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EXHIBIT 10.30
DEPOSIT ESCROW AGREEMENT
THIS DEPOSIT ESCROW AGREEMENT (this "Escrow Agreement") is
made and entered into as of this 9th day of May 1997, by and among STC
Broadcasting, Inc., a Delaware corporation ("Purchaser"), WJAC Acquisition
Corp., a Pennsylvania corporation and a wholly-owned subsidiary of Purchaser
("Sub"), and WJAC, Incorporated, a Pennsylvania corporation (the "Company," and
together with Purchaser and Sub, the "Undersigned"), and Mellon Bank, N.A., a
national banking association ("Escrow Agent").
RECITALS
WHEREAS, Purchaser, Sub and the Company have entered into an Agreement
and Plan of Merger dated as of May 9, 1997 (the "Merger Agreement") pursuant
to which the Sub shall merge with and into the Company on the terms and
conditions set forth in the Merger Agreement, whereby the Company shall become
a wholly-owned subsidiary of Purchaser;
WHEREAS, pursuant to the Merger Agreement, the Purchaser is required
to deliver to the Escrow Agent an original, irrevocable letter of credit (the
"Letter of Credit") issued for the benefit of the Company (and for the purposes
of Section 1.5 hereof, Escrow Agent) in the amount of $4,000,000 in the form
attached hereto as Appendix A;
WHEREAS, as a condition to the execution of the Merger Agreement, the
Undersigned have agreed to execute and deliver this Escrow Agreement; and
WHEREAS, unless otherwise defined herein, capitalized terms used
herein shall have the meanings assigned to them in the Merger Agreement.
AGREEMENTS
Accordingly, in consideration of the recitals and of the respective
agreements and covenants contained herein and in the Merger 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, Purchaser has delivered the Letter of Credit to Escrow Agent,
pursuant to the provisions of the Merger 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 the Company.
(a) Not more than five (5) business days after (a) the
delivery to Escrow Agent of written instructions signed by the Company and
Purchaser stating that the Letter of Credit is to be delivered to the Company,
or (b) the delivery to Escrow Agent of a copy of a Final Determination (as
defined below) establishing the Company's right to the Letter of Credit, Escrow
Agent shall deliver the Letter of Credit to the Company 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.
(b) In the event that the Company is entitled to receive the
Letter of Credit pursuant to Section 1.3(a) above, the Company shall have the
right to direct Escrow Agent in writing to deliver the Letter of Credit to
Xxxxxxx X. Xxxxx as agent on behalf of the shareholders of the Company (the
"Shareholders' Agent"). The Company acknowledges and agrees that delivery of
the Letter of Credit to the Shareholders' Agent at the Company's direction
shall satisfy in full and discharge the Escrow Agent's obligations set forth in
Section 1.3(a) for all purposes whatsoever as if Escrow Agent had delivered the
Letter of Credit directly to the Company.
Section 1.4 Delivery of Letter of Credit to Purchaser. Except as
otherwise provided in the last sentence of this Section 1.4, not more than five
(5) business
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days after (a) the delivery to Escrow Agent of written instructions signed by
Purchaser and the Company stating that the Letter of Credit is to be delivered
to Purchaser, or (b) the delivery to Escrow Agent of a copy of a Final
Determination establishing Purchaser' right to the Letter of Credit, Escrow
Agent shall deliver the Letter of Credit to Purchaser. At the Closing,
simultaneously upon receipt by Escrow Agent of written instructions signed by
Purchaser and the Company stating that the Letter of Credit is to be delivered
to Purchaser, the Escrow Agent shall deliver the Letter of Credit to Purchaser
or its representative.
Section 1.5 Replacement of Letter of Credit.
(a) Purchaser may provide to the Company 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 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 Purchaser to the
Company) equal to or greater than the bank which issued the then expiring
Letter of Credit, together with a statement signed by an officer of Purchaser,
in each case, certifying that such substitute Letter of Credit or extension
will comply with the foregoing requirements. If the Company approves such form
of substitute Letter of Credit or extension in writing (such approval not to be
unreasonably withheld, conditioned or delayed) and Purchaser delivers to Escrow
Agent an original of such substitute Letter of Credit or extension (duly
executed by the issuing bank) and the Company's written approval, 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 Purchaser, for
the same.
