-half of any payment
made pursuant to this paragraph (p) shall be paid by Purchaser and one-half
shall be paid by Sellers. Escrow Agent may consult with counsel of its own
choice and shall have full and complete authorization and protection for any
action taken or suffered by it hereunder in good faith and in accordance with
the opinion of such counsel.
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ARTICLE III
MISCELLANEOUS
Section 3.1 Notices. All notices, requests, consents or other
communications required or permitted under this Escrow Agreement shall be in
writing and shall be deemed to have been duly given or delivered by any party
(a) when received by such party if delivered by hand, (b) upon confirmation
when delivered by telecopy (any communication delivered by telecopy shall be
followed promptly with an original thereof), (c) within one day after being
sent by recognized overnight delivery service, or (d) within three business
days after being mailed by first-class mail, postage prepaid, and in each case
addressed as follows:
(i) if to Buyer:
STC Broadcasting, Inc.
0000 0xx Xxxxxx Xxxxx, Xxxxx 000
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxx
Telecopy No.: (000) 000-0000
with copies (which shall not constitute notice) to:
Hicks, Muse, Xxxx & Xxxxx Incorporated
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxxx X. Xxxxxx, Xx.
Telecopy No.: (000) 000-0000
Weil, Gotshal & Xxxxxx LLP
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Telecopy No.: (000) 000-0000
(ii) if to Sellers, to:
Xxxx X. Xxxxxx, as Sellers' Representative
0000 Xxx Xxxxxxxx Xxxxxx
Xx Xxxx, Xxxxx 00000
Telecopy No.: (000) 000-0000
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with copies (which shall not constitute notice) to:
Xxxx, Scholer, Fierman, Xxxx & Handler, LLP
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000-0000
Attention: Xxxxx X. Xxxxxxxx
Telecopy No.: (000) 000-0000
McMahon, Surovik, Suttle, Buhrmann, Xxxxx & Xxxx
000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xxx Xxxxxxx
Telecopy No.: (000) 000-0000
(iii) if to Escrow Agent, to
Xxxxxx Xxxxx Bank
0000 X Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxxxxx Xxxxxx
Telecopy No.: (000) 000-0000
Any party by written notice to the other parties pursuant to this Section 3.1
may change the address or the persons to whom notices or copies thereof are to
be sent to it by giving written notice of a change of address in the manner
provided in this Escrow Agreement for giving notice.
Section 3.2 Assignment. This Escrow Agreement and the rights and
duties hereunder shall be binding upon and inure to the benefit of the parties
hereto and the successors and assigns of each of the parties to this Escrow
Agreement. No rights, obligations or liabilities hereunder shall be assignable
by any party without the prior written consent of the other parties, except
that Buyers may assign its rights under this Escrow Agreement without obtaining
the prior written consent of the other parties hereto to any person or entity
to whom, pursuant to the Purchase Agreement, Buyer is permitted to assign all
or any portion of its rights under the Purchase Agreement, provided that any
such assignee duly executes and delivers an agreement to assume Buyer's
obligations under this Escrow Agreement.
Section 3.3 Amendment. This Escrow Agreement may be amended or
modified only by an instrument in writing duly executed by the parties to this
Escrow Agreement.
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Section 3.4 Waivers. Any waiver by any party hereto of any breach of
or failure to comply with any provision of this Escrow Agreement by any other
party hereto shall be in writing and shall not be construed as, or constitute,
a continuing waiver of such provision, or a waiver of any other breach of, or
failure to comply with, any other provision of this Escrow Agreement.
Section 3.5 Construction. This Escrow Agreement shall be construed
and enforced in accordance with and governed by the internal substantive laws
of the State of Texas without regard to conflicts of laws principles. The
headings in this Escrow Agreement are solely for convenience of reference shall
unto be given any effect in the construction or interpretation of this Escrow
Agreement. Unless otherwise stated, references to Sections and Exhibits are
references to Sections and Exhibits of this Escrow Agreement.
Section 3.6 Third Parties. Nothing expressed or implied in this
Escrow Agreement is intended, or shall be construed, to confer upon or give any
person or entity other than Buyer, Sellers and Escrow Agent any rights or
remedies under, or by reason or, this Escrow Agreement.
