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EXHIBIT 10.74.1
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EXHIBIT 10.74.1
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT is made as of January 31, 1996, by and
among S & E NETWORK INC., a Puerto Rico corporation ("Seller"), XXXXXX
COMMUNICATIONS OF SAN XXXX, INC., a Florida corporation ("Buyer") and HOUSING
DEVELOPMENT ASSOCIATES S.E., a Puerto Rico special partnership ("HDA").
R E C I T A L S:
A. Seller owns television stations WSJN-TV, San Xxxx, Puerto Rico,
WKPV(TV), Ponce, Puerto Rico and WJWN-TV, San Sebastian, Puerto Rico (the
"Stations") pursuant to licenses issued by the Federal Communications
Commission (the "FCC").
B. HDA owns all of the outstanding common stock of Seller and agrees
to the Seller's issuing additional common stock to Buyer according to the terms
of this Agreement.
C. Seller desires to issue to Buyer and Buyer desires to buy, upon
the approval of the FCC, common stock representing fifty percent of the then
outstanding capital stock of the Seller, for the price and on the terms and
conditions hereinafter set forth.
A G R E E M E N T S:
In consideration of the above recitals and of the mutual agreements and
covenants contained in this Agreement, the receipt and sufficiency of which are
hereby acknowledged, the parties to this Agreement, intending to be bound
legally, agree as follows:
SECTION 1. CERTAIN DEFINITIONS.
2.1 Terms Defined in this Section. The following terms, as
used in this Agreement, have the meanings set forth in this Section:
"Accounts Receivable" means the rights of Seller as of the Closing Date
to payment for the sale of advertising time and other goods and services by the
Stations prior to the Closing Date.
"Affiliate" means (a) any Person that directly or indirectly, through
one or more intermediaries, controls, is controlled by or is under common
control with another Person, or (b) an officer or director of an affiliate
within the meaning of (a) above.
"Assets" means the assets to be owned or held by the Seller as of the
Closing, as specified in Section 2.2.
"Closing" means the consummation of the purchase and sale of the Stock
pursuant to this Agreement in accordance with the provisions of Section 8.
"Closing Date" means the date on which the Closing occurs, as
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determined pursuant to Section 8.
"Communications Act" means the Communications Act of 1934, as amended.
"Consents" means the consents, permits, or approvals of government
authorities and other third parties necessary to transfer the Stock to Buyer or
otherwise to consummate the transactions contemplated by this Agreement.
"Contracts" means all contracts, leases, non-governmental licenses, and
other agreements (including leases for personal or real property and employment
agreements), written or oral (including any amendments and other modifications
thereto) to which Seller is a party or that are binding upon Seller and that
relate to or affect the Assets or the business or operations of the Stations,
and (a) that are in effect on the date of this Agreement or (b) that are
entered into by Seller between the date of this Agreement and the Closing Date.
"Effective Time" means 12:01 a.m., local San Xxxx time, on the Closing
Date.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Escrow Agent" means First Union National Bank of Florida.
"Escrow Agreement" means the Escrow Agreement to be entered into among
Buyer, Seller, HDA and the Escrow Agent in accordance with Section 9.3.
"FCC" means the Federal Communications Commission.
"FCC Consent" means action by the FCC granting its consent to the
transfer of control of Seller as contemplated by this Agreement.
"FCC Licenses" means those licenses, permits, and authorizations issued
by the FCC to Seller in connection with the business and operations of the
Stations.
"Final Order" means an action by the FCC that has not been reversed,
stayed, enjoined, set aside, annulled, or suspended, and with respect to which
no requests are pending for administrative or judicial review, reconsideration,
appeal, or stay, and the time for filing any such requests and the time for the
FCC to set aside the action on its own motion have expired.
"GAAP" means generally accepted accounting principles consistently
applied.
"Intangibles" means all copyrights, trademarks, trade names,
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service marks, service names, licenses, patents, permits, jingles, proprietary
information, technical information and data, machinery and equipment
warranties, and other similar intangible property rights and interests (and any
goodwill associated with any of the foregoing) applied for, issued to, or owned
by Seller or under which Seller is licensed or franchised and that are used or
useful in the business and operations of the Stations, together with any
additions thereto between the date of this Agreement and the Closing Date.
"Licenses" means all licenses, permits, construction permits, and other
authorizations issued by the FCC, the Federal Aviation Administration, or any
other federal, state, or local governmental authorities to Seller, currently in
effect and used or useful in the business or operations of the Stations,
together with any additions thereto between the date of this Agreement and the
Closing Date.
"Material Contract" means any contract, lease, non-governmental license,
agreement, or commitment, except for any contract, lease, non-governmental
license, agreement, or commitment, (i) the obligations under which will be
fully performed prior to Closing; or (ii) except for film or programming,
entered into in the ordinary course of business and not involving a commitment
in excess of $5,000.
"Person" means an individual, corporation, association, partnership,
joint venture, trust, estate, limited liability company, limited liability
partnership, or other entity or organization.
"Real Property" means all real property, and all buildings and other
improvements thereon, whether or not owned or held by Seller, used or useful in
the business or operations of the Stations.
"Real Property Interests" means all interests in real property,
including fee estates, leaseholds and subleaseholds, purchase options,
easements, licenses, rights to access, and rights of way, and all buildings and
other improvements thereon, owned or held by Seller that are used or useful in
the business or operations of the Stations, together with any additions thereto
between the date of this Agreement and the Closing Date.
"Seller Consents" means the Consents required to be obtained by Seller
to permit Seller to sell the Stock pursuant to this Agreement as listed in
Schedule 3.5.
"Shareholder Agreement" means the Shareholder Agreement to be entered
into upon the Closing among Buyer, Seller and HDA, substantially in the form of
Exhibit A.
"Stations" means television stations WSJN-TV, San Xxxx, Puerto Rico,
WKPV(TV), Ponce, Puerto Rico and WJWN-TV, Xxx Xxxxxxxxx,
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Xxxxxx Xxxx.
"Stock" means 500 shares of voting common stock, par value $.01 per
share which, as of the Effective Time, shall represent fifty percent (50%) of
the issued and outstanding shares of capital stock of Seller.
"Tangible Personal Property" means all machinery, equipment, tools,
vehicles, furniture, office equipment, inventory, spare parts, and other
tangible personal property owned or held by Seller that is used or useful in
the conduct of the business or operations of the Stations, together with any
additions thereto between the date of this Agreement and the Closing Date.
"Taxes" means all federal, state, local or foreign income, gross
receipts, windfall profits, severance, property, production, sales, use,
license, excise, franchise, capital, transfer, employment, withholding and
other taxes and assessments, together with any interest, additions or penalties
with respect thereto and any interest in respect of such additions or
penalties, and "Tax" means any one of such Taxes.
"Tax Returns" means all federal, state, local and foreign income,
franchise, sales, use, occupation, property, excise, alternative or add-on
minimum, social security, employees' withholding, unemployment, disability,
transfer, capital stock and other tax returns and tax reports, and "Tax Return"
means any one of such Tax Returns.
"Time Brokerage Agreement" means the Time Brokerage Agreement dated the
date hereof between Seller and Buyer.
2.1 Terms Defined Elsewhere in this Agreement. For purposes of this
Agreement, the following terms have the meanings set forth in the sections
indicated:
Term Section
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Benefit Arrangements Section 3.18(a)(5)
Buyer Preamble
Claimant Section 10.4(a)
Employees Section 3.18(a)
Escrow Deposit Section 9.3
Financial Statements Section 3.12
Indemnifying Party Section 10.4(a)
Multiemployer Plan Section 3.18(a)(2)
Pension Plan Section 3.18(a)(3)
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Purchase Price Section 2.3
Seller Preamble
Welfare Plan Section 3.18(a)(1)
2.1 Clarifications. Words used herein, regardless of the gender and
number specifically used, shall be deemed and construed to include any other
gender and any other number as the context requires. Use of the word
"including" herein shall be deemed and construed to mean "including but not
limited to." Except as specifically otherwise provided in this Agreement in a
particular instance, a reference to a Section, Exhibit or Schedule is a
reference to a Section of this Agreement or an Exhibit or Schedule hereto, and
the terms "hereof," "herein" and other like terms refer to this Agreement as a
whole, including the Schedules hereto, and not solely to any particular part
hereof.
2.1 Knowledge. Whenever a representation or warranty contained
herein is qualified by the phrase "to Seller's knowledge" or other similar
phrase, such representation or, warranty is made based on the actual knowledge
of either Xxxxx X. Xxxxx or Xxxxxx Xxxxxxxx following reasonable inquiry by
either to the officer or employee of Seller who has responsibility for the area
of the Stations' operations to which such representation, warranty or covenant
relates. Buyer agrees that Messrs. Xxxxxxxx and Xxxxx shall have conducted a
reasonable inquiry upon their directing responsible employees of Seller to
review Section 3 of this Agreement together with the related schedules and to
notify either of them of any misstatements or omissions contained therein.
SECTION 2. AT CLOSING; PURCHASE PRICE.
3.1 Agreement to Sell and Buy. Subject to the terms and conditions
set forth in this Agreement, Seller hereby agrees to issue and deliver to Buyer
on the Closing Date, and Buyer agrees to purchase, the Stock, free and clear of
any claims, liabilities, security interests, mortgages, liens, pledges,
conditions, charges, or encumbrances of any nature whatsoever except as
specifically provided for in this Agreement.
