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Exhibit 10.33
DEPOSIT
ESCROW AGREEMENT
THIS DEPOSIT ESCROW AGREEMENT (this "Escrow Agreement") is made and
entered into as of this 3rd day of February, 1998, by and among STC
BROADCASTING OF VERMONT, a Delaware corporation ("Buyer"), TUSCALOOSA
BROADCASTING, INC., a Maryland corporation ("Tuscaloosa"), WPTZ LICENSEE, INC.,
a Maryland corporation ("WPTZ Licensee"), and WNNE LICENSEE, INC., a Maryland
corporation ("WNNE Licensee") (Tuscaloosa, WPTZ Licensee and WNNE Licensee,
collectively, the "Sellers" and, individually a "Seller"), and XXXXXX XXXXX
BANK, as deposit escrow agent (the "Escrow Agent").
RECITALS
WHEREAS, Buyer and Sellers have entered into an Asset Purchase
Agreement dated as of February 3, 1998 (the "Purchase Agreement") pursuant to
which Sellers have agreed to sell, assign, transfer, convey and deliver to
Buyer, and Buyer has agreed to purchase from Sellers, the Assets (as defined in
the Purchase Agreement), all in accordance with and subject to the terms and
conditions set forth in the Purchase Agreement;
WHEREAS, pursuant to the Purchase Agreement, 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 (and for the purposes of
Section 1.5 hereof, the Escrow Agent) in the amount of Seven Million Two
Hundred Thousand Dollars ($7,200,000) in the form attached hereto as Appendix
A; and
WHEREAS, 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 the 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. The 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
five (5) business days after (a) the delivery to the Escrow Agent of written
instructions signed by Buyer and Sellers stating that the Letter of Credit is
to be delivered to Sellers, or (b) the delivery to the Escrow Agent of a copy
of a Final Determination (as defined below) establishing the right of Sellers
to the Letter of Credit, the 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 Buyer. Except as
otherwise provided in the last sentence of this Section 1.4, not more than five
(5) business days after (a) the delivery to the Escrow Agent of written
instructions signed by Buyer and Sellers stating that the Letter of Credit is
to be delivered to Buyer, or (b) the delivery to the Escrow Agent of a copy of
a Final Determination establishing Buyer' right to the Letter of Credit, the
Escrow Agent shall deliver the Letter of Credit to Buyer as provided in such
instructions or Final Determination. On the Transfer Date, simultaneously upon
receipt by the Escrow Agent of written instructions signed by Buyer and Sellers
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.
Section 1.5 Replacement of Letter of Credit.
(a) Buyer may provide to Sellers for its approval at least
forty-five (45) calendar days before the expiration of the Letter of Credit a
form of (i) an extension of the original Letter
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of Credit issued by the issuer of the then expiring Letter of Credit (with no
modifications to the original Letter of Credit other than extending the
expiration date for at least an additional ninety (90) days after the then
expiration date of the Letter of Credit), or (ii) a substitute Letter of Credit
in a form identical to Appendix A (with an expiration date of not less than
ninety (90) days after the expiration date set forth in the then expiring
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) equal to or greater than the bank which issued
the then expiring Letter of Credit, together with a statement signed by an
officer of Buyer, in each case, certifying that such substitute Letter of
Credit or extension will comply with the foregoing requirements. If Sellers
approve such form of substitute Letter of Credit or extension in writing (such
approval not to be unreasonably withheld, conditioned or delayed) and Buyer
delivers to the Escrow Agent an original of such substitute Letter of Credit or
extension (duly executed by the issuing bank) and the written approval of
Sellers, at least thirty (30) calendar days before the expiration of the Letter
of Credit, such substitute Letter of Credit (or such then expiring Letter of
Credit as extended by the extension) 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.
(b) In the event that (i) Buyer delivers a form of substitute
Letter of Credit and the Sellers do not approve the form thereof, or (ii) Buyer
does not deliver an original substitute Letter of Credit to the Escrow Agent
(or an extension of the expiring Letter of Credit) at least thirty (30)
calendar days before the expiration of the then expiring Letter of Credit,
Buyer may not replace the Letter of Credit, and upon written instructions
signed by Sellers, the Escrow Agent shall immediately present the Letter of
Credit for payment (with a drawing certificate signed by Sellers) and hold the
funds drawn pursuant thereto in accordance with the terms of this Escrow
Agreement notwithstanding any actual or alleged default hereunder or under the
Purchase Agreement by any party or any instruction to the contrary by Buyer or
any other person, and notwithstanding any other state of facts.
Section 1.6 Investment of Proceeds of Letter of Credit.
(a) If the Letter of Credit is drawn by the Escrow Agent
or Sellers because it will expire and Buyer has not replaced it pursuant to and
in accordance with Section 1.5, upon receipt of the Funds of such drawing
pursuant to the terms of the Letter of Credit, the Escrow Agent shall hold the
Funds in escrow in lieu of the Letter of Credit, and shall invest the Funds in
Permitted Investments (as defined in (b) below). The Escrow Agent shall hold
and release the Funds in accordance with the terms of this Escrow Agreement
(all references herein to the Letter of Credit being deemed to be references to
the Funds for such purpose).
(b) "Permitted Investments" shall mean direct obligations
of the United States government having maturities of 90 days or less, money
market funds that invest solely in direct obligations of the United States
government, repurchase agreements, and such other investments as may be
specified from time to time by joint written instructions from Buyer and
Sellers to the
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Escrow Agent; provided, such other investments are consistent with the Escrow
Agent's investment criteria. The Escrow Agent will act upon investment
instructions the day that such instructions are received, provided the requests
are communicated within a sufficient amount of time to allow the Escrow Agent
to make the specified investment. Instructions received after an applicable
investment cutoff deadline will be treated as being received by the Escrow
Agent on the next business day, and the Escrow Agent shall not be liable for
any loss arising directly or indirectly, in whole or in part, from the
inability to invest funds on the day the instructions are received. The Escrow
Agent shall not be liable for any loss incurred by the actions of third parties
or by any loss arising by error, failure or delay in making of an investment or
reinvestment, and the Escrow Agent shall not be liable for any loss of
principal or income in connection therewith, unless such error, failure or
delay results from the Escrow Agent's gross negligence or willful misconduct.