(b) In the event that (i) Purchaser delivers a form of
substitute Letter of Credit and the Company does not approve the form thereof,
or (ii) Purchaser does not deliver an original substitute Letter of Credit to
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,
Purchaser may not replace the Letter of Credit, and upon written instructions
signed by the Company, Escrow Agent shall immediately present the Letter of
Credit for payment (with a drawing certificate signed by the Company) and hold
the funds drawn pursuant thereto in
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accordance with the terms of this Escrow Agreement notwithstanding any actual
or alleged default hereunder or under the Merger Agreement by any party or any
instruction to the contrary by Purchaser 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
the Company because it will expire and Purchaser 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, 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). 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 U.S. government having maturities of 90 days or less, money market funds
that invest solely in direct obligations of the U.S. government, and such other
investments as may be specified from time to time by joint written instructions
from Purchaser and the Company to the Escrow Agent; provided, such other
investments are consistent with the Escrow Agent's investment criteria. 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 Escrow Agent to make the specified investment. Instructions
received after an applicable investment cutoff deadline will be treated as
being received by Escrow Agent on the next business day, and 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, 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. None of the Company, Purchaser or 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 shall be the
property of Purchaser and shall be distributed by Escrow Agent to Purchaser by
check on a monthly basis less the amount payable by Escrow Agent to the Company
under Section 1.6(d), if any. The parties acknowledge that payment of any
interest earned
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on the funds invested in this escrow will be subject to backup withholding
penalties unless a properly completed Internal Revenue Service form W8 or W9
certification is submitted to Escrow Agent.
(d) For tax purposes, the Funds shall be property of
Purchaser and all interest and other income earned on the Funds shall be the
income of the Purchaser. Purchaser and the Company 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 the Company for any taxable period, Purchaser shall promptly pay to
the Company cash equal to the product of the Effective Tax Rate times all
amounts paid by Escrow Agent to Purchaser 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
the Company 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 the Company
or the partners of the Company, as the case may be, as reasonably computed and
provided to the Escrow Agent by the Company.
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.
(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
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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, 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 the Company
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. Purchaser 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 of income from this Escrow Account shall be
subject to withholding regulations then in force with respect to United States
taxes. The parties hereto will promptly provide the Escrow Agent with
appropriate W-9 forms for Tax I.D. number certifications, or W-8 forms for
non-resident alien certifications. It is understood that the Escrow Agent
shall be responsible for income reporting only with respect to income earned on
investment of the Funds and is not responsible for any other reporting. This
paragraph and Section 2.1(c) shall survive notwithstanding any termination of
this Escrow Agreement or the resignation of the Escrow Agent.
(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.
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(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 the Company and Purchaser 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 Purchaser in the amount of One Thousand Five Hundred ($1,500), 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
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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 Purchaser.
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) The Undersigned hereby irrevocably submit to the
jurisdiction of any state or federal court located in the Commonwealth of
Pennsylvania in any action or proceeding arising out of or relating to this
Escrow Agreement, and the parties hereby irrevocably agree that all claims in
respect of such action or proceeding, shall be heard and determined in such a
New York State or federal court. The Undersigned hereby consent to and grant
to any such court jurisdiction over the persons of such parties and over the
subject matter of any such dispute and agree that delivery or mailing of any
process or other papers in the manner provided hereinabove, or in such other
manners as may be permitted by law, shall be valid and sufficient service
thereof.
(n) 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.
(o) 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.
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:
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(i) if to Purchaser or Sub:
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 the Company, to:
WJAC, Incorporated
Xxx Xxxxxxx Xxxxxxxx
Xxxxxxxxx, XX 00000
Attention: Mr. Xxxxxxx Xxxxx
Telecopy No.: (000) 000-0000
with copies (which shall not constitute notice) to:
Xxxxxxxxxxx & Xxxxxxxx LLP
0000 Xxxxxx Xxxxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxx, Esquire
Telecopy No.: (000) 000-0000
and to:
Stonewood Capital Management, Inc.
Xxxxx Xxxxxxx Xxxxxx, 00 Xxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
Telecopy No.: (000) 000-0000
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(iii) if to Escrow Agent, to
Mellon Bank, N.A.
Two Mellon Xxxx Xxxxxx, Xxxx 000
Xxxxxxxxxx, XX 00000-0000
Attention: Xxxxx XxXxxxxx
Corporate Trust Group
Telecopy No.: (000) 000-0000
Federal Reserve Fund Transfers:
ABA #000000000
Mellon Bank, N.A.
Xxxxxxxxxx, XX
X/X 000-0000
Xxxxxxxxx Trust Group
Attention: Xxxxx XxXxxxxx
RE:STC/WJAC Escrow Account
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 Purchaser 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 Merger Agreement, Purchaser is permitted to
assign all or any portion of its rights under the Merger Agreement, provided
that any such assignee duly executes and delivers an agreement to assume
Purchaser' 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.
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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 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 Purchaser, the Company 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 the Company or Purchaser, 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.
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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.
STC BROADCASTING, INC.
By: /s/XXXXXX X. XXXXX
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Name: Xxxxxx X. Xxxxx
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Title: President
---------------------------------
WJAC ACQUISITION CORP.
By: /s/XXXXXX X. XXXXX
------------------------------------
Name: Xxxxxx X. Xxxxx
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Title: President
---------------------------------
WJAC, INCORPORATED
By: /s/XXXXXXX X. XXXXX
------------------------------------
Name: Xxxxxxx X. Xxxxx
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Title: President
---------------------------------
MELLON BANK, N.A.
By: /s/XXXXX XXXXX
------------------------------------
Name: Xxxxx Xxxxx
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Title: Vice President
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