3.1 Assets of Seller. The Assets currently owned by Seller include
the following:
(1) The Tangible Personal Property (Schedule 3.8);
(1) The Real Property Interests (Schedule 3.7);
(1) The Licenses (Schedule 3.6);
(1) The Contracts listed on Schedule 3.9 and designated
as Contracts that are to be retained by Seller;
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(1) The Intangibles (Schedule 3.10) and all intangible
assets of Seller relating to the Stations that are not specifically included
within the Intangibles, including the goodwill of the Stations, if any;
(1) All of Seller's proprietary information, technical
information and data, machinery and equipment warranties, maps, computer discs
and tapes, plans, diagrams, blueprints, and schematics, including filings with
the FCC relating to the business and operation of the Stations;
(1) All choses in action of Seller;
(1) All books and records of the Stations, including
executed copies of the Contracts described in item (4) above, and all records
required by the FCC to be kept by the Stations; and
(1) Seller's cash, cash equivalents, and marketable
securities on hand as of the Closing, and all other cash in any of Seller's
bank accounts, any and all insurance policies, bonds, letters of credit, or
other similar items, any cash surrender value in regard thereto, and any and
all claims receivable under any and all insurance policies.
Except as otherwise provided for in this Agreement, Seller shall not
make any material dispositions of these Assets without the prior approval of
Buyer unless such Assets are replaced with Assets of approximately equal value
and utility to the Stations.
3.1 Purchase Price. The purchase price for the Stock (the "Purchase
Price") shall be Four Million Dollars ($4,000,000), payable by federal wire
transfer of same-day funds pursuant to wire instructions which shall be
delivered by Seller to Buyer at least two business days prior to the Closing
Date.
3.1 Assumption or Payment of Liabilities. At the Closing, HDA shall
assume the Seller's payment obligations under the Loan Agreement with General
Electric Credit Corporation described in Schedule 3.9 hereof (the "GE Loan")
and Seller's existing indebtedness to the Internal Revenue Service described in
the Financial Statements (the "IRS Debt") and shall pay such obligations when
and as the same become due and payable. Until paid in full in accordance with
its terms, the GE Loan shall remain secured by assets of the Seller. At the
Closing, the Seller shall convey to HDA, and HDA shall purchase from Seller,
all Accounts Receivable existing as of January 31, 1996 that have not been
collected as of the Closing Date for a cash payment equal to the face amount of
such Accounts Receivable. At or prior to the Closing, HDA shall pay, or make
capital contributions to Seller of sufficient funds to satisfy, all liabilities
of Seller (except for the GE Loan and the IRS Debt) calculated as of January
31, 1996 plus all costs of Seller in respect of employee terminations agreed
upon by HDA and Buyer prior to February 29, 1996, to the extent that such
liabilities and costs exceed the sum of Seller's cash, Accounts Receivable, and
certain prepaid expenses (excluding prepaid broadcasting rights), calculated as
of January 31, 1996. HDA may in lieu of some or
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all of such payments, assume the sole responsibility for some or all of the
liabilities of Seller pursuant to agreements in form and substance reasonably
acceptable to Buyer.
3.1 Programming Rebate. In the event that Seller airs programming
after January 31, 1996 with respect to which Seller has prepaid broadcast
rights as of January 31, 1996, at Closing, Buyer shall pay HDA for such
programming an amount calculated based on the Stations' cost for such
programming is aired.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER AND HDA.
Seller and HDA represent and warrant to Buyer as follows:
4.1 Organization of Seller and HDA. Seller is a corporation duly
organized and validly existing under the laws of the Commonwealth of Puerto
Rico and HDA is a partnership duly organized and validly existing under the
laws of the Commonwealth of Puerto Rico. Seller and HDA have the requisite
corporate or partnership power and authority to execute, deliver and perform
this Agreement and the documents contemplated hereby according to their
respective terms.
4.1 Authority of Seller. Seller has the requisite corporate power
and authority to own, lease, and operate its properties, to carry on its
business in the places where such properties are now owned, leased, or operated
and such business is now conducted, and to execute, deliver and perform this
Agreement and the documents contemplated hereby according to their respective
terms. Seller has delivered to Buyer complete and correct copies of the
Certificate of Incorporation, Bylaws, stock records, and corporate minutes of
Seller, all as in effect through the date hereof. Seller does not directly or
indirectly own, of record or beneficially, or have the right or obligation to
acquire, any outstanding securities or other interest in any corporation,
partnership, joint venture or other entity.
4.1 Authorization and Binding Obligation. The execution, delivery
and performance of this Agreement by Seller and HDA have been duly authorized
by all necessary corporate or partnership action on the part of Seller and HDA.
This Agreement has been duly executed and delivered by Seller and HDA and
constitutes the legal, valid, and binding obligation of them, enforceable in
accordance with its terms except as the enforceability of this Agreement may be
affected by bankruptcy, insolvency, or similar laws affecting creditors' rights
generally and by judicial discretion in the enforcement of equitable remedies.
4.1 Stock. As of the date hereof, there are no outstanding options,
conversion rights, warrants, or other rights in existence to acquire from
Seller any of Seller's shares of capital stock. The issued and outstanding
shares of capital stock of Seller consist of 500 shares of voting common stock,
par value $.01 per share ("Common Stock"), and all such shares have been duly
and validly issued and are fully paid and nonassessable and are not subject to
any preemptive rights. Seller has authorized 500,000 shares of non-voting
Class A Preferred, none of which shares are issued and
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outstanding, and 500,000 shares of Common Stock. There are no voting trust
agreements or other contracts, agreements, or arrangements restricting voting or
dividend rights, issuance or transferability with respect to the issued and
outstanding capital stock of Seller. Seller has not violated any federal,
foreign, state, or local law, ordinance, rule, or regulation in connection with
the offer for sale or sale and issuance of its outstanding shares of capital
stock or any other securities. HDA owns all of the issued and outstanding
capital stock of Seller free and clear of any mortgages, liens, claims, charges,
encumbrances, assessments, or other adverse interests of any kind or nature
whatsoever.
4.1 Absence of Conflicting Agreements; Consents. Subject to
obtaining the Consents listed on Schedule 3.5, the execution, delivery and
performance by Seller and HDA of this Agreement and the documents contemplated
hereby (with or without the giving of notice, the lapse of time, or both): (a)
do not require the consent of any third party; (b) will not conflict with any
provision of the Certificate of Incorporation or Bylaws of Seller or the
Partnership Agreement of HDA; (c) will not conflict with, result in a breach
of, or constitute a default under any applicable law, judgment, order,
ordinance, injunction, decree, rule, regulation, or ruling of any court or
governmental instrumentality; and (d) will not conflict with, constitute
grounds for termination of, result in a breach of, constitute a default under,
or accelerate or permit the acceleration of any performance required by the
terms of any Material Contract. Except for the FCC Consent provided for in
Section 6.1, the Buyer Consents and the other Consents described in Schedule
3.5, no consent, approval, permit, or authorization of, or declaration to, or
filing with any governmental or regulatory authority or any other third party
is required (a) to consummate this Agreement and the transactions contemplated
hereby, or (b) to permit Seller to issue the Stock to Buyer.
4.1 Governmental Licenses. Schedule 3.6 includes a true and
complete list of the Licenses. Seller has made available to Buyer true and
complete copies of the Licenses (including any amendments and other
modifications thereto). The Licenses have been validly issued, and Seller is
the authorized legal holder thereof. To the knowledge of Seller, the Licenses
listed on Schedule 3.6 comprise all of the licenses, permits, and other
authorizations required from any governmental or regulatory authority for the
lawful conduct in all material respects of the business and operations of the
Stations. Seller has no reason to believe that, under existing law, rules,
regulations, policies, and procedures of the FCC, any of the Licenses would not
be renewed by the FCC or other granting authority in the ordinary course.
4.1 Real Property. Schedule 3.7 contains a complete and accurate
description of all Real Property and all Real Property Interests (including
street address, legal description (where known), and owner). The Real Property
Interests listed on Schedule 3.7 comprise all interests in real property
necessary to conduct the business and operations of the Stations as now
conducted. Except as described on Schedule 3.7, Seller has good and marketable
fee simple title to all fee estates included in the Real Property Interests, in
each case free and clear of all liens, mortgages, pledges, covenants,
easements, restrictions, encroachments, leases, charges, and other claims
and
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encumbrances, except for liens for current taxes not yet due and payable. With
respect to each leasehold or subleasehold interest included in the Real Property
Interests, so long as Seller fulfills its obligations under the lease therefor,
Seller has enforceable rights to nondisturbance and quiet enjoyment against its
lessor or sublessor, and, to the knowledge of Seller, except as set forth in
Schedule 3.7, no third party holds any interest in the leased premises with the
right to foreclose upon Seller's leasehold or subleasehold interest. Seller has
full legal and practical access to all of the Real Property. To the knowledge
of Seller, all towers, guy anchors, and buildings and other improvements
included in the Assets are located entirely on the Real Property listed in
Schedule 3.7. All Real Property (including the improvements thereon) (a) is
available for immediate use in the conduct of the business and operations of the
Stations, and (b) complies in all material respects with all applicable building
or zoning codes and the related regulations of any governmental authority having
jurisdiction, except to the extent that the current use by Seller, while
permitted, constitutes or would constitute a "nonconforming use" under current
zoning or land use regulations.
4.1 Tangible Personal Property. Schedule 3.8 lists all material
items of Tangible Personal Property. The Tangible Personal Property listed on
Schedule 3.8 comprises all material items of tangible personal property
necessary to conduct the business and operations of the Stations as now
conducted. Except as described in Schedule 3.8, Seller owns and has good title
to each item of Tangible Personal Property and none of the Tangible Personal
Property owned by Seller is subject to any security interest, mortgage, pledge,
conditional sales agreement, or other lien or encumbrance, except for liens for
current taxes not yet due and payable.