Section 3.7 Termination. This Escrow Agreement shall terminate at
the time of the delivery by Escrow Agent of the Letter of Credit or the Funds,
if any, to Sellers or Buyer, as the case may be, in accordance with the
provisions of this Escrow Agreement.
Section 3.8 Counterparts. This Escrow Agreement may be executed in
one or more counterparts, each of which shall be deemed any original and all of
which together shall constitute a single instrument.
Section 3.9 Waiver of Offset Rights. Escrow Agent hereby waives any
and all rights to offset that it may have against the Letter of Credit
including, without limitation, claims arising as a result of any claims,
amounts, liabilities, costs, expenses, damages, or other losses (collectively,
"Claims") that Escrow Agent may be otherwise entitled to collect from any party
to this Escrow Agreement, other than Claims arising under this Escrow
Agreement.
Section 3.10 Sellers' Representative. Each Seller hereby designates
Xxxx X. Xxxxxx, as representative to act on behalf of all Sellers as
contemplated or provided herein ("Sellers' Representative"), including without
limitation, (a) to amend this Escrow Agreement and to defend and settle any
claims arising hereunder and take any such actions with respect to the Funds as
Sellers shall deem necessary or appropriate; (b) to receive, hold and deliver
to Buyer any documents relating thereto on behalf of
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the Sellers; (c) to execute, acknowledge, deliver, record and file all
ancillary agreements, certificates and documents that the Sellers deem
necessary or appropriate in connection with the consummation of the
transactions contemplated by the terms and provisions of this Escrow Agreement;
(d) to receive any payments or notices due under this Escrow Agreement and
acknowledge receipt for such payments or notices; (e) to waive any breach or
default under the Escrow Agreement; (f) to terminate this Escrow Agreement; and
(g) to receive service of process in connection with any claims under this
Escrow Agreement. Buyer and Escrow Agent shall be entitled to rely upon
instructions and notices from Xxxx X. Xxxxxx with respect to this Escrow
Agreement, and Buyer and Escrow Agent shall not be liable for any acts or
omissions of the Sellers' Representative in connection with the performance by
him of his obligations under this Escrow Agreement.
[The remainder of this page is intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have caused this Escrow
Agreement to be executed by their duly authorized officers as of the day and
year first above written.
BUYER:
STC BROADCASTING, INC.
By: /s/ XXXXX X. XXXX
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Name: XXXXX X. XXXX
------------------------------------
Title: CFO
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SELLERS:
XXXX X. XXXXXX
/s/ XXXX X. XXXXXX
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XXXXXXX X. XXXXXXX
/s/ XXXXXXX X. XXXXXXX
-------------------------------------------------
XXXXXX XXXXX TRUST
By: Bank One Texas, N.A., as Trustee
By: /s/ XXXX X. XXXXX
-----------------------------
Name: XXXX X. XXXXX
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Title: VICE PRESIDENT
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XXXXXXXXX XXXXX TRUST
By: Bank One Texas, N.A., as Trustee
By: /s/ XXXX X. XXXXX
-----------------------------
Name: XXXX X. XXXXX
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Title: VICE PRESIDENT
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XXXXX XXXXXX GST EXEMPT TRUST
By: First National Bank of Abilene,
as Trustee
By: /s/ XXXX X. XXXXXXX
-----------------------------
Name: XXXX X. XXXXXXX
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Title: SR. VICE PRESIDENT &
TRUST OFFICER
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XXXXXXX XXXXXX TRUST
By: First National Bank of Abilene,
as Trustee
By: /s/ XXXX X. XXXXXXX
-----------------------------
Name: XXXX X. XXXXXXX
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Title: SR. VICE PRESIDENT &
TRUST OFFICER
--------------------------
XXXX XXXXXX TRUST
By: First National Bank of Abilene,
as Trustee
By: /s/ XXXX X. XXXXXXX
-----------------------------
Name: XXXX X. XXXXXXX
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Title: SR. VICE PRESIDENT &
TRUST OFFICER
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ESCROW AGENT:
XXXXXX XXXXX BANK
By: /s/ J. XXXXXXXXX XXXXXX
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Name: J. XXXXXXXXX XXXXXX
------------------------------------
Title: SENIOR VICE PRESIDENT
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