As and when the Funds are to be released under this Escrow Agreement, the
Escrow Agent shall cause the Permitted Investments to be converted into cash
and shall not be liable for any loss of principal or income in connection
therewith. Neither Sellers, Buyer nor the Escrow Agent shall be liable for any
loss of principal or income due to the choice of Permitted Investments in which
the Funds are invested or the choice of Permitted Investments converted into
cash pursuant to this paragraph (b).
(c) All interest or other income on the Funds, if any,
shall be the property of Buyer and shall be distributed by the Escrow Agent to
Buyer by check upon the earlier of (i) the making of a drawing under the Letter
of Credit, or (ii) the expiration of the Letter of Credit, less the amount
payable by the Escrow Agent to Sellers under Section 1.6(d), if any. The
parties acknowledge that payment of any interest earned on the funds invested
in this escrow will be subject to backup withholding penalties unless a
properly completed Internal Revenue Service form W-8 or W-9 certification is
submitted to the Escrow Agent.
(d) For tax purposes, the Funds shall be the property of
Buyer and all interest and other income earned on the Funds shall be the income
of Buyer. Buyer and Sellers shall file Tax Returns and the Escrow Agent shall
file a Form 1099 consistent with such treatment. In the event that the
Internal Revenue Service or any other governmental authority successfully
claims that the interest and other income earned on the Funds is taxable to
Sellers for any taxable period, Buyer shall promptly pay to Sellers cash equal
to the product of the Effective Tax Rate times all amounts paid by the Escrow
Agent to Buyer pursuant to Section 1.6(c) for such taxable period, plus
interest on such amount at the rate specified by section 6621(a)(2) of the Code
and corresponding provisions of applicable state and local laws, and the Escrow
Agent shall thereafter make monthly distributions to Sellers of cash equal to
the product of the Effective Tax Rate times the income distributable pursuant
to Section 1.6(c) for such period. The term "Effective Tax Rate" shall mean
the highest marginal effective combined federal, state and local income tax
rate applicable with respect to Sellers as reasonably computed and provided to
the Escrow Agent by Sellers.
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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 Sellers and Buyer 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 between Sellers and Buyer except this Escrow
Agreement.
(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 Buyer and Sellers 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 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, the 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.
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(f) 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 Sellers and Buyer 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 Sellers and
Buyer. 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
Sellers and Buyer or a final order of a court of competent jurisdiction.
(g) 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.
(h) In the event of any disagreement between Sellers and
Buyer 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 (x) a Final
Determination directing delivery of the Escrowed Property or (y) a written
agreement executed by Sellers 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 the
Escrow Agent is a Final Determination. The Escrow Agent shall act on such
court order and legal opinion without further question.
(i) The compensation of the Escrow Agent (as payment in
full) for the services to be rendered by the Escrow Agent hereunder shall be
paid one-half by Buyer and one-half by Sellers in the aggregate amount of Five
Hundred Dollars ($500.00) per annum, 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 the 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.
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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:
c/o STC Broadcasting, Inc.
0000 0xx Xxxxxx Xxxxx, Xxxxx 000
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxx
Telecopy No.: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxx & Xxxxxxx L.L.P.
Columbia Square
000 Xxxxxxxxxx Xxxxxx, XX
Xxxxxxxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxxx, Xx., Esq.
Telecopy No.: (000) 000-0000
(ii) if to Sellers, to:
Xxxxxxxx Broadcast Group, Inc.
0000 Xxxx 00xx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Quicksilver
Telecopy No.: (000) 000-0000
(iii) if to the Escrow Agent, to:
Xxxxxx Xxxxx Bank
0000 X Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000
Attention: J. Xxxxxxxxx Xxxxxx
Telecopy No.: (000) 000-0000
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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 Buyer 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'
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.
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 New York without regard to conflicts of laws principles. The
headings in this Escrow Agreement are solely for convenience of reference and
shall not 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 the Escrow Agent any rights or
remedies under, or by reason of, this Escrow Agreement.
Section 3.7 Termination. This Escrow Agreement shall terminate at
the time of the delivery by the 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.
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Section 3.9 Waiver of Offset Rights. The 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 the Escrow Agent may be otherwise entitled to collect from any
party to this Escrow Agreement, other than Claims arising under this Escrow
Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Deposit Escrow
Agreement to be executed by their duly authorized officers as of the day and
year first above written.
STC BROADCASTING OF VERMONT, INC.
By: /s/ Xxxxx X. Xxxx
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Name: Xxxxx X. Xxxx
Title: Chief Financial Officer
TUSCALOOSA BROADCASTING, INC.,
By: /s/ Xxxxx X. Xxx
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Name: Xxxxx X. Xxx
Title: Treasurer and Secretary
WPTZ LICENSEE, INC.
By: /s/ Xxxxx X. Xxx
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Name: Xxxxx X. Xxx
Title: Treasurer and Secretary
WNNE LICENSEE, INC.
By: /s/ Xxxxx X. Xxx
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Name: Xxxxx X. Xxx
Title: Treasurer and Secretary
XXXXXX XXXXX BANK
By: /s/ J. Xxxxxxxxx Xxxxxx
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Name: J. Xxxxxxxxx Xxxxxx
Title: Senior Vice President
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