4.1 Contracts. Schedule 3.9 is a true and complete list of all
Contracts in effect on the date of this Agreement except contracts with
advertisers for production or the sale of advertising time on the Stations for
cash at rates consistent with past practices and that may be canceled by Seller
without penalty on not more than sixty days' notice. Seller has delivered to
Buyer true and complete copies of all written Contracts, true and complete
descriptions of all oral Contracts (including any amendments and other
modifications to such Contracts) listed on Schedule 3.9. Other than the
Contracts listed on Schedule 3.9, Seller requires no contract, lease, or other
agreement to enable it to carry on its business in all material respects as now
conducted. To the knowledge of Seller, all of the Contracts listed on Schedule
3.9 are in full force and effect and are valid, binding, and enforceable in
accordance with their terms. Except as disclosed on Schedule 3.9, other than
in the ordinary course of business or as contemplated by this Agreement, Seller
is not aware of any intention by any party to any Contract (a) to terminate
such contract or amend the terms thereof, (b) to refuse to renew the Contract
upon expiration of its term, or (c) to renew the Contract upon expiration only
on terms and conditions that are more onerous than those now existing. Except
for the need to obtain the Consents listed on Schedule 3.5 and except as
otherwise contemplated by this Agreement, the purchase and sale of the Stock in
accordance with this Agreement will not affect the validity, enforceability, or
continuation of any of the Contracts listed on Schedule 3.9.
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4.1 Intangibles. Schedule 3.10 is a true and complete list of all
Intangibles (exclusive of Licenses listed in Schedule 3.6) that are required to
conduct the business and operations of the Stations as now conducted, all of
which, to the knowledge of Seller, are valid and in good standing and
uncontested. Seller has made available to Buyer copies of all documents
possessed by Seller establishing or evidencing the Intangibles listed on
Schedule 3.10. Other than with respect to matters generally affecting the
television broadcasting industry and not particular to Seller, Seller has not
received any notice or demand alleging that Seller is infringing upon or
otherwise acting adversely to any trademarks, trade names, service marks,
service names, copyrights, patents, patent applications, know-how, methods, or
processes owned by any other Person, and there is no claim or action pending, or
to the knowledge of Seller threatened, with respect thereto.
4.1 Title to Properties. Except as disclosed in Schedule 3.11,
Seller has good and marketable title to all of its properties and assets
subject to no mortgages, pledges, liens, security interests, encumbrances, or
other charges or rights of others of any kind or nature except statutory liens
not yet delinquent.
4.1 Financial Statements. Seller has furnished Buyer with true and
complete copies of an unaudited balance sheet and statement of income as at and
for the nine months ended September 30, 1995 (collectively, the "Financial
Statements"). The Financial Statements have been prepared from the books and
records of Seller, accurately reflect the books, records, and accounts of
Seller and present fairly in all material respects the financial condition of
Seller as at their respective dates and the results of operations for the
periods then ended determined in accordance with GAAP. Seller commenced
operations of the Stations in January, 1995.
4.1 Undisclosed Liabilities. Except as otherwise disclosed herein,
Seller has no material debt, liability or obligation, whether accrued,
absolute, contingent or otherwise, including any liability or obligation on
account of taxes or any governmental charges or penalty, interest or fines,
except: (i) those liabilities reflected in the Financial Statements; (ii)
liabilities incurred in the ordinary course of business (other than contingent
liabilities) since September 30, 1995; or (iii) liabilities listed on Schedule
3.13.
4.1 Taxes. Except as set forth in Schedule 3.14:
(a) All Tax Returns that are required to be filed by or with
respect to Seller prior to the date of this Agreement have been timely filed,
and Seller has delivered to Buyer true and complete copies of all of the Tax
Returns of Seller.
(a) All material Taxes for which Seller is liable that are due
and payable or required to be withheld on or before the date hereof without
regard to any extensions (other than such Taxes that are being contested or
protested in good faith by appropriate proceedings and for which a reserve or
other appropriate provision as required in conformity with GAAP has been made
in the financial statements of Seller)
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whether or not arising under the Tax Returns referred to in subsection (a), have
been paid or withheld in full on or before the date hereof. The Financial
Statements reflect an adequate reserve for all material unpaid Taxes payable by
Seller for all taxable periods and portions thereof through the date of such
statements.
(a) Neither Seller nor any of its Affiliates has waived or
been requested to waive any statute of limitations in respect of Taxes of
Seller.
(a) No material issues have been raised (and are currently
pending) by any taxing authority in connection with any of the Tax Returns
referred to in subsection (a) and all material deficiencies asserted or
assessments made as a result of any examinations by taxing authorities have
been paid in full.
4.1 Compliance with Laws. To Seller's knowledge, and except as
otherwise disclosed herein, Seller has complied in all material respects with
the Licenses and all federal, state and local laws, rules, regulations and
ordinances except to the extent that noncompliance would not have a material
adverse effect on the Stations or the Assets.
4.1 Insurance. Schedule 3.16 is a true and complete list of all
insurance policies of Seller. All policies of insurance listed in Schedule
3.16 are in full force and effect. Since Seller's date of incorporation, no
insurance policy of Seller or the Stations has been canceled by the insurer and
no application of Seller for insurance has been rejected by any insurer.
4.1 Reports. To Seller's knowledge, all returns, reports, and
statements that the Stations are currently required to file with the FCC or
Federal Aviation Administration have been filed, and all reporting requirements
of the FCC and Federal Aviation Administration have been complied with in all
material respects.
4.1 Personnel.
(a) Employees and Compensation. Schedule 3.18 contains a true
and complete list of all employees of Seller and all persons retained as
independent contractors by Seller (collectively, the "Employees") and a
description of all compensation arrangements affecting them. Schedule 3.18
also contains a true and complete list of all employee benefit plans or
arrangements applicable to the Employees, including any:
(1) "Employee welfare benefit plan," as defined in
Section 3(1) of ERISA, that is maintained or administered by Seller or to which
Seller contributes or is required to contribute and that covers any Employee or
under which Seller has any liability (a "Welfare Plan");
(1) "Multiemployer pension plan," as defined in Section
3(37) of ERISA, that is maintained or administered by Seller or to which Seller
contributes or is required to contribute and which covers any Employee or under
which Seller has any
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liability (a "Multiemployer Plan");
(1) "Employee pension benefit plan," as defined in
Section 3(2) of ERISA (other than a Multiemployer Plan), to which Seller
contributes or is required to contribute (a "Pension Plan");
(1) Employee plan that is maintained in connection with
any trust described in Section 501(c)(9) of the Internal Revenue Code of 1986,
as amended (the "Code"); and
(1) Employment, severance, or other similar contract,
arrangement, or policy and each plan or arrangement (written or oral) providing
for insurance coverage (including any self-insured arrangements), workers'
compensation, disability benefits, supplemental unemployment benefits, vacation
benefits, or retirement benefits or for deferred compensation, profit-sharing,
bonuses, stock options, stock appreciation rights, stock purchases, or other
forms of incentive compensation or post-retirement insurance, compensation, or
benefits that (A) is not a Welfare Plan, Pension Plan, or Multiemployer Plan,
(B) is entered into, maintained, contributed to, or required to be contributed
to by Seller or under which Seller has any liability, and (C) covers any
Employee (collectively, "Benefit Arrangements").
(a) Benefit Arrangements. Each Benefit Arrangement has been
maintained in substantial compliance with its terms and with the requirements
prescribed by all statutes, orders, rules, and regulations that are applicable
to such Benefit Arrangement. Seller has no written contract prohibiting the
termination of any Employee.
(a) Delivery of Copies of Relevant Documents and Other
Information. Seller has delivered true and complete copies of each of the
following documents to Buyer:
(1) Each Welfare Plan, Multiemployer Plan and Pension
Plan (and, if applicable, related trust agreements) and all amendments thereto,
and written descriptions thereof that have been distributed to Employees, all
annuity contracts or other funding instruments; and
(1) Each Benefit Arrangement and written descriptions
thereof that have been distributed to Employees (including descriptions of the
number and level of employees covered thereby), and complete descriptions of
any Benefit Arrangement that is not in writing.
(a) Labor Relations. Except as set forth in Schedule 3.18,
Seller is not a party to or subject to any written or oral employment agreement
with any Employee. Except as set forth in Schedule 3.18, to Seller's
knowledge, Seller has complied in all material respects with all laws, rules,
and regulations relating to the employment of labor, including those related to
wages, hours, collective bargaining, occupational safety, discrimination, and
the payment of social security and other payroll related taxes, and it has not
received any notice alleging that it has failed to comply with any such laws,
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rules, or regulations. Except as set forth in Schedule 3.18, no controversies,
disputes, or proceedings are pending or, to the knowledge of Seller, threatened,
between it and any Employee (singly or collectively). No labor union or other
collective bargaining unit represents or claims to represent any of the
employees of Seller. To the knowledge of Seller, there is no union campaign
being conducted to solicit cards from any Employees to authorize a union to
request a National Labor Relations Board certification election with respect to
any Employees.
4.1 Claims and Legal Actions. Except as disclosed on Schedule 3.19
and except for any rulemaking proceedings generally affecting the television
broadcasting industry and not particular to Seller, there is no claim, legal
action, counterclaim, suit, arbitration, or other legal, administrative, or tax
proceeding, nor any order, decree, or judgment, in progress or pending, or to
the knowledge of Seller threatened, against or relating to Seller, the Assets,
or the business or operations of the Stations, nor does Seller know of any
basis for the same. In particular, but without limiting the generality of the
foregoing, there are no applications, complaints, or proceedings pending or, to
the knowledge of Seller, threatened (a) before the FCC relating to the business
or operations of the Stations other than rulemaking proceedings that affect the
television industry generally, (b) before any federal or state agency relating
to Seller involving charges of illegal discrimination under any federal or
state employment laws or regulations, or (c) before any federal, state, or
local agency relating to Seller involving zoning issues under any federal,
state, or local zoning law, rule, or regulation.
4.1 Environmental Matters.
(a) Except as set forth on Schedule 3.20, to Seller's
knowledge, Seller has complied in all material respects with all laws, rules,
and regulations of all federal, state, and local governments (and all agencies
thereof) concerning the environment, public health and safety, and employee
health and safety, and no charge, complaint, action, suit, proceeding, hearing,
claim, demand, or notice has been filed or commenced against Seller alleging
any failure to comply with any such law, rule, or regulation.
(a) Except as set forth on Schedule 3.20, to Seller's
knowledge, Seller has no liability (and there is no reasonable basis related to
Seller's past or present operations, properties, or facilities for any
present or future charge, complaint, action, suit, proceeding, hearing,
investigation, claim, or demand against Seller giving rise to any such
liability) under the Comprehensive Environmental Response, Compensation and
Liability Act, the Resource Conservation and Recovery Act, the Federal Water
Pollution Control Act, the Clean Air Act, the Safe Drinking Water Act, the Toxic
Substances Control Act, the Refuse Act, or the Emergency Planning and Community
Right-to-Know Act (each as amended) or any other law, rule, or regulation of any
federal, state, or local government (or agency thereof) concerning release or
threatened release of hazardous substances, public health and safety, or
pollution or protection of the environment.
(a) Except as set forth on Schedule 3.20, to Seller's
knowledge, Seller has
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no liability (and Seller has not handled or disposed of any substance,
arranged for the disposal of any substance, or owned or operated any property or
facility in any manner that could reasonably be expected to form the basis for
any present or future charge, complaint, action, suit, proceeding, hearing,
investigation, claim, or demand (under the common law or pursuant to any
statute) against Seller giving rise to any such liability) for damage to any
site, location, or body of water (surface of subsurface) or for illness or
personal injury.
(a) Except as set forth on Schedule 3.20, to Seller's
knowledge, Seller has no liability (and there is no reasonable basis for any
present or future charge, complaint, action, suit, proceeding, hearing,
investigation, claim, or demand against Seller giving rise to any such
liability) under the Occupational Safety and Health Act, as amended, or under
any other law, rule, or regulation of any federal, state, or local government
(or agency thereof) concerning employee health and safety.
(a) Except as set forth on Schedule 3.20, to Seller's
knowledge, Seller has no liability (and Seller has not exposed any employee to
any substance or condition that could reasonably be expected to form the basis
for any present or future charge, complaint, action, suit, proceeding, hearing,
investigation, claim, or demand (under the common law or pursuant to statute)
against Seller giving rise to any such liability) for any illness or personal
injury to any employee.
(a) Except as set forth on Schedule 3.20, to Seller's
knowledge, Seller has obtained and been in material compliance with all of the
terms and conditions of all permits, licenses, and other authorizations that
are required under, and has complied with all other limitations, restrictions,
conditions, standards, prohibitions, requirements, obligations, schedules, and
timetables that are contained in, all federal, state, and local laws, rules,
and regulations (including all codes, plans, judgments, orders, decrees,
stipulations, injunctions, and charges thereunder) relating to public health
and safety, worker health and safety, and pollution or protection of the
environment, including laws relating to emissions, discharges, releases, or
threatened releases of pollutants, contaminants, or chemical, industrial,
hazardous, or toxic materials or wastes into ambient air, surface water, ground
water, or lands or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, or chemical, industrial, hazardous, or toxic
materials or wastes.
(a) Except as set forth on Schedule 3.20, to Seller's
knowledge, all properties and equipment of Seller are and have been free of
asbestos and asbestos-related products, PCB's, methylene chloride,
trichloroethylene, 1, 2- trans-dichloroethylene, dioxins, dibenzofurans, and
Extremely Hazardous Substances (as defined in Section 302 of the Emergency
Planning and Community Right-to-Know Act).
(a) Except as set forth on Schedule 3.20, to Seller's
knowledge, no pollutant, contaminant, or chemical, industrial, hazardous, or
toxic material or waste has ever been manufactured, buried, stored, spilled,
leaked, discharged, emitted, or released by
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Seller on any Real Property. To the knowledge of Seller, no pollutant,
contaminant, or chemical, industrial, hazardous, or toxic material or waste
has ever been manufactured, buried, stored, spilled, leaked, discharged,
emitted, or released on any Real Property.
4.1 Transactions with Affiliates. Except as disclosed in Schedule
3.21 and any transactions between HDA and Seller, Seller has not been involved
in any business arrangement or relationship with any Affiliate of Seller, and
no Affiliate of Seller owns any property or right, tangible or intangible, that
is used in the business of the Stations.
4.1 Broker. Except as set forth on Schedule 3.22, Neither Seller or
HDA nor any Person acting on their behalf has incurred any liability for any
finders' or brokers' fees or commissions in connection with the transactions
contemplated by this Agreement.
4.1 Full Disclosure. No representation or warranty made by Seller
or HDA in this Agreement or in any certificate, document, or other instrument
furnished or to be furnished by Seller or HDA pursuant to this Agreement when
taken as a whole contains or will contain, when made, any untrue statement of a
material fact, or omits or will omit to state, when stated, any material fact
that is required to make any statement made herein or therein not misleading.
4.1 FIRPTA. The Seller is not, and since the date of its
incorporation has not been, a "United States real property holding corporation"
within the meaning of Section 897(c)(2) of the Code.
4.1 Securities Compliance. No securities of the Seller are required
to be registered under Section 12 of the Securities and Exchange Act of 1934,
as amended. The Seller is not an "investment company" as such term is defined
in the Investment Company Act of 1940, as amended.
SECTION 4.. REPRESENTATIONS AND WARRANTIES OF BUYER.
Buyer represents and warrants to Seller as follows:
5.1 Organization, Standing, Authority, Ownership. Buyer is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Florida and has the requisite corporate power and
authority to execute, deliver, and perform this Agreement and the documents
contemplated hereby according to their respective terms and to own the Stock.
Schedule 4.1 describes the authorized capital stock of Buyer and identifies the
name and number of shares of capital stock held by each holder of Buyer's
Capital Stock. Except as described on Schedule 4.1, no person holds any option
or right to acquire any capital stock of Buyer or any security convertible into
any capital stock of Buyer.
5.1 Authorization and Binding Obligation. The execution, delivery
and
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performance of this Agreement by Buyer have been duly authorized by all
necessary corporate action on the part of Buyer. This Agreement has been duly
executed and delivered by Buyer and constitutes a legal, valid, and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms
except as the enforceability of this Agreement may be affected by bankruptcy,
insolvency, or similar laws affecting creditors' rights generally and by
judicial discretion in the enforcement of equitable remedies.
5.1 Absence of Conflicting Agreements. Subject to the receipt of
the Consents, the execution, delivery and performance by Buyer of this
Agreement and the documents contemplated hereby (with or without the giving of
notice, the lapse of time, or both): (a) do not require the consent of any
third party; (b) will not conflict with the Articles of Incorporation or
By-laws of Buyer; (c) will not conflict with, result in a breach of, or
constitute a default under, any applicable law, judgment, order, ordinance,
injunction, decree, rule, regulation, or ruling of any court or governmental
instrumentality; and (d) will not conflict with, constitute grounds for
termination of, result in a breach of, constitute a default under, or
accelerate or permit the acceleration of any performance required by the terms
of, any agreement, instrument, license or permit to which Buyer is a party or
by which Buyer may be bound.
5.1 Brokers. Neither Buyer nor any Person acting on its behalf has
incurred any liability for any finders' or brokers' fees or commissions in
connection with the transactions contemplated by this Agreement.
5.1 Investment Purpose. Buyer is acquiring the Stock for investment
for its own account and not with a view to the sale or distribution of any part
thereof, and not including collateral assignments or pledges of the Stock for
financing purposes, Buyer has no present intention of selling, granting
participations in, or otherwise distributing the Stock.
5.1 Qualifications. Assuming the Seller's existing FCC
authorization to operate WKPV(TV) and WJWN-TV as satellites of WSJN-TV pursuant
to Section 73.3555, Note 5, of the FCC's rules and regulations is not
terminated, Buyer is legally qualified under the Communications Act and FCC
rules, regulations and policies to acquire the Stock and to operate the
Stations.
5.1 Full Disclosure. No representation or warranty made by Buyer in
this Agreement or in any certificate, document, or other instrument furnished
or to be furnished by Buyer pursuant to this Agreement when taken as a whole
contains or will contain, when made, any untrue statement of a material fact,
or omits or will omit to state, when stated, any material fact that is required
to make any statement made herein or therein not misleading.
SECTION 5.. OPERATION OF THE STATIONS PRIOR TO CLOSING.
HDA and Seller covenant and agree that between the date hereof and the
Closing
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Date, Seller will conduct its business in the ordinary course in
accordance with its past practices (except where such conduct would conflict
with the following covenants or with other obligations of Seller under this
Agreement or the Time Brokerage Agreement), and, except as contemplated by this
Agreement or the Time Brokerage Agreement or with the consent of Buyer, Seller
and HDA, as the case may be, will act in accordance with the following:
6.1 Contracts. Seller will not amend or terminate any Material
Contract (or waive any material right thereunder) or enter into any contract or
commitment or incur any obligation (including obligations relating to the
borrowing of money or the guaranteeing of indebtedness and obligations arising
from the amendment of any existing Contract, regardless whether such Contract
is a Material Contract) that will be binding on Seller after Closing, except
for (a) cash time sales agreements and production agreements made in the
ordinary course of business consistent with Seller's past practices and that
are cancelable by the Stations without penalty on not more than sixty days'
notice, and (b) other contracts entered into in the ordinary course of business
consistent with Seller's past practices that do not involve consideration, in
the aggregate, in excess of $5,000 measured at Closing. Prior to the Closing
Date, Seller shall make available to Buyer copies of all Contracts entered into
between the date of this Agreement and the Closing Date.
6.1 Compensation. Seller shall not increase the compensation,
bonuses, or other benefits payable or to be payable to any person employed in
connection with the conduct of the business or operations of the Stations,
except in accordance with past practices or as described on Schedule 3.18.
6.1 Encumbrances. Seller will not create, assume, or permit to
exist any mortgage, pledge, lien, or other charge or encumbrance affecting any
of its assets, except for those in existence on the date of this Agreement and
disclosed in Schedule 3.11 and liens for current taxes not yet due and payable.
6.1 Dispositions. Seller will not sell, assign, lease, or otherwise
transfer or dispose of any of its assets except where no longer used or useful
in the operations of the Stations or in connection with the acquisition of
replacement property of equivalent kind and value.
6.1 Mergers. Seller will not reorganize, liquidate or merge or
consolidate with any other entity.
6.1 Access to Information. Seller will give to Buyer and its
counsel, accountants, engineers, and other authorized representatives
reasonable access to the Stations and all books, records, and documents of
Seller, and will furnish or cause to be furnished to Buyer and its authorized
representatives all information relating to Seller that they reasonably request
(including any financial reports and operations reports produced with respect
to the Stations).
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6.1 Insurance. Seller shall maintain in full force and effect
policies of insurance of the same type, character, and coverage as the policies
currently carried with respect to the business, operations, and assets of
Seller.
6.1 Indebtedness and Obligations. Seller shall not incur any
indebtedness for borrowed money. Seller shall pay all its obligations as they
become due, consistent with past practices. Without limiting the generality of
the foregoing, HDA shall contribute to Seller such amounts as are required to
permit Seller to pay on a timely basis all amounts of principal and interest
due under the GE Loan and the payments due under the IRS Debt.
6.1 Compliance with Laws. Seller shall comply in all material
respects with all laws, rules, and regulations except to the extent that
noncompliance would not have a material adverse effect on Seller or that
noncompliance is caused by an agent of Buyer.
6.1 Licenses. Seller shall not cause or permit, by any act or
failure to act, any of the Licenses required to be listed on Schedule 3.6 to
expire or to be revoked, suspended, or modified, or take any action that could
reasonably be expected to cause the FCC or any other governmental authority to
institute proceedings for the suspension, revocation, or material adverse
modification of any of the Licenses. Seller and HDA shall promptly prepare and
prosecute with due diligence any applications to any governmental authority
necessary for the operation of the Stations or the consummation of the
transaction contemplated herein, including any applications filed pursuant to
Section 6.1.
6.1 No Inconsistent Action. Neither HDA nor Seller shall take any
action that is inconsistent with its respective obligations under this
Agreement in any material respect or that could reasonably be expected to
hinder or delay the consummation of the transactions contemplated by this
Agreement. Neither HDA, Seller nor any of their representatives or agents
shall, directly or indirectly, solicit, initiate, or participate in any way in
discussions or negotiations with, or provide any confidential information to,
any Person (other than Buyer or any Affiliate or associate of Buyer and their
respective representatives and agents) concerning any possible disposition of
the Stations, the sale of any material assets of the Stations, or any similar
transaction.
6.1 Seller Consents. Seller shall use its best efforts to obtain
all Seller Consents and the estoppel certificates described in Section 8.2(e),
without any change in the terms or conditions of any Contract or License.
Seller shall promptly advise Buyer of any difficulties experienced in obtaining
any of the Seller Consents and of any conditions proposed, considered, or
requested for any of the Seller Consents.
6.1 Books and Records. Seller shall maintain its books and records
in accordance with past practices.
6.1 Notification. Seller shall promptly notify Buyer in writing of
any material change in any of the information contained in the representations
and warranties
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contained in Section 3 of this Agreement.
6.1 Financial Information. Seller shall deliver to Buyer when and
as they are prepared the Seller's Financial Statements concerning the Stations
(including information on payables and receivables) which shall be prepared in
accordance with GAAP. Seller shall provide Buyer with audited Financial
Statements for 1995 by March 31, 1996.
6.1 Securities. Seller will not, and will not agree to (a) issue,
sell or otherwise dispose of any of its shares of capital stock; (b) acquire
(through redemption or otherwise) any of its shares of capital stock; (c) grant
any options, warrants, or other rights to acquire any of its shares of capital
stock; or (d) issue, sell or otherwise dispose of any stock options, bonds,
notes or other securities.
6.1 Distributions. Seller will not, and will not agree to, pay any
dividends or make any other distribution or payment in respect of the capital
stock of Seller, except that Seller may distribute to HDA (i) an amount each
month equal to the monthly programming fee paid by Buyer to Seller plus the
programming service fee paid to Buyer pursuant to the Time Brokerage Agreement
and (ii) an amount on the Closing Date equal to the Purchase Price plus any
programming rebate pursuant to Section 2.5.
6.1 Capital Improvements. On or prior to the Closing Date, Seller
shall have completed the capital improvements identified on Schedule 3.6. HDA
shall make capital contributions to Seller of sufficient funds to complete such
capital improvements. In addition, HDA shall make loans to Seller in an
equivalent amount of any loans made by Buyer pursuant to the Capital Funding
Note provided for in Section 1.8 of the Time Brokerage Agreement. Such loans
shall be pari passu with the Capital Funding Note and evidenced by and payable
in accordance with a note of like tenor as the Capital Funding Note.
SECTION 6.. SPECIAL COVENANTS AND AGREEMENTS.
7.1 FCC Consent.
(a) The sale of the Stock as contemplated by this Agreement is
subject to the prior consent and approval of the FCC.
(a) Seller, HDA and Buyer shall prepare and, within five
days after the date hereof, file with the FCC an appropriate application for
the FCC Consent. Seller, HDA and Buyer shall thereafter prosecute the
application for the FCC Consent with all reasonable diligence and otherwise
use their respective best efforts to obtain a grant of the application
for the FCC Consent as expeditiously as practicable. Each party agrees to
comply with any condition imposed on it by the FCC Consent, except that no party
shall be required to comply with a condition if (i) the condition was imposed on
it as the result of a circumstance the existence of which does not constitute a
breach by that party of any of its representations, warranties, or covenants
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hereunder, and (ii) compliance with the condition would have a material
adverse effect upon it. Buyer, HDA and Seller, at Buyer's sole cost and
expense, shall oppose any petitions to deny or other objections filed with
respect to the application for the FCC Consent and any requests for
reconsideration or judicial review of the FCC Consent; provided, however, that
the costs and expenses incurred by Buyer shall be added to the principal of the
Revolving Cash Flow Note of Seller set forth on Schedule 1.8C of the Time
Brokerage Agreement between Seller and Buyer, and provided, further, that if
this Agreement is terminated one-half of such amount shall be added to the
principal, and accrued but unpaid interest thereon shall be deemed to be
repaid.
(a) If the Closing shall not have occurred for any reason
within the original effective period of the FCC Consent, and neither party
shall have terminated this Agreement under Section 9, the parties shall jointly
request an extension of the effective period of the FCC Consent. No extension
of the effective periods of the FCC Consent shall limit the exercise by either
party of its right to terminate the Agreement under Section 9.
7.1 Risk of Loss.
(a) The risk of any loss, damage or impairment, confiscation
or condemnation of any of the Assets from any cause whatsoever shall be borne
by Seller at all times prior to the completion of the Closing.
(a) If any damage or destruction of the Assets or any other
event occurs which prevents in any material respect signal transmission by the
Stations in the normal and usual manner and Seller is unable to restore or
replace the Assets so that such conditions are cured and normal and usual
transmission is resumed in all material respects before the Closing Date, the
Closing Date may, at the option of Buyer, be postponed, for a period of up to
ninety (90) calendar days, to permit the repair or replacement of the damage or
loss.
(a) In the event of any damage or destruction of the Assets
described above, Buyer may, at its option, proceed to close this Agreement and
complete the restoration and replacement of such damaged Assets after the
Closing Date pursuant to the Management Agreement, and all insurance proceeds
received in connection with such damage or destruction of the Assets shall be
used for such restoration or replacement.
7.1 Confidentiality. Except as necessary for the consummation of
the transaction contemplated by this Agreement, including the requirements of
Buyer's lenders, and except as and to the extent required by law, each party
will keep confidential any information obtained from the other party in
connection with the transactions contemplated by this Agreement. If this
Agreement is terminated, each party will return to the other party all
information obtained by such party from the other party in connection
with the transactions contemplated by this Agreement.
7.1 Cooperation. Buyer, Seller and HDA shall cooperate fully with
each other and
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their respective counsel and accountants in connection with any actions
required to be taken as part of their respective obligations under this
Agreement, and Buyer, Seller and HDA shall execute such other documents as may
be necessary and desirable to the implementation and consummation of this
Agreement, and otherwise use their best efforts to consummate the transaction
contemplated hereby and to fulfill their obligations under this Agreement.
Notwithstanding the foregoing, and except as otherwise expressly provided in
this Agreement, Buyer shall have no obligation to agree to any adverse change
in any License or Contract in order to obtain a Consent required with respect
thereto.
7.1 Control of the Stations. Prior to Closing, Buyer shall not,
directly or indirectly, control, supervise, or direct, or attempt to control,
supervise or direct the operations of the Stations; those operations, including
complete control and supervision of all of the Stations' programs, employees,
and policies, shall be the sole responsibility of Seller.
7.1 Shareholder Agreement. At Closing, Buyer, Seller and HDA shall
enter into the Shareholder Agreement substantially in the form of Exhibit A.
7.1 Management Agreement. At Closing, Seller, Buyer and HDA shall
enter into the Management Agreement substantially in the form of Exhibit B.
7.1 Agreement with ECOC. Seller shall enter into a Programming
Agreement with El Comandante Operating Co., Inc. ("ECOC") effective February 1,
1996, in the form of Schedule 6.8 hereto.
7.1 No Inconsistent Action. Buyer shall not take any action that is
inconsistent with its obligations under this Agreement or that could reasonably
be expected to hinder or delay the consummation of the transactions
contemplated hereby. Without limiting the generality of the foregoing, Buyer
shall not take any action that could result in its disqualification under the
Communications Act or FCC rules and regulations to purchase the Stock or
operate the Stations. If Buyer becomes aware of any fact that could result in
such disqualification, it will so inform Seller and HDA and use its best
efforts to eliminate any such disqualifying fact.
7.1 Buyer Consents. Buyer shall use its best efforts to obtain all
of the Buyer Consents. Buyer shall promptly advise Seller of any difficulties
experienced in obtaining any of the Buyer Consents and of any conditions
proposed, considered or requested for any of the Buyer Consents.
SECTION 7.. CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER.
8.1 Conditions to Obligations of Buyer. All obligations of Buyer at
the Closing hereunder are subject at Buyer's option to the fulfillment prior to
or at the Closing Date of each of the following conditions:
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(a) Representations and Warranties. All representations and
warranties of Seller and HDA contained in this Agreement shall be true and
complete in all material respects at and as of the Closing Date as though made
at and as of that time.
(a) Covenants and Conditions. Seller and HDA shall have
performed and complied in all material respects with all covenants, agreements,
and conditions required by this Agreement to be performed or complied with by
them prior to or on the Closing Date.
(a) Consents. All Consents shall have been obtained without
any adverse change in the terms or conditions of any Material Contract or any
License.
(a) FCC Consent. The FCC Consent shall have been granted
without the imposition on Buyer of any conditions that need not be complied
with by Buyer under Section 6.1 hereof, Seller and HDA shall have complied with
any conditions imposed on them by the FCC Consent, and the FCC Consent shall
have become a Final Order.
(a) Governmental Authorizations. Seller shall be the holder
of all FCC Licenses and there shall not have been any modification, revocation,
or non-renewal of any License that could have an adverse effect on the Stations
or the conduct of its business and operations. No proceeding shall be pending
the effect of which could be to revoke, cancel, fail to renew, suspend, or
modify adversely any FCC License.
(a) Deliveries. Seller shall have made or stand willing to
make all the deliveries to Buyer described in Section 8.2.
(a) Adverse Change. Between the date of this Agreement and
the Closing Date, there shall have been no material adverse change in the Real
Property, Tangible Personal Property or the Programming Agreement (Schedule 6.8
hereto) not covered by Section 6.2 hereof.
(a) HDA Bond Holders. HDA shall have obtained the written
consent of the holders of HDA's $68 million 11.75% First Mortgage Notes due
2003 to the transactions contemplated by this Agreement.
(a) Station Authorizations. As part of the FCC Consent, the
FCC shall have granted Seller authorization (i) to operate Station WKPV(TV) and
Station WJWN-TV as satellites of Station WSJN-TV pursuant to Section 73.3555,
Note 5, of the FCC's rules and regulations, 47 C.F.R. Section 73.3555, and
(ii) to operate Station WKPV(TV) and Station WJWN-TV from main studios located
outside of their respective principal community contours.
(a) No Proceeding. No administrative or judicial proceeding
by any governmental authority or any other person shall have been instituted or
threatened that questions the validity or legality of the transactions
contemplated by this Agreement.
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(a) Stations' Operation. Buyer shall have received evidence
that the Capital Improvements listed on Schedule 3.6 have been completed, the
Licenses are in full force and effect and the conduct of the business and
operations of the Stations are in accordance therewith.
(a) Phase I Study. Buyer shall have received prior to Closing
a Phase I Environmental Study of the Stations in form and substance
satisfactory to Buyer. The cost of the Phase I Study shall be the
responsibility of the Buyer.
8.1 Conditions to Obligations of Seller. All obligations of Seller
at the Closing hereunder are subject at Seller's option to the fulfillment
prior to or at the Closing Date of each of the following conditions:
(a) Representations and Warranties. All representations and
warranties of Buyer contained in this Agreement shall be true and complete in
all material respects at and as of the Closing Date as though made at and as of
that time.
(a) Covenants and Conditions. Buyer shall have performed and
complied in all material respects with all covenants, agreements, and
conditions required by this Agreement to be performed or complied with by it
prior to or on the Closing Date.
(a) Deliveries. Buyer shall have made or stand willing to
make all the deliveries described in Section 8.3.
(a) FCC Consent. The FCC Consent shall have been granted
without the imposition on Seller or HDA of any conditions that need not be
complied with by Seller or HDA under Section 6.1 hereof, and Buyer shall have
complied with any conditions imposed on it by the FCC Consent.
(a) HDA Bond Holders. HDA shall have obtained the written
consent of the holders of HDA's $68 million 11.75% First Mortgage Notes due
2003 to the transactions contemplated by this Agreement.
(a) Station Authorizations. As part of the FCC Consent, the
FCC shall have granted Seller authorization (i) to operate Station WKPV(TV) and
Station WJWN-TV as satellites of Station WSJN-TV pursuant to Section 73.3555,
Note 5, of the FCC's rules and regulations, 47 C.F.R. Section 73.3555, and
(ii) to operate Station WKPV(TV) and Station WJWN-TV from main studios located
outside of their respective principal community contours.
(a) No Proceeding. No administrative or judicial proceeding
by any governmental authority or any other person shall have been instituted or
threatened that questions the validity or legality of the transactions
contemplated by this Agreement.
SECTION 8. CLOSING AND CLOSING DELIVERIES.
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9.1 Closing.
(a) Closing Date.
(1) Except as provided below in this Section 8.1(a) or
as otherwise agreed to by Buyer and Seller, the Closing shall take place at
10:00 a.m. on a date, to be set by Buyer on at least five days' written notice
to Seller and HDA, which shall be not earlier than the first business day after
the FCC Consent is granted and not later than ten business days following the
date upon which the FCC Consent has become a Final Order.
(1) Except as provided below in this Section 8.1(a), if
Buyer fails to specify the date for Closing pursuant to the preceding sentence
prior to the fifth business day after the date upon which the FCC Consent has
become a Final Order, the Closing shall take place on the tenth business day
after the date upon which the FCC Consent has become a Final Order.
(1) If any event occurs that prevents signal
transmission by the Stations in the normal and usual manner and Seller cannot
restore the normal and usual transmission before the date on which the Closing
would otherwise occur pursuant to this Section 8.1(a), and this Agreement has
not been terminated under Section 9, the Closing shall be postponed until a
date within the effective period of the FCC Consent (as it may be extended
pursuant to Section 6.1) to allow Seller to restore the normal and usual
transmission by the Stations. If the Closing is postponed pursuant to this
paragraph, the date of the Closing shall be mutually agreed to by Seller and
Buyer.
(1) If there is in effect on the date on which the
Closing would otherwise occur pursuant to this Section 8.1(a) any judgment,
decree, or order that would prevent or make unlawful the Closing on that date,
the Closing shall be postponed until a date within the effective period of the
FCC Consent (as it may be extended pursuant to Section 6.1), to be agreed upon
by Buyer and Seller, when such judgment, decree, or order no longer prevents or
makes unlawful the Closing. If the Closing is postponed pursuant to this
paragraph, the date of the Closing shall be mutually agreed to by Seller and
Buyer.
(a) Closing Place. The Closing shall be held at the offices
of Dow, Xxxxxx & Xxxxxxxxx, 0000 Xxxxxx-Xxxxx Xxxxxx, X.X., Xxxxx 000,
Xxxxxxxxxx, X.X. 00000, or any other place that is agreed upon by Buyer and
Seller.
9.1 Deliveries by Seller. Prior to or on the Closing Date, Seller
shall deliver to Buyer the following, in form and substance reasonably
satisfactory to Buyer and its counsel:
(a) Stock. Certificates representing all of the Stock, which
shall be either
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duly endorsed or accompanied by stock powers duly executed in favor of Buyer.
(a) Certificate of Incorporation. A copy of the Certificate
of Incorporation of the Seller certified as of a date not earlier than ten days
prior to the Closing Date by the Secretary of the Commonwealth of Puerto Rico.
(a) Bylaws. A copy of the Bylaws of the Seller certified, as
of the Closing Date, by its Secretary or Assistant Secretary.
(a) Resolutions. Copies of resolutions adopted by the Board
of Directors of Seller authorizing and approving the execution of this
Agreement and the consummation of the transactions contemplated hereby,
including the election of Buyer's designees to the Board of Directors of
Seller, certified by the Secretary or Assistant Secretary of Seller as being
true and complete on the Closing Date.
(a) Estoppel Certificates. Estoppel certificates of the
lessors of all leasehold and subleasehold interests included in the Real
Property Interests and estoppel certificates of contracting parties to those
Contracts listed in Schedule 3.9 that are designated and remain in effect on
the Closing Date to indicate that estoppel certificates are required under this
Section 8.2(e).
(a) Officer's Certificate. A certificate, dated as of the
Closing Date, executed on behalf of Seller and HDA by the President of Seller
and the managing partner of HDA, certifying: (1) that the representations and
warranties of Seller and HDA contained in this Agreement are true and complete
in all material respects as of the Closing Date as though made on and as of
that date; and (2) that Seller and HDA have in all material respects performed
and complied with all of their respective obligations, covenants, and
agreements in this Agreement to be performed and complied with on or prior to
the Closing Date.
(a) Shareholder Agreement. The Shareholder Agreement, duly
executed by Seller, Buyer and HDA.
(a) Management Agreement. The Management Agreement, duly
executed by Seller, Buyer and HDA.
(a) Opinions of Counsel. Opinions of Seller's counsel and
communications counsel dated as of the Closing Date, in form and substance
satisfactory to Buyer's counsel.
(a) Resignations. Any written resignations effective as of
the Closing Date, of officers and directors of Seller that Buyer shall have
requested and Seller shall have agreed to prior to the Closing Date.
(a) A certificate, dated as of the Closing Date, executed on
behalf of Seller and HDA evidencing the Seller's Accounts Receivable as of
January 31, 1996 and
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receipt by Seller from HDA of a Cash Payment equal to the face amount of such
Accounts Receivable as provided for in Section 2.4 hereof.
(a) Evidence of the payment by HDA to Seller of the funding as
required by Section 2.4 hereof sufficient to cover Seller's liabilities..
(a) A Certificate, dated as of the Closing Date, executed on
behalf of Seller and HDA, satisfactory to Buyer, to the effect that the General
Electric Credit Corporation and the Internal Revenue Service payment
obligations of the Seller have been assumed by HDA and that such obligations
will be reflected on Seller's balance sheet, only as a contingent liability.
9.1 Deliveries by Buyer. Prior to or on the Closing Date, Buyer
shall deliver to Seller the following, in form and substance reasonably
satisfactory to Seller and its counsel:
(a) Closing Payment. The payment described in Section 2.3;
and
(a) Resolutions. Copies of resolutions adopted by the Board
of Directors of Buyer, authorizing and approving the execution of this
Agreement and the consummation of the transactions contemplated hereby,
certified by its Secretary as being true and correct on the Closing Date.
(a) Officer's Certificate. A certificate, dated as of the
Closing Date, executed on behalf of Buyer by the Chairman or President of
Buyer, certifying (1) that the representations and warranties of Buyer
contained in this Agreement are true and complete in all material respects as
of the Closing Date as though made on and as of that date, and (2) that Buyer
has in all material respects performed and complied with all of its
obligations, covenants, and agreements in this Agreement to be performed and
complied with on or prior to the Closing Date.
(a) Opinion of Counsel. An opinion of Buyer's counsel dated
as of the Closing Date, in form and substance satisfactory to Seller's counsel.
(a) Shareholder Agreement. The Shareholder Agreement, duly
executed by Buyer, Seller and HDA.
(a) Management Agreement. The Management Agreement, duly
executed by Seller, Buyer and HDA.
SECTION 9 TERMINATION.
10.1 Termination by Seller. This Agreement may be terminated by
Seller and HDA, if Seller and HDA are not then in material default, upon
written notice to Buyer, upon the occurrence of any of the following:
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(a) Conditions. If on the date that would otherwise be the
Closing Date any of the conditions precedent to the obligations of Seller set
forth in this Agreement has not been satisfied or waived in writing by Seller.
(a) Judgments. If there shall be in effect on the date that
would otherwise be the Closing Date any judgment, decree, or order that would
prevent or make unlawful the Closing.
(a) Upset Date. If the Closing shall not have occurred on or
prior to January 31, 1997.
10.1 Termination by Buyer. This Agreement may be terminated by Buyer,
if Buyer is not then in material default, upon written notice to Seller, upon
the occurrence of any of the following:
(a) Conditions. If on the date that would otherwise be the
Closing Date any of the conditions precedent to the obligations of Buyer set
forth in this Agreement has not been satisfied or waived in writing by Buyer.
(a) Judgments. If there shall be in effect on the date that
would otherwise be the Closing Date any judgment, decree, or order that would
prevent or make unlawful the Closing.
(a) Upset Date. If the Closing shall not have occurred on or
prior to January 31, 1997.
10.1 Escrow Deposit. Simultaneously with the execution and delivery
of this Agreement, Buyer has deposited with the Escrow Agent, cash in the
amount of Two Hundred Thousand Dollars ($200,000) (the "Escrow Deposit") in
accordance with an Escrow Agreement among Buyer, Seller, and the Escrow Agent
in the form of Exhibit C. All funds and documents deposited with or otherwise
held by the Escrow Agent shall be held and disbursed in accordance with the
terms of the Escrow Agreement and the following provisions:
(a) At the Closing, Buyer and Seller shall jointly instruct
the Escrow Agent to disburse all funds held by the Escrow Agent pursuant to the
Escrow Agreement, including any interest or other proceeds from the investment
of funds held by the Escrow Agent, to or at the direction of Buyer.
(a) If this Agreement is terminated pursuant to Section 9.1 or
Section 9.2 and Buyer is not in material breach of any provision of this
Agreement, Buyer and Seller shall jointly instruct the Escrow Agent to disburse
all funds held by the Escrow Agent pursuant to the Escrow Agreement, including
any interest or other proceeds from the investment of funds held by the Escrow
Agent, to or at the direction of Buyer.
(a) If this Agreement is terminated by Seller due to Buyer's
material breach
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of this Agreement, then Buyer and Seller shall jointly instruct the
Escrow Agent to disburse the Escrow Deposit to or at the direction of Seller,
and to disburse all other funds held by the Escrow Agent pursuant to the Escrow
Agreement, including any interest or other proceeds from the investment of
funds held by the Escrow Agent, to or at the direction of Seller.
10.1 Rights on Termination. If this Agreement is terminated by
Seller and Section 9.3(c) applies, then the payment to Seller pursuant to
Section 9.3(c) shall be liquidated damages and shall constitute full payment
and the exclusive remedy for any damages suffered by Seller by reason of
Buyer's breach of this Agreement. Seller and Buyer agree in advance that
actual damages would be difficult to ascertain and that the amount of the
payment to be made to Seller pursuant to Section 9.3(c) is a fair and equitable
amount to reimburse Seller for damages sustained due to Buyer's breach of this
Agreement. If this Agreement is terminated by Buyer due to Seller's breach of
any provision of this Agreement, Buyer shall have all rights and remedies
available at law or equity.
10.1 Specific Performance. The parties recognize that if Seller
breaches this Agreement and refuses to perform under the provisions of this
Agreement, monetary damages alone would not be adequate to compensate Buyer for
its injury. Buyer shall therefore be entitled, in addition to any other
remedies that may be available, to obtain specific performance of the terms of
this Agreement. If any action is brought by Buyer to enforce this Agreement,
Seller and HDA shall waive the defense that there is an adequate remedy at law.
10.1 Attorneys' Fees. In the event of a default by either party that
results in a lawsuit or other proceeding for any remedy available under this
Agreement, the prevailing party shall be entitled to reimbursement from the
other party of its reasonable legal fees and expenses (whether incurred in
arbitration, at trial, or on appeal).
SECTION 10.. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES.
11.1 Survival. Without prejudice to representations and warranties
in other agreements delivered hereunder, all representations and warranties of
Buyer, Seller and HDA herein and all covenants of Buyer, Seller and HDA herein
with respect to periods prior to Closing shall be deemed continuing
representations, warranties and covenants, and shall survive the Closing for a
period of eighteen (18) months. Any investigations by or on behalf of any
party hereto shall not constitute a waiver as to enforcement of any
representation, warranty, or covenant contained in this Agreement. No notice
or information delivered by either party shall affect the other party's right
to rely on any representation, warranty, or covenant made by such party or
relieve such party of any obligations under this Agreement as the result of a
breach of any of its representations and warranties.
11.1 Indemnification by Seller. After the Closing but subject to
Section 10.5,
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Seller hereby agrees to indemnify and hold Buyer harmless against and with
respect to, and shall reimburse Buyer for:
(a) any and all losses, liabilities, or damages resulting from
any untrue representation, breach of warranty, or nonfulfillment of any
covenant by Seller contained herein or in any certificate, document, or
instrument delivered to Buyer hereunder;
(a) any and all losses, liabilities or damages resulting from
the operation or ownership of the Stations prior to the date hereof;
(a) any and all out-of-pocket costs and expenses, including
reasonable legal fees and expenses, incident to any action, suit, proceeding,
claim, demand, assessment, or judgment incident to the foregoing or incurred in
investigating or attempting to avoid the same or to oppose the imposition
thereof, or in enforcing this indemnity.
11.1 Indemnification by Buyer. Notwithstanding the Closing, Buyer
hereby agrees to indemnify and hold Seller harmless against and with respect
to, and shall reimburse Seller for:
(a) any and all losses, liabilities, or damages resulting from
any untrue representation, breach of warranty, or nonfulfillment of any
covenant by Buyer contained herein or in any certificate, document, or
instrument delivered to Seller hereunder; and
(a) any and all out-of-pocket costs and expenses, including
reasonable legal fees and expenses, incident to any action, suit, proceeding,
claim, demand, assessment, or judgment incident to the foregoing or incurred in
investigating or attempting to avoid the same or to oppose the imposition
thereof, or in enforcing this indemnity.
11.1 Procedure for Indemnification. The procedure for
indemnification shall be as follows:
(a) The party claiming indemnification (the "Claimant") shall
promptly give notice to the party from which indemnification is claimed (the
"Indemnifying Party") of any claim, whether between the parties or brought by a
third party, specifying in reasonable detail the factual basis for the claim.
If the claim relates to an action, suit, or proceeding filed by a third party
against Claimant, such notice shall be given by Claimant within five business
days after written notice of such action, suit, or proceeding was given to
Claimant.
(a) With respect to claims solely between the parties,
following receipt of notice from the Claimant of a claim, the Indemnifying
Party shall have thirty days to make such investigation of the claim as the
Indemnifying Party deems necessary or desirable. For the purposes of such
investigation, the Claimant agrees to make available to the Indemnifying Party
and its authorized representatives the information
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relied upon by the Claimant to substantiate the claim. If the Claimant and the
Indemnifying Party agree at or prior to the expiration of the thirty-day period
(or any mutually agreed upon extension thereof) to the validity and amount of
such claim, the Indemnifying Party shall immediately pay to the Claimant the
full amount of the claim. If the Claimant and the Indemnifying Party do not
agree within the thirty-day period (or any mutually agreed upon extension
thereof), the Claimant may seek appropriate remedy at law or equity or under
the arbitration provisions of this Agreement, as applicable.
(a) With respect to any claim by a third party as to which the
Claimant is entitled to indemnification under this Agreement, the Indemnifying
Party shall have the right at its own expense, to participate in or assume
control of the defense of such claim, and the Claimant shall cooperate fully
with the Indemnifying Party, subject to reimbursement for actual out-of-pocket
expenses incurred by the Claimant as the result of a request by the
Indemnifying Party. If the Indemnifying Party elects to assume control of the
defense of any third-party claim, the Claimant shall have the right to
participate in the defense of such claim at its own expense. If the
Indemnifying Party does not elect to assume control or otherwise participate in
the defense of any third-party claim, it shall be bound by the results obtained
in good faith by the Claimant with respect to such claim.
(a) If a claim, whether between the parties or by a third
party, requires immediate action, the parties will make every effort to reach a
decision with respect thereto as expeditiously as possible.
(a) The indemnifications rights provided in Section 10.2 and
Section 10.3 shall extend to the partners, officers, employees, and
representatives of any Claimant although for the purpose of the procedures set
forth in this Section 10.4, any indemnification claims by such parties shall be
made by and through the Claimant.
11.1 Certain Limitations.
(a) Notwithstanding anything in this Agreement to the
contrary, neither party shall indemnify or otherwise be liable to the other
party with respect to any claim for any breach of a representation or warranty,
or for the breach of any covenant contained in Section 5 of this Agreement,
unless (i) notice of the claim is given within eighteen months after the
Closing Date, except with respect to Sections 3.11, 3.14 and 3.20, with respect
to which notice of the claim may be given until the expiration of the
applicable statute of limitations, and (ii) except to the extent the losses,
obligations, liabilities, costs and expenses of such party arising therefrom
exceed in the aggregate Ten Thousand Dollars ($10,000).
(a) Notwithstanding anything in this Agreement to the
contrary, no indemnification shall be payable by Seller or HDA to any Claimant
in excess of Two Hundred Thousand Dollars ($200,000) in the aggregate, except
with respect to Section 3.19.
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11.1 Exclusivity of Remedy. Except as otherwise specifically
provided for in this Agreement, the provisions of this Section 10 shall be the
sole recourse of Buyer for any matters relating to or arising in connection
with this Agreement, and such recourse is explicitly limited to the amounts and
time limits set forth in Section 10.5.
SECTION 11.. MISCELLANEOUS.
12.1 Fees and Expenses. Seller shall pay any filing fees, transfer
taxes, document stamps, or other charges levied by any governmental entity on
account of the transfer of the Stock from Seller to Buyer. Except as provided
in Section 6.1(b) of this Agreement, Buyer and Seller shall each pay one-half
of any fees charged by the FCC in connection with obtaining the FCC Consent.
Except as otherwise specifically provided in this Agreement, each party shall
pay its own expenses incurred in connection with the authorization,
preparation, execution, and performance of this Agreement, including all fees
and expenses of counsel, accountants, agents, and representatives.
12.1 Notices. All notices, demands, and requests required or
permitted to be given under the provisions of this Agreement shall be in
writing and shall be addressed as follows:
If to Buyer: Xxxxxx Communications of San Xxxx, Inc.
----------- 000 Xxxxxxxxxx Xxxx Xxxx
Xxxx Xxxx Xxxxx, XX 00000
Attn: Xx. Xxxxxx X. Xxxxxx
with copies (which shall not Xxxx X. Xxxxx, Xx., Esq.
constitute notice) to: Dow, Xxxxxx & Xxxxxxxxx 0000 Xxxxxx-xxxxx Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
If to Seller: S & E Network Inc.
------------ Xx Xxxxxxxxxx Xxxx Xxxxx
Xxxxxxxxxx, Xxxxxx Xxxx 00000
Attention: President
with a copy (which shall not Xxxxxx Xxxx, Esquire
constitute notice) to: Xxxxxxxxx & Xxxxxxx
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000-0000
If to HDA: Housing Development Associates S.E.
--------- 000 Xxxxx Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxx Xxx
Xxxxxx Xxxx 00000
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Attention: President
with a copy (which shall not Xxxx Xxxx, Esquire
constitute notice) to: Xxxxxxxxx & Xxxxxxx
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000-0000
or to any other or additional persons and addresses as the parties may from
time to time designate in a writing delivered in accordance with this Section
10.5(a). A notice mailed by registered or certified mail, postage prepaid and
return receipt requested, shall be deemed to have been duly delivered and
received on the date of receipt shown on the return receipt.
12.1 Benefit and Binding Effect. No party hereto may assign this
Agreement without the prior written consent of the other parties hereto;
provided, however, that Buyer may assign its rights and obligations under this
Agreement to another entity without seeking or obtaining Seller's or HDA's
prior approval provided, further, that Buyer shall guarantee such assignee's
performance hereunder. Upon any assignment by Buyer or permitted assignment by
Seller in accordance with this Section 11.3, all references to "Buyer" herein
shall be deemed to be references to "Seller" herein shall be deemed to be
references to Seller's assignee. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.
12.1 Further Assurances. The parties shall take any actions and
execute any other documents that may be necessary or desirable to the
implementation and consummation of this Agreement.
12.1
GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED,
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA (WITHOUT
REGARD TO THE CHOICE OF LAW PROVISIONS THEREOF).
12.1
Headings. The headings herein are included for ease of
reference only and shall not control or affect the meaning or construction of
the provisions of this Agreement.
12.1
Entire Agreement. This Agreement, the schedules, hereto, and
all documents, certificates, and other documents to be delivered by the parties
pursuant hereto, collectively represent the entire understanding and agreement
between Buyer and Seller with respect to the subject matter of this Agreement.
This Agreement supersedes all prior negotiations between the parties and cannot
be amended, supplemented, or changed except by an agreement in writing that
makes specific reference to this Agreement and that is signed by the party
against which enforcement of any such amendment, supplement, or modification is
sought.
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12.1 Waiver of Compliance; Consents. Except as otherwise provided
in this Agreement, any failure of any of the parties to comply with any
obligation, representation, warranty, covenant, agreement, or condition herein
may be waived by the party entitled to the benefits thereof only by a written
instrument signed by the party granting such waiver, but such waiver or failure
to insist upon strict compliance with such obligation, representation,
warranty, covenant, agreement, or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent or other failure. Whenever this
Agreement requires or permits consent by or on behalf of any party hereto, such
consent shall be given in writing in a manner consistent with the requirements
for a waiver of compliance as set forth in this Section 11.8.
12.1 Counterparts. This Agreement may be signed in counterparts
with the same effect as if the signature on each counterpart were upon the same
instrument.
12.1 Guaranty of HDA.
(a) In consideration of the execution and delivery of this
Agreement by Buyer, HDA agrees as follows:
(1) HDA hereby guarantees the full, complete, and
timely performance by Seller of each and every obligation of Seller under this
Agreement. If any default shall be made by Seller in the performance of any of
such obligations, then HDA will itself perform or cause to be performed such
obligation upon receipt of notice from Buyer specifying in summary form the
default.
(1) HDA waives presentment, protest, demand, or
action or delinquency in respect of any of the obligations of Seller under this
Agreement. HDA waives all notices of nonperformance, notices of protest,
notices of dishonor, and notices of acceptance of this guaranty.
(1) This guaranty shall be deemed a continuing
guaranty, and the above consents and waivers of HDA shall remain in full force
and effect until the satisfaction in full of all obligations of Seller under
this Agreement.
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35
IN WITNESS WHEREOF, this Agreement has been executed by the duly
authorized officers of Buyer, Seller and HDA as of the date first written
above.
S & E NETWORK INC.
By:
--------------------------------------
Name:
Title:
XXXXXX COMMUNICATIONS OF SAN
XXXX, INC.
By:
--------------------------------------
Name:
Title:
HOUSING DEVELOPMENT
ASSOCIATES S.E.
By: Equus Gaming Company L.P.,
its managing partner
By: Equus Management Company,
its managing general partner
By:
------------------------------
Name:
Title:
